Business Innovators Radio - Interview with Liam Patterson, CEO at Bidnamic

Episode Date: May 24, 2023

Liam started his first business aged just 14 and ran a number of successful e-commerce ventures before co-founding Bidnamic, a marketing technology platform that helps retailers unlock the full potential of Google Shopping.Liam is a regular commentator in broadcast, national, and trade media including appearances on the BBC, The Drum, and The Grocer, and is a knowledgeable speaker on topics including e-commerce, digital marketing, advertising, retail, tech, business, startups, and Google Shopping.Learn more: https://www.bidnamic.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-liam-patterson-ceo-at-bidnamic

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of influential entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with us Liam Patterson, who's the CEO at Bidnamic. Liam, welcome to the program. Thanks for having me, Mike. You're welcome. So I want to get into what you do and how you do it and how you are different than most providers out there, but get it started with your story. What is your background and how did you get into the industry?

Yeah, absolutely. So I'm an entrepreneur. I've been building e-commerce businesses, specifically e-commerce marketplaces for many years, built to successful marketplaces. So kind of been on the retailer side of scaling businesses and of course entrepreneurial side of going out raising money and scaling up those companies. And I guess they had one thing in common, which was a real ability to scale and grow through a specific single marketing channel, which was Google Search. And even more specifically, it was Google shopping. So you might have seen when you've gone to look and shop for any products, you type into Google, the name of that product. and a carousel appears right at the top of the main Google search.

It shows typically about five products. You see a little tile, the image, the price, which retailer is selling the item. And what a lot of us don't know is shoppers is that that is a paid marketing channel. And as soon as you click on to one of those adverts, it costs the retailer money. And it can cost them as little as a few cents and as much as even $1,000 or even hundreds of dollars quite commonly is spent per click. and that's the challenge that us as a technology business solve, which is how much do you pay for that click on Google Shopping

and why do you pay that much? So we've got a big team of researchers now, of PhD researchers, of engineers, who have understood all the nuances behind that click, such as what's the person searching for, what are they looking for, and we use all this information to compute and understand and set the right cost per click.

to pay for that click. Yeah, I love it. And, you know, I know that there are definitely these basic things that people must understand and we want to get into some of those. But from me hearing that, I don't know your world, but let me ask you a question and see if I'm pretty close. We will Google, let's say, our own brand name and then see our own ad and notice that the ads that we're running are tied to our own brand name, which should never happen.

Because if someone Googles your own brand name, you should just show up in the search anyway, and you should not have your ads tied to that, which is costing you clicks. Do you see that frequently? Yeah, we do. Yeah, unfortunately, and it even happens to us as well. So they're typically what's called search ads. So, yeah, when someone searches for your brand, maybe the podcast name, maybe your business name, you can bid on those words.

So you can bid on your competitors, for example. but unfortunately, they can also bid on your name. Even when it's a trademark, they can still do that within Google. And that means that when they click on, you know, someone clicks onto that, they're going to go through to their website. So it's an opportunity for them to piggyback off your success, off your notoriety, and use that to drive traffic to their own website. And sometimes it's frustrating for shoppers, for people doing research,

because, you know, you think you're going to one website, but suddenly you're on an entirely different website altogether. Also, it can be useful, I suppose. The opportunity is that that person discovers a competitor to what they were looking for, and maybe there's an element of different price or different service levels, which is why people use that technique and that tactic. For us, it's more that we run e-commerce ads. So when someone's searching for a specific product, sure, they might be branded.

They might be, for example, Nike men's running shoes. but what happens is that all the retailers of Nike that have that Nike product can appear on this carousel. And they're all battling and competing against each other to show up because there's only typically five of these positions. And they want to take those positions on that carousel. So it's pretty fierce fighting ground. A lot of traffic, you know, a lot of people going to Google looking for these products at the point that they're ready to buy. So it's a very profitable channel, but it's a very highly competitive as well. So I'm sure there's a science that helps you get into that top five, but then how do you stand out if you're not number one?

So, you know, what if you're number four or five? Is there anything that you recommend in the messaging, the title, the description that's going to help someone glancing at that top five to pick up on yours if you're not number one? Yeah, absolutely. So unlike SEO, which is the kind of the rankings where we're trying to get the, get the products and the pages up to the top of Google in a kind of a linear format where the highest is there, you know, is dropping down and maybe going to page two, Google shopping works a little bit different. So it's a long thin carousel, which has these typically five positions. And unlike SEO and other areas, and this is all about how much we're willing to pay Google. So for any product,

we say that we get any product to show up in front of customers that are looking for that product. The problem is how much we're willing to pay because it's an auction. So you've got to pay one cent or one penny if you're in the UK to be able to outbid the competitor. So it becomes very, very expensive to do that to get to the top. A less than you know with certainty and that scientific knowledge coming in there that by getting to the front of the carousel, you're likely to get a click, even if it's $100 or $200 that is going to be very profitable for you as a business. So we look at things around the business. So we look at what's the margin that they're selling?

Because someone who's selling a product that are 70 or 80% profit margin are going to be able to pay a lot more for a click than someone who's only 5 or 10% profit margin, who's not making much per sale. The other things we look at is the average order value. So how big is that order they're placing? Are they clicking through, like we have a retailer who sells golf balls, very low margin, very low cost, you'd think terrible item to sell.

But actually when people click through on this on their golf balls, they go through to their e-commerce website and they actually shop and they buy, you know, ping jumpers and jackets, golf clubs, bags, caddies. And they end up spending, you know, hundreds, if not thousands of dollars. So, you know, it's quite interesting once you start to understand the science behind what's bringing customers through to the website, or they're actually buying what the profitability of that sale they're making is. And then finally, what's the retention of that customer?

If they're buying something which is a replenishable product, maybe a hand cream, but that hand cream is going to be running out every couple of months. They're going to keep coming back and buying again and again. Razers, razor blades is a great example of that. I've got a big client who, again, they don't make much on the first sale. In fact, they make a loss, but they know that that customer is on a subscription. They're getting the razor blades every month and they're going to stay with them for a long time. So yeah, there's all these nuances which our software understands and computes and places that bid. And by placing that bid, the higher we're able to bid for it, the more we're going to move across the carousel.

So it's not so much to do with the titles or descriptions, whilst they are relevant to make sure you're showing up for the right type of products, the right type of search terms. It's really all about the bidding. So how much you can afford to pay and be able to pay the most to kind of muscle out. the other sellers and the other merchants to get to the front of that queue. And what predicates what you can afford to pay is what happens when someone clicks on the ad goes to your website and then makes a decision. Well, if they bounce right off, you're not going to be able to afford to pay much because you're not making sales and converting.

So one of the things you said was about golf balls. And if you click that ad and you go to their website and maybe it's like, oh, yeah, there's some golf balls, but there's also 14 other products and, you know, all surrounding golf, and that's wonderful. But what research do you see out there and recommend to your clients to say, okay, if this ad is about golf balls, send them to the page on your website only about golf balls. And then once they purchase the golf ball, maybe then you can go, oh, by the way, would you also need this?

Because people tend to get overwhelmed and confused if they see other things than what they initially click. Is there some thoughts around that? Yeah, absolutely. It's a really, really interesting point. So specifically from this Google Shopping channel, from this carousel of ads, what we're seeing, which is quite shocking, is that when people are clicking, we're seeing north of 50% of that traffic, which is coming through from Google shopping,

bouncing straight off. And it doesn't matter if it's us running the ads or if it's, you know, people are in-house doing it, or it's different agencies, you know, we're seeing this right across the board that more than 50% of the clicks, which are costing retailers' money every single time someone clicks, is bouncing right off the page. And we have two reasons why we're seeing that. The first one is that people are typing in generic terms such as golf balls and they're coming through,

but Google forces us to drive that traffic to a specific, what they call a product details page. So rather than be able to bring it to a collection or a category like you might do in a physical store or even bring it through to that on your e-commerce store, you have to do with Google shopping, drop it onto a single product page. So that means that they're suddenly coming, typing in golf balls, going through to one set of golf balls, and then they're not finding all the other types.

So quite often they find, oh, that's not the golf balls. I wanted a larger pack. I wanted a different brand. I want a different color. And they're not aware that that retailer sells it. So it's easier for them to press the back button, go back to Google, click a different ad. Maybe refine their search and then click a different ad. And this is what we call a bounce rate.

So it's when the page loads, but they don't make a single click. on the website, Google's still taking the money for that. And there's two reasons for that. One is product discovery. So being able to merchandise and show the right products very closely related to what someone's searched to be able to make that customer aware. And the second one is what we call page loading speed. So that's, I'm sure you've had it yourself, Mike, where you've clicked a product

or a website and you just wait for ages for it to load. And, you know, you're busy. Maybe it's on your mobile phone and you just go, right, this is taking too long. and you bounce back, you press the back button and go to someone who's got a faster website. Well, this page speed, they call it, is absolutely killing websites. The bounce rates are going through the route.

Because we have no patience as humans. Exactly, exactly, right? But, you know, I want to go back to what you said about the bounce and going to Google requires, the Google Shopping, requires you to go to one specific cart page or product description page. Is there any way on that product description page to have a section, maybe an all bold that says, not finding what you're looking for,

click here to be a full catalog. Something like that on that specific golf ball page in that example. Yeah, exactly. So there's a lot of things people can do. I suppose what we've seen is that typically people only have one, well, they only have one product page. And typically people, the assumed journey is that someone will go to the

homepage, learn about the retailer, they'd move into a category page like golf, they'd go into a subcategory like golf balls and then they'd select a product page. And at the point that they've reached that product page, they're ready to buy that exact item. So the page and the journey has all been set up for they found what they want. Now let's upsell them. Let's sell them a ping jumper. Let's get them some drivers.

Let's show them some related items, which they can also add to the cart. But the journey of Google shopping is they're coming straight in from Google Shopping Carousel onto the website, into a page. So what they're being shown, even when they've asked Google for golf balls, is they're being shown other items that aren't golf balls. They're showing T-shirts. They're showing, you know, all these other items, but it's not what they're looking for. So what we've actually built at Bidnamic is a dedicated landing page

built explicitly for the journey of Google Shopping. Really highlighting that point that you mentioned there, Mike, is we need to show them all the related items to what they've clicked so that they can feel, actually, if this is, This isn't the one set of golf balls I'm interested in. Here's all the other golf balls that this retailer has. And it's like that some of those are going to be what they want, what they're looking for. So in other words, if that brand does not have the shopping cart product detail page set up the way Google wants to see it,

and the bounce rate is through the roof, you're setting up a specific page to point the ads to so that when the buying journey is, I want this type of golf ball. So they're going right there and the bounce rate is improving, which then means that the sales are improving. And then ultimately, they're going to be going to the website to complete the purchase, but you're kind of putting a little layer in there to help that bounce rate and that buy your journey. That's exactly it. That's exactly it. So we're showing them all those products, which are very similar to what they clicked on. And we're putting one a carousel just like Google does, but above the fold.

So they don't have to scroll down. So there's a thing called the page fold, which is effectively what you can see when you look at your mobile phone and you don't scroll down or you look at your tablet or your laptop screen and you don't scroll down and you know these people who are bouncing, they're not looking down, they're already I've frustrated by how long the page is taken to load or it's not the right item.

It's not what they want and they're bouncing straight out of there. So what we've done is we've put a carousel above the fold, so right at the top of the page, which shows them those similar items. So the minute it loads they go, actually no, that's not what I want, but that's the one I want and they can see it straight away and click onto it. So it really reduces that bounce

rate through product discovery, through making them find the most similar alternatives to what they've clicked on, to keep them on the website, to increase the conversion rate, which is that click from Google to getting a sale or an order. And we've also stripped back all the things that make the page slow. We've used the best technology available, intense R&D, research and development to make this really, really quick. So we can load that page in under one second, so incredibly fast. And Google actually says that the difference between a page.

which is loading up to five seconds and a page which loads in one second or less is a 90% reduction in bounce rate. So it's a huge saving. Yeah, because speed is that important. And once you combine incredibly fast speed under one second to load that page and product discovery,

showing them all the similar alternatives above the fold, on the load, that's what we've generated just for Google shopping. So you can't find this page anywhere else. It's as soon as you click that ad, You land on that page, fully branded, fully integrated with that retailer's site. You can add to cart and buy then and there.

And we're seeing, yeah, just a breakthrough success for the retailers that are utilizing this technology, which we're calling discovery pages. And so once you've solved for the problem of bounce and load, what other benefits and techniques is your software searching for it to help optimize the campaign? Yeah, absolutely. So we're bringing in best of class partners to also improve things like recommendations. So being able to show visually similar items, when they do scroll down, they can see maybe it's in fashion, it's quite important. So if, say, it's in ladies' dresses, they're able to see the same pattern, the same cut, the same style of items coming through there.

We're able to see things that complete the look as well in fashion. So we're bringing in different types of recommendation, which can add value. We're also bringing in other partners which can, for example, load an overlay it's called. So effectively a pop-up that as you go to leave the page, it pops up and it says, hey, what about this? What about this discount? What about this other item you might not have seen? So it's just a way to catch them on the website, keep them there for that little bit longer, maybe catch an email address, maybe it was price. They can offer a discount.

So again, there are other technologies that we're bringing in to help improve the recommendation, the site search, these overlays to reduce bounce further. So we're bringing top top talent. And we're also connecting this to our core business, a Bidnamic, which is around how much we pay for a click. So what we're finding is that once we're able to reduce the bounce rate, that's directly increasing the revenue and the profitability that retailers are getting from every click, because they're reducing it from, say, 50% of that traffic bouncing straight away.

So 40%, so they're getting more profit and revenue per click. And our core software, Bidnamic, is all around how much they pay for that click. So we're able to take that profit, feed it back into their bidding, and drive even more profit and revenue from Google Shopping by winning more visibility for what they're selling. So, and this is analytics and data and myself do not mix. So all of this is wonderful to know that you know how to do it. But from an uneducated third-party perspective like myself,

listening to what you just said. It makes me wonder this question, which is. So I love, love, love, you've solved for these things. And then now the algorithm is going, hey, because now we've increased the profitability of each click because of page speed and the cart and relevancy and things like that. We now can bid more, which then gets you higher up, which then gets you even more clicks, which then turns into. So my question is, are there times throughout the week or month, a quarter, or year where all of that works better than others, or is it volatile to where on Monday of one week it's worse, and then on Tuesday it gets better so that your software is going, okay, we're going to start bidding lower because we've noticed the conversions have gone down, but all of a sudden,

now the conversions for whatever reason, it could be the weather, it could be that a time of year, it could be that, you know, whatever sports team won or didn't win, whatever the reason is, we're noticing that all the factors are the same, but your clicks are getting more profitable. So now we're going to bid more. Is there some real-time kind of relevancy to that pattern? Yeah, that's exactly it. Yeah. So in that how much we're paying for the click, there's so many different signals that are going on.

So we're using AI machine learning to predict and optimize those. So it's a great story, actually, of a product that was featured on a very popular TV show here in England. And the sales went from hardly selling at all. as this show aired, the amount of people searching for it went through the roof, you know, and suddenly, you know, there's sales coming through, the conversion rate, the click to sale, shot right up. You know, it was very low before. Suddenly this item is in hot demand.

So the system sees that. It sees that the revenue per click has jumped up, the conversion rate, that click to sale, the profit has gone up. So rather than if it was being managed by someone, you know, myself or yourself, you know, we've got plans on a Saturday or Sunday when this show aired, we're unlikely to spot there. Whereas the software sees that change in profitability, and it sees that it's not just one or two clicks, but it's hundreds of clicks. So it's statistically significant. And it moves the bid price up.

So it increases the bid, it increases the bid. It sees that this trend is still there. And then the following day, that hype started to go. It started to pass. The conversion rate is going down. The revenue per click, the profit per click is going down. It's getting back to where it was normally. So the system, again, goes the other way.

It starts moving the bid price down, following that trend, following that change. So, yeah, it's truly real time in terms of it's reacting to these changes. And we can overlay loads of different datasets as well. So like you mentioned, the time of day might be postcode, you know, or zip code. It could be the location is, you know, really is really popping in one location, but not in another. So again, we're able to zone in on that. And the core, the main thing we use to drive this is the search term. So what someone is putting into Google, you know, whilst it might change based on their age, their gender, the device they're searching on, the location, the seasonality, the thing that really, really drives the likelihood of her sale is what they've typed in.

If they've typed in running shoes, or if they typed in men's running shoes, or if they've typed in Super Boost, Addidas, men's running shoes, size 10, that's exactly, it's explicit. They're referencing a size, a model, a gender, a color, a brand. At that point, they know exactly what they want to buy. So the revenue per click and the profit per click is going to be so much higher on those detailed, long tail, we call them much longer, much more advanced search terms. And that's really where our system kicks in. So we're able to move a retailer's budget to targeting and maximizing those in market, those customers who know what they're buying, and avoid paying too much for the more generic awareness terms like men's running shoes. I love it. And I would suspect that when you are meeting with a new retailer to show this and maybe do some, you know, projections, the cost of your software is almost free in the sense because you're going, look, in 30, 60, 90 days, we are now going to optimize so that you're making more. So of course, you have to pay us for the software. But boy, before you started using this and compared to now in 30 days later or 60 days later, it is dramatically improving all of these areas. So I think that is spectacular.

what you're doing. And if someone is listening to this wanting to learn more, what's the best way they can learn more and then also reach out and connect with you to see if this could help their retail stores out. Yeah, absolutely. Yeah. Yes, but on, yeah, we're very much a performance product. So we're here to drive up, you know, growth or profitability. And yeah, we definitely don't see ourselves as a cost center, but as the technology, which is enabling that growth and that profitability to be reached and delivered. The best way to get in touch with the business would be to go to our website, which is Bidnamic, B-I-D-N-A-M-I-C.com. You can visit there.

You can inquire and speak to some of the team. We've also got over 50 plus case studies, and every case study references the brands, references their exact decision makers who are involved with that, their personal names, their job role, and also the stats. How much have we driven their revenue? How much have we driven their return? I'd spend their profitability. their growth and over what period as well.

So we're really proud of that transparency that we have with the many, many businesses that we've assisted on that growth journey. And in terms of myself, if they want to get in touch with me, the best route would be on LinkedIn. So Liam Patterson, CEO of Bidnamic. Well, Liam, thank you so much for coming on. It's been a real pleasure talking with you and learning about how you serve your clients.

It's been a pleasure. Thanks, Mike. You've been listening to influential entrepreneurs With Mike Saunders, to learn more about the resources mentioned on today's show or listen to past episodes, visit www.com.