Whether it’s through improved placement, increased product reviews or strategic display advertisements, these pay-to-play programs provide a powerful lever for manufacturers to pull and grow sales for their products. Not long ago, investing in these programs was a nice-to-have—but as competition intensifies, participating in them is essential to:
Here, we’ll review the most common pay-to-play programs, how to think about your strategy and what you should look at to determine success. Let’s go.
While any retailer might have a program unique to their business or strategy—and you should be aware of those, as well—there are a handful of common ones available across retailers.
Available on: Wayfair, Lowe’s, Home Depot, Amazon, Walmart
Sponsored product programs are the most common across retailers, and often where brands begin their pay-to-play strategy before building upon it. These programs use a pay-per-click (PPC) model: manufacturers bid for sponsored placement on a product results page, and with each click, pay the cost of their winning bid. The more competitive the category, the higher the bid.
“For Wayfair, this is one of the most important programs to be involved in,” said Calli Morrison, BrandJump Account Manager. “Wayfair has thousands of products and you have to fight for customer eyes to your product page. You’re competing against literally millions of other products and have to find a way to stand out.”
-Calli Morrison, BrandJump Account Manager
A huge benefit to running sponsored product campaigns is the immediate feedback and optimization. Manufacturers can track impressions, clicks, spend and conversions, often in real time, and make adjustments to bids, spend, campaigns or audiences as they see fit.
Success in a sponsored product campaign is typically measured by ROAS: Return On Ad Spend. ROAS tells you, based on how much you spent, how much did you get back? More on this in a bit.
Offered on: Wayfair, Lowe’s, Home Depot, Amazon
This advertising program may come by any number of names, but the notion is the same: manufacturers can buy a banner ad placement promoting their brand that leads to a product page of just your products.
There’s usually only one banner space on a page, making this a more competitive (and likely pricier) type of campaign. But it can also be a stronger representation of your brand, category or products and attract the right customer.
Offered on: Wayfair, Amazon
Keyword campaigns are just that: Advertising programs that target customers who search for a particular keyword in the website’s search. These are more effective on some retailers than others. On Wayfair, the shopper is known to browse by category or product type much more than using the search function to find something; conversely, on Amazon, the customer is known to start their shopping in the search box.
A keyword campaign doesn’t generate as many impressions as a Sponsored Product or Display ad might, but conversion can be higher because you’re reaching a customer who is looking for something more exact—and if they find it in your product, you have a greater chance of closing that sale.
Available on: Wayfair, Lowe’s, Home Depot
Review programs are those designed to help a manufacturer build up quality reviews for a particular product—something that enhances the overall quality of the SKU and can increase conversion.
“Reviews are fundamental for a SKU,” said Calli. “You want a SKU that someone clicks into, paid or not, to have the highest chance of conversion.”
There are typically two approaches to review programs. One is to offer a sample product to a customer of the retailer, typically someone who has been vetted and verified as part of the program. The customer will review the product on their own and deliver a “quality” review (typically defined as a minimum character account, a star rating and a photo or video). While the review is incentivized, it is not guaranteed to be good or bad. A sample program usually generates reviews more quickly than review accelerators.
A second approach is offering a rebate or credit to a customer (paid for by the manufacturer) after they’ve already purchased a product. These can take longer because the product has to sell on its own, but it is usually the cheaper of the two.
As far as how many reviews to aim for, that depends on the manufacturer. Wayfair says products with five reviews can drive a conversion rate that is 3 times higher than those without. Home Depot aims for products to have 50 reviews. It’s up to manufacturers to determine where they think the investment will have the biggest impact.
While PPC, display, keyword and review programs are the most common opportunities, but retailers may have unique programs outside of those that are worth inquiring about to make sure you understand all of the plays that will help your products reach the end customer.
Like any marketing program, you don’t want to just throw budget into it without thinking through what you want to achieve and how you’ll measure your success. To ensure you have a strategic pay-to-play approach, manufacturers will want to work through the following:
Before you put budget toward boosting a SKU or your overall brand, make sure you’ve optimized every “organic” opportunity in the ways your brand and products are listed on the website.
That includes making sure your SKUs are showcasing all of the product’s selling points, ample imagery, lifestyle imagery and product details that answer every customer’s unasked questions.
“It can be risky to invest budget into SKUs that aren’t in a healthy spot,” said Calli. “And it can lead to misleading the customer, which can lead to bad reviews, which is the opposite of what you want your paid programs to do.”
Before putting a product into a pay-to-play program, make sure you’ve optimized all of the elements in the listing itself to give it the best chance of being a successful campaign.
The path you choose for a paid program might depend on your category, your product, your competition—but it’s also going to depend on your overall goal. Manufacturers should define this up front: Is it to gain visibility? Build bestsellers? Hit a certain ROI?
“We all want to boost sales, but how you go about that will be different,” said Jennifer Phelps, BrandJump Account Manager. “You have to know your strategy.”
It’s also worthwhile to set realistic expectations, especially around budget.
“We can work with smaller budgets, but ROIs should be kept the same scale,” Jennifer added. “Most retailers are looking for 5% of sales to have a successful campaign.”
Budget is the biggest deterrent for brands to participate in pay-to-play programs, so they should expect to plan for it.
“There are some categories—like lighting—that are so competitive right now, that if you don’t invest a decent amount toward marketing with that retailer, you just won’t see results,” Jennifer said.
If you’re working with a limited budget, that’s OK. There are a few options for keeping costs contained, particularly with sponsored products:
Start with a less-competitive bid, which can be most effective during non-peak times when other campaigns have run out of budget for the day.
Use a daily budget cap on your campaign (though if your budget runs out early, you can miss out on key shopping windows in the remaining hours of the day)
Set a campaign cap to create guardrails around how much any particular campaign is spending from your budget.
“A limited budget really just limits the number of SKUs you can include, so focus on one or two strategies and the best SKUs to include in those,” Calli said.
Understanding what success in any program looks like is not only important for reporting the return on investment, but also for making adjustments along the way to maximize the opportunity. You’ll want to know what data will best serve your reporting needs, plus what to consider when making optimizations.
When it comes to pay-per-click programs, one of the most common numbers you’ll see reported back is Return On Ad Spend, or ROAS. This is the best measurement of how efficient your investment is. You can have a high ROAS with low revenue—but you didn’t spend a big chunk of that revenue to get there.
That said, revenue gained is, of course, a worthwhile metric in itself. A wholesale ROAS of anywhere from 700-1200 is generally a healthy range where you’ll see the revenue impact as well.
You can also look at the efficiency of your spend. This tells you if you’re running through your budget in the time you expected. If the budget is not being spent, you can make adjustments accordingly.
There is an additional metric that is frustratingly hard to measure: the halo effect. If a paid campaign is going well—driving traffic to your products, products getting added to carts, converting to sales—all of that will play into a product’s overall success that can stretch far beyond any paid campaign.
“The traffic you get from a campaign influences the Amazon algorithm, which in turn influences the organic ranking,” Krystal said. “So even if you aren’t seeing the ROAS you want, you’re still getting a benefit from those campaigns.”
If a campaign isn’t performing as expected, it can be tempting to change course or turn it off altogether. But you’ll want to give it some time before throwing in the towel.
Expect to let a program run for at least 30 days, but up to 3 months with active management to get a true read on its success.
“In the first 1-2 months, there can be a lot of adjustments like changing bids, shifting campaign types, trying different SKUs or promotional periods,” Calli said. “Three months will give you both consistency and a decent timeline to indicate what’s working.”
Brands may also want to be more aggressive with their budget and strategy during seasonal or promotional periods. If you’re selling a seasonal product, it can be pricey to up your investment over the whole season, so think about the periods where being more competitive would drive the biggest impact—for example, during holiday weekends or retailer promotions.
No pay-to-play program is going to be set-it-and-forget-it. Brands must be nimble and flexible along the way, ready to give a campaign time to play out, but also ready to make incremental changes.
“You may be cruising along with the same strategy you’ve had for months, but you can get outbid in a day, or even in a click,” Jennifer said. “You have to always be ready to adjust to keep performing.”
That nimbleness also applies to knowing how and what to adjust if results don’t provide a clear compass.
“Sometimes there are signals, sometimes not,” Calli said. “It’s possible that a product just might not convert on a particular website.”
Leveraging pay-to-play programs can significantly increase product visibility, enhance your brand presence and help you stay competitive in the home furnishings market. While you’ll want to map out and use a strategic approach to drive KPIs, the benefits of participating in these programs will extend beyond immediate sales, from providing a little more insight into the shopper, enhancing organic rankings or creating a sales halo effect around your brand and products.
No matter your goals, any home furnishings manufacturer should have a plan for how paid programs fit into their ecommerce growth strategy.
“Once your listings are optimized, paid programs are the first lever to pull,” Krystal said. “If you expect to grow, you should expect to advertise.”