How can we explain the unexpected 25% increase in cost-per-click for New Engen's search engine marketing campaigns during the holiday season?

Introduction

The unexpected 25% increase in cost-per-click for New Engen's search engine marketing campaigns during the holiday season is a critical issue that demands immediate attention. This analysis will systematically identify, validate, and address the root cause while considering both short-term and long-term implications for our marketing strategy and overall business performance.

I'll approach this problem by first clarifying key details, ruling out external factors, and then diving deep into our product, user journey, and metrics. From there, I'll form data-driven hypotheses, conduct root cause analysis, and propose validation methods and next steps.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking this might be related to increased competition. Has there been a significant change in competitor activity during this period?

Why it matters: Competitor actions can directly impact our CPC. Expected answer: Yes, we've noticed increased competitor spend. Impact on approach: If confirmed, we'd need to analyze our bidding strategy and ad quality.

• Considering the scale of the increase, I'm wondering about our campaign settings. Have there been any recent changes to our campaign structure or targeting?

Why it matters: Internal changes could explain sudden cost increases. Expected answer: No major changes reported by the team. Impact on approach: If no changes, we'd focus more on external factors and market dynamics.

• Given the holiday context, I'm curious about our ad content. Have we adjusted our ad copy or landing pages for the season?

Why it matters: Ad relevance affects Quality Score and CPC. Expected answer: Yes, we've implemented holiday-themed ads. Impact on approach: If confirmed, we'd need to evaluate the performance of these new ads.

• Thinking about user behavior, has there been any notable shift in click-through rates or conversion rates during this period?

Why it matters: Changes in user engagement can affect our ad performance and costs. Expected answer: Click-through rates have remained stable, but conversion rates have dropped. Impact on approach: This would lead us to investigate the post-click experience and landing page optimization.