When managing ad campaigns in small markets, it can be difficult to obtain statistically significant conclusions. Here's how to overcome that obstacle.
How can one apply North American search marketing insights to a very small market in Europe? I was reminded of this question when I recently spoke at a conference in Norway.
Norway's e-commerce market is a slim 1 percent of that in the United States. I sometimes assume I instinctively "get" the small market equation, being from Canada. But in fact, our market is not particularly small, not even counting the fact that some Canadian companies have U.S. divisions.
Canada's digital universe, by contrast with Norway's, is 10 to 15 percent of that in the United States. Despite some shortcomings in the adoption of e-commerce best practices, Canada is often cited in the top three to five nations globally for broadband penetration, digital savvy, and things like Facebook usage per capita. (Cory Doctorow is Canadian. So is the founder of Friendster. Need I say more?) Among other things, Canada has sizeable operations from companies like Amazon, eBay, Google, Sears, Rogers-owned The Shopping Channel, and The Gap operating within its borders. Canada's population is 34.2 million; Norway's is 4.9 million.
In terms of logistics and scale, Canada is much more urbanized, with over 20 million people living in or near metropolitan areas of 500,000 people all the way up to 5 million. Norway's fifth-largest city has only 80,000 people. There are no large cities in Norway; breathtaking, historic Oslo is medium-sized at 600,000 inhabitants.
Here's a reminder of why this is such a huge issue: the hallmark of great paid search campaign management is data, feedback, and nimble testing to ROI-based metrics. Feedback cycles are much faster when there is more sales conversion data to work with. It's going to take at least 10 times longer for a test to become statistically significant if the market is 10 percent the size of the larger market. (A qualified statistician can show you it might even be longer than that.) Allowing for certain adjustments and lessened competition, a test that might take one month to conclude in the U.S. market might take six months in Canada, and two to three years in Norway. Unless you do something differently, you can kiss that idea of rapid feedback goodbye.
No, you can't manage these campaigns the same way. So how do you manage them at all?
It's important to try. Wasting money on advertising sucks. This can divert scarce cash from places it might be better used.
In "Why We Make Mistakes," a well-respected book on human cognition by Joseph T. Hallinan, we learn that most people are dangerously overconfident because they are poorly "calibrated." Calibration means the relationship between reality and self-perception. In the mass media advertising industry à la Don Draper, people thought they were doing great because they didn't close the data loop. Accountability was all by feel. By contrast, TV weathermen are well-calibrated. If their predictions aren't accurate, viewers' lives are affected, and there are complaints. The profitability (or even safety) associated with good calibration forces professionals to figure out how to use data to provide better feedback on how they're doing, so they aren't dangerously or recklessly overconfident.
Clients expect paid search professionals to be plugged into actionable data. Does working in a small market let you off the hook? No way! Here are 10 ways you can get better results, even working within the limitations of a market that provides you with less feedback.
You may still be flying in a light fog at this point, but at least you won't be flying blind! Good luck.
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Goodman is founder and President of Toronto-based Page Zero Media, a full-service marketing agency founded in 2000. Page Zero focuses on paid search campaigns as well as a variety of custom digital marketing programs. Clients include Direct Energy, Canon, MIT, BLR, and a host of others. He is also co-founder of Traffick.com, an award-winning industry commentary site; author of Winning Results with Google AdWords (McGraw-Hill, 2nd ed., 2008); and frequently quoted in the business press. In recent years he has acted as program chair for the SES Toronto conference and all told, has spoken or moderated at countless SES events since 2002. His spare time eccentricities include rollerblading without kneepads and naming his Japanese maples. Also in his spare time, he co-founded HomeStars, a consumer review site with aspirations to become "the TripAdvisor for home improvement." He lives in Toronto with his wife Carolyn.
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