Long-Term Client Improvements Under RKG’s Management

Opportunity:

A large camera retailer is a well-established client of RKG. In a business with notoriously thin profit margins, the retailer must constantly look for ways to trim costs in order to be profitable and to keep ahead of the competition.

Performance was good, but the retailer was looking to more consistently hit margin goals and continue to improve overall efficiency. Since the client was well established, and had long benefited from RKG’s superior technology and analysis, RKG had to dig for ways to significantly improve an already very successful program.

Solution:

Working with the client, in August 2009 RKG implemented margin-based bidding for the account. Going one step beyond bidding based on A/S efficiency targets, RKG was able to bid to a margin percentage based off of profit from current orders, achieving the desired result of consistently hitting margin goals. In March 2010, RKG implemented inventory bidding to improve results even further – automatically pushing down bids for products that are not in stock – in order to decrease costs and improve efficiency. RKG designed their inventory bidder to work with a client’s product feed, utilizing a stock status column for all product level URLs. Rather than turning off ads for out of stock products, RKG’s inventory bidder aggressively drops bids on those ads, allowing for maximum bidding flexibility when the product comes back in stock.

Results:

During the test period, non-brand sales improved 1.9%, and costs dropped 9.3%, resulting in a 12.5% year over year lift in overall efficiency. These two tools further stabilized the client’s account, allowing them to forecast margin more accurately, and in turn, allowing RKG to optimize bids more accurately.