Sephora
Alli-Driven Search Creative Optimization
The world’s largest specialty retailer for beauty and cosmetics products, Sephora sells items from hundreds of manufacturer brands in its worldwide stores and online. To ensure the best coverage possible in paid search, PMG manages the client’s SEM program across multiple accounts and hundreds of thousands of ad groups, and does so efficiently and effectively through automation and processes enabled by Alli, the company’s marketing intelligence platform.
Services
25 M
Million customized ads and sitelinks
300k+
Incremental traffic to site
59%
Lower average CPC
Challenge
Faced with increased pressure from competitors ranging from traditional retailers to Amazon, Sephora utilizes a personalization strategy across its digital efforts that enables the brand to meaningfully connect with consumers — through messaging about its value proposition (evergreen) and drivers aimed at increasing traffic to and purchases of specific manufacturer brands (promotions). This means PMG has to flawlessly deliver a near-constant state of creative optimization across the hundreds of thousands of ad groups, with copy changes that vary from manufacturer brand to manufacturer brand.
Strategy & Approach
The reason for committing to that scale of creative optimization is that increased ad relevancy to consumers maximizes both CTR and conversion rate, and that, in turn, maximizes cost-savings (from better qualifying clicks and improved quality score) and ROAS (i.e., reduced wasted spend plus higher revenue equals more profits) for Sephora.
PMG’s strategy was to leverage automation to handle the bulk of search creative optimization, including the extensive number of sitelinks that further increase relevancy against consumers’ search queries. The Sephora account team created a process in which Alli pulled directly from a dynamically updated spreadsheet of evergreen and promotional text, and automatically pushed out copy changes across multiple accounts. This allowed PMG to easily deploy messaging around sales and promotions specific to any number of the hundreds of manufacturer brands in a virtual snap of a finger.
Results
With the help of Alli, PMG’s team deployed a total of 25 million new and relevant ads and sitelinks last year to support Sephora’s personalization strategy. It did so in an automated, and accurate, manner that not only drove significant revenue and profit impact, but also huge savings in resource hours. That time saved meant that the team had more freedom to pursue other strategic priorities that would further strengthen Sephora’s digital program.
During the key holiday shopping season alone, PMG used Alli to deploy 368k additional promotional ads across multiple accounts. Topline text ads saw CTR improvement of 18% Y/Y, and because of the tailored ad copy, Sephora benefited from increased consumer participation in key events like early access sales, and sign-ups to its loyalty program.
The optimized creative drove a noticeable increase in quality score, which resulted in millions of dollars in cost savings and hundreds of thousands of incremental clicks. Best of all, combined with strategic investment and bidding decisions, those clicks came at an average CPC 59% lower Y/Y. At the end of the day, PMG’s technology and strategic leadership carried out Sephora’s personalization strategy in spades, and the brand has benefited by acquiring new customers, and better activation of its most loyal shoppers.