E-commerce businesses are sailing in the ever-changing digital technology landscape. In 2023, where will the trends head? What are some of the keys for e-commerce businesses to keep in mind to grow their business?

Simon Hsieh, Head of Performance, Tech & Export at Google Taiwan, shared what he thought was the most crucial concept of e-commerce: “Platforms such as Google or Meta are not necessarily just a media, they are a kind of sales channel. Many would consider online advertising as an outdoor billboard, which you can put ads on it as long as you have budgets and designs. Actually, online advertising is more similar to a channel with great flexibility, where we can help brand clients find their customers, sell their products and grow their businesses! ”

Machine Learning Finds Best Selling Opportunities

But how does the platform enable such capabilities? “The credit goes to machine learning. Not simply a cool tech, it can be utilized to find selling opportunities!” In this era of mobile devices, one can say that the space for digital ads is boundless. As long as the clients have the right sales strategy, they will be given a great sales opportunity.

“The right sales strategy requires keeping track of several KPIs, such as selling price, ad spend, and the ROAS (return on ad spend),” Simon explained with figures. Assuming each product sells at NTD $300, and the client is willing to pay $100 for ad spend, then the ROAS would be 3. Once we identify the target number, Google’s machine learning algorithms will track down all the possible selling opportunities with the ROAS being 3 amongst the boundless online ads space. It is the power of machine learning.

Machine learning algorithms also allow ad customization according to different customer preferences. “A product might have many selling points. Some customers care about its look, some value its usability, and some are price-driven. In this regard, clients can prepare multiple sets of ad materials, such as two titles, five ad copies, and 10 video clips. The machine learning model will mix and match different ad combinations catering to various customer segments like the price-sensitive group or those value design aesthetics. What’s the purpose of such targeted advertising? We are all in for closing deals.” This form of advertising has its name–performance-based advertising.

Fueling Businesses: Unlimited Investment within Target

There are barriers to entry in the field of digital advertising. For brands, partnering with a great media agency can save efforts for better results! Savvy in working with media agencies, Simon found that many of them do not have the right mindset. Many agencies allocate ad budgets proportionally with uneducated guesses. For example, they might spend 50% of the budget on search, 35% on Youtube, and 15% on Display. However, such budget allocation does not necessarily help their clients drive sales.

“A good media agency will discuss with their clients, review previous sales performance, and understand their business goal. Then they will design an advertising strategy that factors in the sales data,” said Simon.

Simon continued, “five years ago, I started to talk about a concept of ‘unlimited investment within target‘ which many people did not understand at that time.” The “target” refer to the business goals, mostly ROAS or CPA(cost per acquisition). If an ad is making money for clients, then it makes sense to capitalize more budgets on the ad.

“Those who get the gist of this idea will come to me and ask, ‘how do I spend my money?’ If the money does not get spent, they are concerned because it means the business is not growing.”

“Agencies have to take in performance-based metrics. If you stick to brand awareness as the key metric, what the system would find are those people who see your ads, but not those who make the purchase. If the advertising strategy does not align with your business goals, you are wasting the budget. When your competitors are winning with the right metrics, your brand may fall behind in the game.”

Media Agencies as Business Partners

When brands are choosing an agency partner, Simon finds exploring the following questions a good start:

1) Does the agency familiar with GA(Google Analytics)?

2) Does the agency complement my brand? Can the agency produce performance-based materials?

3) Can the agency produce high-resolution video clips at a low cost?

4) Can the agency discover the selling points of my products, and create a synthetic performance with machine learning algorithms?

5) Can the agency identify underperforming materials and make optimization?

“Agencies are the business partners, and they help clients develop sales-driving ad strategies. A powerful agency can even tell its client which platform has the potential to capitalize on.”

Simon insisted that the data analytic capability is a must-have for agencies. Media agencies need to identify and optimize underperforming materials on time and help clients eliminate waste in their budget. Which video clip attracts customers? Which content goes viral? These insights are signals for future strategic planning. “The accumulated data can inform us of possible actions such as adjusting ad materials, tweaking the target audience, or changing the ad frequency.” With adjustments made correctly, the ROAS will improve accordingly.

In this interview, Simon also shared his observation on HH Galaxy. “Many media agencies focus themselves on media and prioritize media relations building. Unlike them, HH Galaxy provides its clients with fully-integrated services from sales and marketing to business operations. Assisting everything from product listing to data analytics, and from advertising to logistics, HH Galaxy has tremendous advantages in helping their client succeed. HH Galaxy is irreplaceable in the market.”

Digital Trends in 2023: Video Contents

When asked about digital advertising trends in 2023, Simon promptly replied, “driving conversions through video content is the future. Customers can make purchases while watching short videos or live streaming.”

Youtube Shopping will be launching in Taiwan soon. Simon’s team partnered with Mr. & Mrs. Gao, a famous youtube channel, for market testing. They displayed product links of fan merchandise when Lao Gao, the YouTuber, was doing live streaming. The audience could make purchases immediately with a few clicks, and the result was surprisingly good. “We believe Youtube Shopping is the key growth driver for cosmetics and apparel brands. In the future, it will benefit many other industries.”

Advertising is the lifeblood of an e-commerce business. The performance of ads determines the sales of a product, calling the shots for a brand in the Taiwan market. In this era of e-commerce where advertising is ubiquitous, the HH Galaxy digital media team focuses on performance-based advertising to pursue actual purchases. They value CPA (cost-per-action) over CPC(cost-per-click) and buckle down to increase ROI on ads for better sales performance on e-commerce platforms. An expert in performance-based advertising, the HH Galaxy digital marketing team is the certified partner of Google and Meta, and the designated partner of Shopee and PChome for performance-based advertising. Less than five companies in the industry enjoy such unanimous appreciation from these major platforms.

How to Leverage Historical Data?

It is a well-known fact that data is king in the e-commerce business. “Data matters, but how can we help clients achieve their performance goals?” April Chang, the director of Digital Media of HH Galaxy, explains how the team utilizes data to drive performance. “Unlike other media agencies, our team works with clients on budget planning in a performance-driven manner. First, we would identify the total sales target, and then calculate the ‘advertising-to-sales ratio’ based on historical data. Next, we use the ROAS (return on ad spend) to calculate a client’s actual advertising spend.”

Applying actual figures, say the total sales target is 50 million. According to historical data, the advertising-to-sales ratio is 20%. Based on our assumption, when the ads spend brings 20% of sales (i.e. 10 million), the total sales target is likely to be achieved.

“With the ads-to-sales target of $10 million, we will estimate the ROAS according to historical data. Assuming that the figure is 8, the advertising spends that the client needs to invest is $1.25 million. If we can budget $1.25 million for advertising, it is possible to reach the $50 million sales target.”

The HH Galaxy team has a data-driven mindset and conducts sales forecasting based on historical data. When the team onboards a new client, they would first work on a few small campaigns to accumulate data for key campaigns. “we will let them know if a client allocates too much budget.”

During this year’s Double 11 campaign, HH Galaxy has converted over NTD$ 420 million in sales for clients in a single month and brought over NTD$ 2.7 billion in cumulative sales in 2022. The team recommended their clients start deploying campaigns as early as September and October. Moreover, they suggested clients use Google’s latest performance-based advertising tool “PMAX NCA” for new customer acquisition.

The HH Galaxy’s data indicated that compared to October, the average ROAS of PMAX NCA ads was the highest among all performance-based advertising tools during the Double 11 period, 220% higher than other performance-based ads.

Publish Performance-based Ads on Multiple Platforms With a Single Click

“Nowadays, everyone has a social account. The process of publishing digital ads is not difficult, brands can do it on their own. Yet the real challenge is to identify the effective one that outperforms other ads as quickly as possible. If you acquire this information, you can invest intensely in the most effective ads.”

HH Galaxy developed the “Power AI System,” which allows clients to publish ads on Google, Meta, and Shopee with a single integrated platform. It saves time and effort to deal with different systems on each platform. Once an ad is published, the Power AI system instantly collects and visualizes data, providing clients with real-time conversions and results.

Each client will have their own Dashboard, which integrates search ads data from Google, Facebook, and Shopee, as well as sales data from Momo, PChome, and the brand-selling site. The Dashboard shows indicators such as sales revenues, average order value (AOV), and conversion rates, enabling clients to compare the real-time performance on each platform and grasp the key to growth.

“We value data and want our clients to have real-time access to data. If we can better understand the data, we can help them achieve better results.” Since the launch of the Power AI system in January 2022, it has served more than 500 clients.

Besides, HH Galaxy integrates an AI ad creation tool to streamline the workload. Clients only have to prepare a set of contents and ad materials for a campaign without having to resize everything to satisfy the requirements of each platform.

This year, an international jewelry brand used this tool to design a layout, and adjusted ad materials according to the Double 11 campaign in real-time, speeding up the ad creation process. Compared with the performance of last year’s Double 11 campaign, CPC dropped and the overall traffic increased by 135%.

HH Galaxy will analyze the data performance of each month and send monthly sales trend reports to all Power AI clients. “We put the sales performance first and conduct ROAS analysis on the monthly sales. Then, we will look at historical data, ad performance, and target audience. Lastly, we make recommendations for future operationalizations. ”

New Product Launches on Crowdfunding Platform “Zeczec”

In 2021, HH Galaxy helped its client Roborock win record-breaking results on Zeczec, a crowd-funding platform in Taiwan. Roborock S7+, the latest model of Roborock’s robotic floor cleaning devices, has attracted 10,847 sponsors and raised NTD $210 million in just over a month. This project broke records on Zeczec and was the highest-funded crowd-funding project in Taiwan. Behind the remarkable achievement, it was the HH Galaxy team who helped design and execute the advertising strategy.

“We use sales figures to calculate ad spends. We ask about the ideal sales target and use conversion rates to reverse-engineer how many views are required to achieve that sales target.” Roborock and HH Galaxy conducted a concept testing survey to identify potential customers and offer early-bird discounts. “In the traffic-driving process, our team kept track of the sales performance and continued to discuss with the client to maximize the performance. We are glad to help achieve such an excellent result.” Roborock launched two successful crowd-funding projects on Zeczec, which earned NTD $210 million and $140 million respectively. Both projects were partnered with HH Galaxy.

“Zeczec gradually becomes a new go-to platform for product launches in the technology appliance category.” Later, HH Galaxy suggested a consumer electronic brand launch a new product on Zeczec, and that product brought $18 million in sales, which was the best-seller in the same product category.

In November 2022, HH Galaxy launched the “De’Longhi Automatic Espresso Machine” on Zeczec. From idea creation to actual execution, this crowd-funding project was taken care of by the Biz team and the Digital Marketing team of HH Galaxy. Ultimately, the project raised over NTD $5 million.

These hands-on experiences enabled HH Galaxy to discover new channels to help clients better sell their products. “Pre-orders on the crowd-funding platform helped our clients to determine the demand and lift inventory pressures. Once a project is successfully funded, other e-commerce platforms will be more willing to support.” In addition to advertising, HH Galaxy provides a one-stop solution from content design to product launching on the Zeczec platform.

HH Galaxy embraces a data-driven mindset and strives to provide user-friendly systems and deep insights. In the past two years, they developed the “Power AI System,” and helped clients achieve excellence. The digital media team continues to evolve with the ever-changing industry, bringing their clients quality service and driving better sales results.