With the likes of Google Analytics and Omniture at their disposal, e-commerce players let data drive what works best for their digital advertising campaigns. Click through rate (CTR), Cost per lead (CPL), Cost per click (CPC), Conversions, Returns on Ad spend are common jargons that you hear and while, it may annoy a strategy evangelist, SEM experts use these as the bedrock for all campaigns they may drive.

Once the advertising campaigns go live, in very little time these data ninjas come out with detailed targeting personas for products and categories. There are hawks everywhere, on top of each campaign and each keyword. With strict targets on CPL, breachers are quickly “paused” and never again “enabled”. In the quest of optimization, campaigns are not allowed to have a bad day! We can’t blame them; it’s the nature of our business really.

The Life Cycle of Best Selling Products

In the process, we usually discover this one product or product subcategory that works really well. Say, Biba suits for some Apparel seller, or Ferrero Rochers for a gifting website. These products consistently perform well for a reason(s); Perhaps they look great, provide value for money, etc. One observes that top 3 to 5 products can contribute to as much as 50% to 80% of revenue of the entire website. So we scale them up; and it often works. Everyone’s happy! In fact everyone is so happy that (thanks to search and display impression share reports) even the competitors notice it and start promoting them on their websites, audaciously.

Thus begins a war of bids, keywords and placements, to at least replicate, if not to scale, the success achieved earlier. Now, no matter who comes out on top or even if there is enough food to feed Coxey’s army, the damage is done. Even if the conversion volumes are maintained, the CPC and CPL shoot up.


Top selling product

This is typically how a marquee product or sub-category loses its sheen.  There is panic and thus  comes a phase of deep diving and micro-managing campaigns. Experiments follow, with the hope of finding the next big product. And then this entire cycle starts all over again. This is a very common but not a great practice to follow.

Identifying products before they start trending

On almost every eCommerce website, there are instances when few products or a particular sub-category begins to do well through organic or direct traffic or through the classic case of people clicking on one product’s ad and buying another product. If this happens increasingly and consistently, (from my experience it happens about once a month for most of my eCommerce clients) then these emerging products need to be monitored closely. While their rise might not get reflected in your favorite campaign performance report, it does get reflected in the product performance report.

There are different parameters to label a product as an emerging one. Transaction growth over multiple periods, number of additions to cart, product views, ad spend versus revenue and percentage revenue coming from unpaid sources are but a few. A crucial factor in defining an emerging product is the observation period. People in our industry tend to go for month-over-month or week-over-week; however in the eCommerce industry, changes takes place very rapidly. The earlier you identify any movement, the easier it is to respond.  I recommend going for three small intervals each consisting of 3-4 days; to test out how well the product does all by itself.


Emerging Product

Spending a small amount by being precise about demographics and device, to test emerging products is another great way to know without breaking the bank. The hypothesis is that the bids on these products are relatively low and wouldn’t completely blow up the CPL due to them being relatively unnoticed.

A knack for discovering emerging products will churn out seasonal trends, provide zip to your strategy and offload extra dependence on top selling products. And that’s not it. By nurturing your emerging products, you give your business a chance to reach out to different audiences. No longer are we exhausting a particular kind of audience by milking only one product. From cross-selling to newly exposed audiences to exposing loyalists to good products, the advantages are many.

While it is absolutely true that only few of the emerging products will rise meteorically and many of them would only see seasonal lifts (which is not a bad deal either), it is also true that your top product was once an emerging product. No one can never truly guess the potential in a product and even the best selling products need ad-space. Success cannot rely at the mercy of a few select revenue driving products. A great way to judge an eCommerce website’s performance is to keep a track of how many products emerged and then attained a particular threshold transaction volume. At the end of the day, it’s never about one product but about many emerging products. Catch them young. After all, they have earned their ad-space.

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