MSC Industrial Supply Co., a distributor of metalworking and maintenance, repair and operations (MRO) products, does about 60% of its more than $3 billion in total sales through ecommerce. To help its steady flow of customers, it has worked with its digital marketing agency and Google Inc. to incorporate artificial intelligence in its paid-search advertising campaigns, producing strong early results in return on ad spend and gaining market share.
In this Q&A discussion, Rich Bonfiglio, MSC’s senior director of digital marketing, addresses how AI is becoming “an integral part of how we develop and manage new programs.”
DC360: What prompted MSC’s move to use AI in paid search?
Bonfiglio: We were seeking a more efficient way of capturing demand to grow revenue across our digital channels. Through close partnership with Google and our digital marketing agency, we began testing target return on ad spend (tROAS) across some of our paid-search campaigns.
DC360: What kind of results did MSC see initially?
Bonfiglio: Our tests yielded almost immediate results. Across our test groups we saw a 68% increase in revenue from an optimized increase in spend. More importantly, the test group showed a 40% lift in ROAS compared to the control campaigns.
DC360: What kind of tweaks did you make along the way?
Bonfiglio: The most significant tweak we made along the way was to trust the results and set a target for the percentage of the program that we’d manage via AI. We initially set a target of 75% but quickly surpassed that.
DC360: Overall, what results has MSC seen?
Bonfiglio: The most significant result I can point to is our ability to continuously grow and optimize MSC’s program, maintaining historical levels of profitability, at an increased pace compared to managing the program manually.
DC360: Are there specific campaigns that you can highlight that performed well?
Bonfiglio: It is hard to point to specific campaigns as our use of AI within digital marketing continues to evolve. It has caused us to rethink campaign structures, goal setting, and what areas to apply it to. It’s now an integral part of how we develop and manage new programs.
DC360: In what areas has MSC seen major improvements with the use of AI?
Bonfiglio: Improvements have been realized across the majority of our paid-search campaigns, with 90+% of our program being managed via AI today. In some cases, the improvement is increased returns; in others, it’s the ability to quickly scale and capture market demand.
DC360: Any key learnings that you would highlight?
Bonfiglio: AI has not replaced the need for human intervention. This was most evident during the early days of the pandemic when market conditions were changing at an unprecedented pace. We leaned on our agency partner’s expertise to make daily adjustments, while the models collected the signals needed to optimize to the rapidly changing marketplace. This was not a long process, and we were quickly back to leaning on machine learning to optimize our approach.
DC360: What does MSC’s approach to AI look like going forward?
Bonfiglio: Paid-search campaigns are just one area in which AI is being deployed and our intent is to continue to grow its usage to fuel cross-channel growth.
(This article is part of a longer DC360 B2B report on B2B marketing and conversion strategies.)
MSC Industrial Supply’s Mark Pickett, vice president of cross-channel growth, will speak on customer experience strategies during the online event “Fast-Tracking B2B Ecommerce Sales & Expansion,” which Digital Commerce 360 will present on Aug. 12.
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