Selling on Walmart Marketplace can be as simple as applying for a seller account and getting approved, but success is much more complicated. Getting ahead can be a game of strategy, and advertising tactics. like Walmart keyword bidding. This ultimate guide to keyword bidding can help you master the basics and make informed choices when planning PPC campaigns.
Key takeaways
- Efficient keyword bidding for Walmart sellers plays a crucial role in profitability and needs to be monitored regularly to sustain ROI.
- When planning a strategy, many kinds of keywords must be considered, including match types and keyword types, such as primary, brand, audience, and long-tail keywords.
- Metrics related to keyword performance can help analyze how campaigns are performing and provide places to optimize to drive revenue and increase profits.
Automated vs. manual campaigns
Walmart Connect campaigns come in two forms: automated and manual. The type of campaign you select will determine whether you harvest and manage keywords through Walmart’s algorithm or on your own. While both have advantages and disadvantages, understanding the differences can help you create and fine-tune the best possible strategy for your business.
Automated
Automated campaigns are a simple, set-it-and-forget-it approach. Ideal for those looking to get started or to augment a manual approach, these campaigns manage keywords with minimal input from the advertiser. However, you can set specific parameters to increase bids on keywords that are doing well.
Automated campaigns can be a good way to support keyword bidding because they can fill in gaps in your keyword strategy, uncovering terms you might’ve not thought of.
Manual
In a manual campaign, the onus is on you. Here, using the wrong keywords can mean losing out to the competition. However, doing your homework and putting together a list of strong keywords across a range of match types can result in increased visibility and a higher likelihood of Walmart sales. Thankfully, keyword research tools are available, from in-house analytics offered by Walmart Seller Center to optimize profitability.
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Budgeting
Setting a budget should be one of your first steps when planning a campaign. Knowing what you are comfortable spending and how you want to allocate it is an essential part of strategy. Walmart Connect campaigns align with Walmart Sponsored Products, and to participate, marketplace sellers must have a total budget of $50 or more, and the daily limit must be $10 or above.
Walmart’s CPC campaigns can be budgeted in several different ways, but sellers are provided with a suggested bid price that can be used as a guide. In busy seasons, higher budgets may be beneficial, as expanding spending can effectively draw in a larger audience.
In general, find a budget that ensures competitive bidding and allows you to target shoppers searching with specific intent.
Exact vs. phrase vs. broad match types
Keywords in ad campaigns can exist in several different categories: exact, phrase, and broad.
- Exact match: Exact match keywords are the most specific kind of keywords often used to capture searches directly related to your products. These are the trickiest to get right, as a customer’s search term must match the keyword precisely. When you get them right, they are the most reliable way to reach shoppers likely to buy your products, but getting too exact can mean missing out on blind spots.
- Phrase match: Phrase match keywords are a little less specific but still match many aspects of how a customer might search for products. This can include variations and words with possible synonyms like size, shape, color, and intended use, like “women’s wide-leg blue jeans.”
- Broad match: Broad matches are the most general and not ideal to bid extensively on since they are the least likely to attract customers. A broad match keyword may be something like “women’s jeans,” which will yield hundreds or thousands of products, with yours potentially in the mix. They are good for capturing a wide array of searches that you can narrow in on as you capture more sales data.
Keyword types
Walmart keywords can be broken down into several other types outside the varying match categories. Most successful campaigns will include a blend of these types to reach the highest number of shoppers possible. Understanding the functions of each keyword type listed below can be beneficial, as specific strategies aligning with their use can help drive sales.
Primary keywords
Primary keywords, as the name implies, are keywords that serve the primary function of the product. This is generally the name of an item, a product category, or anything else that best aligns with the product listed for sale. In the above example, a primary keyword might be “blue jeans” or “women’s jeans.”
Long-tail keywords
Long-tail keywords are specific versions of keywords that include additional words to refine the primary or short-tail keyword. This is usually additional information a searcher might include to try to narrow search results, such as “women’s jeans for wearing to work.” These don’t yield as many searches but can put your product in the spotlight if you use them correctly.
Branded keywords
Branded keywords refer to keywords that include a product’s brand. For example, “Levi’s jeans” can be a highly effective strategy for selling on Walmart. If shoppers are sold on your brand, you automatically face less competition when bidding for these keywords.
These terms are most successful when selling products with known brands that customers might prefer; if your brand doesn’t have mass market recognition, it could be harder to convert shoppers who might click on the ad.
Competitor keywords
Competitor keywords are those prioritized by others selling in the same space. This category might include some keywords you’re already using, but if not, it can be a good way to ensure you’re keeping up with other sellers in your niche. Using competitor keywords increases the chance that your products will show up in searches for theirs, and your ads will be more likely to win prime product placement instead.
Generic keywords
Generic keywords are keywords associated with a product. In this case, generic keywords might be something like “denim,” “fashion,” or “pants.” These keywords likely won’t see high conversions since they aren’t specific enough to target products effectively, but they can still put your products in front of an audience that might be interested in your products.
Audience keywords
Audience keywords speak to the customers you’re trying to target. This often involves demographic information, like gender or age. For example, women are likely to be searching for female-related products for themselves, like “women’s jeans,” rather than a broader search, like “jeans.” These qualifiers speak to who the audience is and what they’re hoping to find.
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First price vs. second price auction
Walmart keyword bidding can occur in two different methods: first-price and second-price auctions. While both can offer advantages, knowing the mechanisms can help you put together a sound strategy.
First price auction
A first price auction is sometimes called a blind auction. In this situation, advertisers submit bids on a keyword based on nothing more than their own budget and assumptions of what the competitors might be bidding; there’s no way to see other bids, both before or after bidding.
This can unfold in a few different ways, but in many scenarios, it results in advertisers bidding modestly in hopes of minimal competition or bidding far too high, wasting ad spend.
First price auctions can be strategic, but they usually involve significant guesswork. Although, in some cases, a platform will offer a suggested bid, after some testing, you can generally find the lowest price you should be paying based on conversions.
Second price auction
Walmart Connect adopted second-price bidding over a year ago. In second price auctions, the advertiser only pays the second highest bid plus 1 cent, not the highest bid. Therefore, winning a $5 bid would come down to just 1 cent above your nearest competitor, saving you a lot of money in the long run.
To help you optimize further, both bid and product relevance play a role in the auction on Walmart Connect. Their algorithm prioritizes relevance first and pricing second.
For example, There is an auction between three sellers: Seller ABC, with a 90% relevance score and a $2.00 bid price; Seller EFG, with a 90% relevance score and a $3.00 bid price; and Seller XYZ, with a 70% relevance score and a $5.00 bid price.
In auctions on some platforms outside of Walmart relevance would be ignored, and Seller XYZ would win with the highest bid. But using the second price model on Walmart, Seller XYZ loses out because they are less relevant than the other two sellers. Since Seller EFG had the next highest bid price and was a good match for relevance, they will win the auction. Further, Seller EFG pays $2.01, or the second-highest bid amount from Seller ABC.
Even though your relevance score is hidden, it largely depends on factors such as keywords used on product pages, proper categorization, and customer reviews.
Key metrics for keyword performance analysis
Keyword performance isn’t shrouded in ambiguity; instead, it’s easy to track. Analyzing metrics can help you determine the effectiveness of your chosen Walmart keyword bidding strategies, so here are some of the most important figures to keep an eye on:
Cost per click (CPC)
The cost per click, or CPC, is the cost charged to an advertiser when a customer selects your product through an ad. A high cost per click can mean an expensive and potentially unsustainable keyword. In contrast, a low cost per click means you’re getting traffic without a big expenditure, which is generally the goal. However, it’s important to layer in conversion-focused metrics, as tons of traffic doesn’t always equal profitability.
Cost per acquisition (CPA)
Cost per acquisition, or CPA, is similar to cost per click but focuses on the cost of acquiring a customer. It tells you how much you are spending on average on clicks before getting someone to purchase your product. Ideally, the cost per acquisition will be low; spending too much to draw in customers can impact your bottom line. Cost per acquisition is an important metric for evaluating holes in your approach, allowing you to narrow in on bids that are too high and keywords that are irrelevant.
Conversion rate
Similarly, the conversion rate allows you to evaluate the effectiveness of your keyword bidding approach. Conversion rate refers to the number of customers you’re able to convert out of those who interacted with your ad. If two out of 100 people make a purchase, your conversion rate is 2%. Depending on your category, this is likely not ideal; the higher the conversion rate, the more you can be sure your ads are working and your product pages are communicating the proper information.
Return on ad spend (RoAS)
How much you spend on ads doesn’t matter if you cannot turn those clicks into purchases. Return on ad spend, or RoAS, is a metric that can help you evaluate how well your ads are performing. RoAS, for those selling on Walmart Marketplace, can be calculated by dividing the total amount of revenue driven by ads by the amount spent on ads.
For example: If you earned $2,000 from a campaign you paid $1,000 for, your return on ad spend is 2:1, or 2. Essentially, the RoAS of 2 indicates that you earn $2.00 for every $1.00 spent. The desired benchmark for most is at least 4:1, but this can change based on your profit margins.
Advertising cost of sale (ACoS)
Advertising cost of sale, also known as ACoS, is a similar metric to RoAS but looks into how efficient your ad spend is. In essence, this formula is the inverse of RoAS, dividing ad spend by ad revenue and multiplying the figure by 100. Using the above example, this would mean dividing the $1,000 of ad spend by the $2,000 earned and multiplying by 100 for a cost of sale of 50%. As established, this is not commonly a sign of efficient use of ad investment, indicating that you’ll need to revisit your current strategy and make improvements.
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Optimize your keyword bidding performance
Optimization is every seller’s best friend, whether you’ve had a good start to Walmart keyword bidding or your approach could use some refining. There are a few strategies you can use to ensure your content is relevant and your bids are profitable. Consider the following:
- The content on your product pages must be thorough, detailed, and aligned with the keywords that might be bid on. Inadequate content that doesn’t use keywords properly can minimize relevance based on Walmart Marketplace’s algorithm.
- Bid aggressively and retreat if necessary. Due to the low risk of overspending in second price auctions, bidding more aggressively when needed can be helpful to find champions and rule out ineffective ones .
- Every test is valuable. Review your keywords report and see what terms people have been used to convert. Even if the overall campaign wasn’t successful, over enough data, you will find diamonds in the rough that could be leveraged elsewhere.
- When bidding, consider the organic performance of keywords; keywords that perform well in organic searches can indicate relevancy, increasing the likelihood that an auction could be won with a lower bid.
Mastering CPC advertising campaigns can be an ongoing process, and it’s an area of SEO strategy that’s always evolving. While it’s possible to set automated campaigns—and plenty of companies do, with decent results—keyword research can result in better performance on eCommerce marketplaces. With Trellis by your side, conduct the right research and activate these keywords with minimal interference. Our platform can help you create a smart, savvy approach to Walmart keyword bidding that sees success. Connect with us today to learn how.
