1. Sales - Over reliance on first interactions converting and how to build brand awareness
With no historical data to help drive decisions and little brand awareness, you may well see low conversion rates and ROI which can lead to unwelcome pressure internally on your organisation. Within this context you might face an uphill battle as your new competition has access to historical data backed up with a strong brand presence. In this regard, they can use a matured cross channel strategy and be reactive to your promotions. They may even be able to reduce industry margins to drive you out of the market.
Of course, this is an advantage you likely hold in your native market, spending years (even decades for some) communicating with your target audience, driving awareness and creating a reputation within your industry to build strong relationships that drive revenue and growth. When launching new search campaigns in a new international market, it is likely that users will be interacting with your brand and services for the first time. They may well in effect be “window shopping” your website rather than actually in market for services and products to purchase right now. As the incumbent to the market, you need to work harder to build a relationship with your new target audience and introduce them to your brand and USPs. It may take many small interactions over a prolonged period before you’re able to learn enough to be savvy with your search marketing to achieve an acceptable ROI.
Layer audiences on top of your keywords to help guide where you allocate your budget and customize your messaging to the stage of the purchase path the user has reached. Examples include previous purchases, website category page views and micro conversions such as account sign ups and email submission forms. Without audiences, all searches will be treated as one audience when in fact users will be at different stages of the purchase funnel. This approach alone may see high costs and low ROI as you struggle to distinguish high value from low value users. The following audiences should be set up asap:
- Converter Lists (utilise customer match)
- Website category page views
- Account sign ups
- Submission form entries (quote requests, call backs etc)
- Previous buyers (customer match)
- Abandoned basket users
- Non Converter Lists (to be used as RSLA)
Once these audiences have been created - and allowed to populate - you can then start to leverage Google tools such as similar audiences, Remarking List for Search Ads and audience IF functions. These tools can help inform account structure, budgets and KPIs by isolating or observing these users, customising messaging and allocating promotions. In addition, consider overlaying on to your campaigns any applicable intent audiences such as “in-market” from Google. These audiences will help you isolate users whose browsing behaviour suggests they are actively searching for products / services within your industry, helping to allocate budget to users more likely to convert, which is especially useful for your generic campaigns.
Use display campaigns to build brand awareness. Introduce users to your brand and services through image and text ads in your new market. You’ll see relatively lower CPCs vs search campaigns and you can start to build audience lists to remarket to on search engines. You can then overlay these audience lists on to your search campaigns and apply bid adjustments to ensure your bids are high enough to achieve a strong ad rank when these users search again.
If you have strict ROI targets, consider restricting your coverage away from very generic terms and instead focusing budget on higher intent reseller + model searches within your Shopping and Search campaigns.
For example – You’re a retailer of sports gear and you want to expand into a new market. Take the following three search terms that will typically occur on a search engine:
Search 1) Generic “football boots”
Search 2) Reseller + Generic “Adidas football boots”
Search 3) Reseller + Model “Adidas predator football boots”
Search one represents targeting those very generic, higher funnel search terms which may see high click volumes and spend but a low conversion rate. These users may be just starting their research into football boots and have not reached a stage where they are ready to purchase: the so called “window shoppers.” In comparison, users searching on reseller + model terms demonstrate greater intent and specificity in their search and are more likely to be price sensitive and ready to purchase. If you’re using custom labels in shopping, look to use a high / medium priority label and ensure your company brand managers can quickly apply high intent labels to products that have seen price reductions. Whilst this approach may reduce transaction volumes, ROI will likely increase from a reduction in spend on non converting keywords helping to control internal expectations as the expansion is proving to be profitable.
Depending on your business and industry, demonstrate expertise and raise your profile as an “educator” website. Consider showcasing your company’s expertise through blogs and expert insight pages with a view to collecting new audiences from the users who visit these pages. You can even consider using Google Analytics to build audiences based on behavioural data such as number of pages viewed as a means of differentiating highly engaged from less engaged site visitors. You can then overlay these audiences onto your search campaigns with settings set to “observation” with a view to applying bid adjustments when you have collected sufficient data.
2. Competitors - They may have significantly shorter delivery times than you
OK, so your customers live in the UK and your warehouses and logistics are built to support speedy delivery. Will you be shipping products from these existing warehouses overseas or building a new infrastructure in the new market? Can you deliver your products from warehouse to consumer within 3-5 days to France? Germany? Spain? Italy? If not, it is highly likely that your new competitors - through their longevity in the market - will be able to do so as it’s their native market. If you’re bringing a new product to the market, then this might not be a problem as only you can offer this to the marketplace. However, if your product is readily available and you’re looking to compete on price, then your competitors have a conversion driving advantage that may impact the performance of your campaigns.
Ensure a strong supply and delivery chain prior to launching in the new market and don’t be afraid to use location targeting to isolate areas you can easily serve. For example, if your distribution channel means you can reach New York and the US East Coast much sooner than say the mid-west and west of America... then focus on those Eastern US states first!
3. Market Forces - Your price competitiveness may reduce due to competitors reacting to your market entry… So be reactive & strategic through offers & promotions
In all likelihood, price competitiveness within a target market was a major driving force behind your motivation for an expansion there. However, whilst you have likely undertaken a critical assessment of all your inventory to assess competitiveness, don’t be afraid to ask difficult questions and be honest regarding your products / services. If you’re going to struggle to be competitive on price in some areas of your range, focus purely on the areas where you know you will be strong. There is a good possibility your new competitors may reduce prices and increase promotions to counter your impact on their market. This market reactionary force may see products with small margins becoming non-profitable despite earlier anticipating that they would be. When calculating budgets, account for the nature of an auction time search environment. You may see increased CPCs and costs for your bids as your competitors seek to retain their historical average positions on the search engine results page following your entrance. They may even start bidding on your brand terms which could inflate costs.
Start pushing products within search and shopping campaigns where your pricing is most competitive. Utilise shopping custom labels for high priority / low priority, and target your new audience by pushing promotions and offers that stand out from the competition. By using a label to identify these products, you can be far more sensitive to price changes and therefore react quicker to change. If you don’t identify which shopping products are the most competitive, you’ll struggle to react in the market to changes in price. Furthermore, utilising audiences will allow you to customise the message and the landing page to that audience and utilise your first party data. Take advantage of automated bidding strategies – including automated budget bidding strategies - to take advantage of machine learning and retain greater control of your budget whilst optimising to your favoured KPI.
4. Localisation - Only using a semi-localised website and relying on your current native market employees to drive oversees expansion
Expanding overseas can bring unwanted pressures internally to your organisation through increased employee workloads with new KPIs. In contrast to marketing in your native market, teams must deliver results often without local market knowledge to aid decisions. In this respect, some of our most successful overseas expansions have been from companies that hired local marketers to oversee the expansion, utilising these new employees’ local social, political, consumer and language knowledge to support their campaigns.
For account managers, it is critical that we are aware of cultural differences that may impact on seasonality and conversion rates as well as assisting with search query work and ad copy messaging. A client here at Merkle recently expanded into a new European market and discovered through hiring a local marketing executive that a product they wanted to push had branding that translated very poorly. The company rebranded the product for the new market and localised the website accordingly to save any potential wasted search advertising spend. In addition, consider creating regional teams and invite them to sit on quarterly calls with your search account managers so that they can be invested in your search activity and feedback their insights and requirements. Regional teams can provide assistance in the creation of ad copy, but do not assume that they will understand your requirements or understand your best practices and therefore oversight is imperative.
5. Targets - With no historical data, overburdening the expansion with unrealistic KPIs and budgets
As search account managers we absolutely thrive on working to targets! However, they must be reasonable and achievable, influenced by past historical performance and be supported by sensible future initiatives. It takes time to collect sufficient amounts of data to derive the learnings that are going to be key to strategic decision making going forward. Managing expectations internally is therefore critical, meaning that your pre-expansion plans must prepare for the worst-case scenarios. Ensuring sufficient cash flow and technical skills are available before expansion would be a sensible starting point.
There are many factors that influence the failure or success of expanding into a new market for the first time. Whilst we have discussed in earlier blogs how optimisations and elements of localisation are essential components of expansion, there are also organisational, logistical and market competitiveness considerations with their implications for strategy that also require adequate consideration to avoid the common pitfalls discussed in this article.
Get in touch with our export team here at Merkle | Periscopix to discover how we can support your international expansion and take advantage of our agency Google export team partnership across search, programmatic, paid social and analytics.