The situation
Founded by Angus Thirlwell and Peter Harris, Hotel Chocolat has expanded from a humble mint brand in 1988 to 125 stores in the UK alone, selling a wide variety of chocolate-based confectionery. The company now operates a 140 acre estate in St Lucia where it grows its own cocoa.
Hotel Chocolat approached us in the summer of 2023, asking us to deliver a comprehensive strategy for their entire online marketing funnel including Paid Channels and Organic. The question they were most keen for us to answer was not where they should spend their money but when. Traditionally, PPC was a key area of investment due to its high return on investment. However they wanted to understand better how the channel worked alongside Organic Search, and test whether their Paid Search campaigns were cannibalising their Organic search results.
Competition on Generic terms remained high year-round, so it was integral that we had good coverage in this area. However when it came to Brand terms, there was more seasonal fluctuation, with competition intensifying during on-peak seasons like Christmas and Easter. After evaluating their current strategy and presenting our solutions, we proposed a test with four options:
The risk of being offline with Brand PPC was that we could reduce our visibility in the SERP, decrease brand awareness, and lose out to competitors. Nevertheless, we saw the value in exploring to what extent Organic search could capture the sessions and revenue that would typically come through Brand PPC. Maximising efficiency was particularly important as CPCs were increasing, therefore we were getting less value from our Paid activity.
Reducing our Paid Brand activity would also open up the budget for other spend such as top-of-the-funnel and middle-of-the-funnel Paid Social activity. By investing more in Facebook, TikTok & Pinterest, we would be able to reach new customers and increase consideration. Ultimately, we needed to move away from a last-click approach to Paid Media, and instead invest in areas that would lead to conversions further down the line.
The engagement
We ran the test in three phases over the full financial year:
During the first phase, we paused all Brand PPC activity. It was crucial that we monitored performance on a daily basis to ensure that competitors didn’t fill the gap. To judge how well Organic Search was recovering the revenue and sessions that would have normally come through Paid Search, we looked at the YoY changes.
Looking at Paid Search and Organic Search together, we could judge the test to be successful if revenue remained flat, or we saw an uplift YoY. Even if there was no uplift, consistency YoY would mean that the test was successful, as the budget saved could be invested elsewhere which would feed into long term growth.
The results
The test was a valuable exercise in understanding how important it was to be agile during paid search campaigns. Pausing brand PPC activity was effective during off-peak seasons, but ineffective during peak seasons. By pausing brand PPC campaigns during off-peak periods, Hotel Chocolat was able to increase combined revenue of organic and brand PPC by 18% YoY and use a significant amount of spend that would have been used for brand towards other activities such as generic acquisition on PPC and boosting brand-building on other channels.
In particular, by saving the budget on PPC that we could then invest into Paid Social, we were able to test new audiences. This is crucial to build long term growth, by feeding into the awareness and consideration of the brand among new customers. We were able to invest both in audiences we knew to be highly relevant and successful, and those that were more unconventional but were found to deliver great engagement.
Looking at our Share of Search, we could also see that there had been no negative impact from pulling back on Brand Search. Instead, our SoS was maintained YoY in the months we were offline, and the volume of searches increased YoY in peak times when we were able to invest more in brand-building activity.
However, a downfall of being offline with Brand PPC was that we lost the ability to create highly targeted messaging and shout about offers, as organic listings don’t allow for tailored messaging. And of course, the risk of competitors sweeping in with a competing offer was increased. Therefore, continuous monitoring and adjusting the plan on a daily basis was paramount, in order to know when to strategically push and pull the metaphorical lever.
We remained offline with Brand Search until early in the on-peak period, when we found that we were unable to maintain YoY revenue without Paid activity. Fortunately, we were able to remain agile and quickly resume. Following the end of the peak period, we were able to pause Paid Brand activity again, freeing up additional budget.
Overall, the test demonstrated the importance of avoiding silos in your media planning, and instead consider how each channel works in relation to the entire funnel. We were able to deliver additional value in Search with less spend, while investing more in Paid Social testing.
Stellar are an extension of our in-house team who understands our business and KPIs. They work extremely closely with us to ensure we have a robust strategy in place to help us achieve our goals.
Our team of experts are standing by to discuss how we can help to optimise and transform your business through digital-first marketing.
23.png)
