Achieving High ROI with Pay-Per-Click Advertising in a Competitive Market

The Challenge: When Baker’s Catalogue, the retail arm of King Arthur Flour, was interested in expanding their online marketing efforts, they decided to pursue Pay-Per-Click (PPC) advertising. Initially they began testing the PPC waters internally, but limited human resources and little internal knowledge made this strategy less than ideal. So Baker’s Catalogue turned to Timberline Interactive to launch a test PPC campaign that was measurable and would deliver positive return on their investment (ROI).

Timberline’s Approach: By early 2005, the Pay-Per-Click landscape had already reached seemingly full potential. Click rates were high and competition tough. To create a successful test for Baker’s Catalogue, Timberline started with a niche group of keyterms that were well represented on the client’s Web site but less popular in the PPC arena. With these parameters in mind, Timberline Interactive was able to build an ample keyterm list at competitive (yet low overall) bid prices. This bidding and product selection strategy coupled with targeted ad copy produced a moderate success for the test. The cost per conversion—PPC clickers who actually purchase—was low and continued to drop while revenues increased!

Building on Success: With good site analytics and keyword-level tracking in place, the Timberline marketing team was able to quickly read and react to online successes and failures, and build on what was working. While some product categories and sub-categories delivered high traffic and a large number of orders, others did not. New product areas were tested and rolled out, ultimately yielding over 2000 search terms in over 50 product categories, placed in multiple Pay-Per-Click engines. It was because of Timberline’s keen attention to numerous metrics that what started out to be a test turned into a significant part of Baker’s Catalogues online marketing arsenal.

The Results: The numbers speak for themselves. At the start of the PPC campaign the conversion rate hovered around 2%. Eight months later that rate more than doubled. The total monetary value of the campaigns climbed nearly 25 times in less than a year, and the cost per conversion went down, nearly dropping 50% from where it started.

"We hoped to grow our Web business through this medium. The growth was slow while Timberline conservatively grew the campaigns, but once they hit their stride they were able to use this channel for maximum effectiveness and ROI."—Web Marketing Team, The Baker's Catalogue

The Follow-up: Of course there is always room for improvement. Teams from both companies meet quarterly to discuss the details of the campaigns and share thoughts for potential growth, reviewing new product areas to introduce to the PPC channel.

Next steps for growing PPC in such a competitive market? While there is already strong representation of Baker’s Catalogue products in the primary PPC engines, new categories of terms continue to be tested as well as new Pay-Per-Click search engines. Baker’s Catalogue will be allocating more of their budget towards PPC next year — maintaining what clearly works while also building upon new potential growth opportunities.