Abbreviated as His Master’s Voice, HMV is a British entertainment retailing company having operations in United Kingdom and Republic of Ireland. It enjoys the legacy of being as old as the era of gramophones. What started as a Gramophone Company in 1902 began its retail venture by opening their first HMV shop in 1921. It started selling Disc records in these shops.
Soon after its inception, HMV started to expand its operations in London and it became a leading specialist music retailer in United Kingdom by late 1970s. The company continued its growth and by 1990s it had about 320 stores running in the country, It also celebrated 75 years of existence in 1996.
HMV had its share of mergers and acquisitions as well, in 2006 a private equity firm tried to bid for the group as well. Things started to fall with rising competition and in 2011 the company announced that its profits had fallen by almost 90% to previous year.
Later, the company was bought by Hilco UK and it currently runs under their control and ownership.
Business Objectives Of HMV:
There were two main objectives of HMV amid the crisis in 2011:
- To increase volume of sales as company had started recording low profits.
- To improve ROI (Return On Investment) on monthly basis.
Strategies Adopted By HMV:
HMV wanted to increase their spending on online advertising as online retail had picked up exponential growth. Hence, it was wise to expand the online reach by investing more in PPC campaigns.
As a strategy to meet its overall objectives, HMV approached OMD, a search agency providing SEO and PPC solutions. Having run their display ads for 3 years, OMD was up for another task given at hand.
Challenges of OMD:
- Product and Adgroup Categorization
- Product and Keyword Categorization
Product and Adgroup Categorization – Due to large number of products offered, main challenge faced by HMV was to categorize keywords with their respective AdGroups and to segregate the highly searched items to maximize ROI.The search traffic was diluted with different results for each product.
Product and Keyword Categorization– OMD had to organize the poor product and keyword categorization. e.g. Keywords such as ‘PS console‘ and ‘PS3 games‘ were grouped together, which was detrimental to the campaign as both the keywords have a wide range of offerings in their own.They used Separate AdGroups for different keywords. It made sense because of the different products offered by the company. So, within a adgroup there were products with similar prices as well as offerings such as games and consoles.
Actions taken by OMD –
- Separate AdGroups
- Reached more search Engines with expansion on MSN and Yahoo
- Organized Campaign (Campaigns broken down to generic keywords such as comedy,horror,films etc.)
OMD completely restructured HMV’s PPC campaign with 130 campaigns including campaign, adgroup and keyword expansions.
Results Achieved By HMV:
OMD had done their job! Facing tough challenges, it steer cleared the campaign with astounding success.Here are the results achieved –
- Doubled ROI
- Revenue increased by 171%
HMV tasted success by achieving their objectives – ROI and sales volume. More Profit margins also allowed HMV to re-allocate the budget to different products.
A Case Study is never complete without learning from it. When a company is going through a rough patch and encounters low sales volumes, few wise steps can bring it back in the game. In this case we have a retail company with many products. In such times, key drivers can be –
- Separate Adgroups
- Expansion to other search engines
- Refined keyword campaigns using generic terms
With a more granular and organized structure HMV was able to adjust budget to highest margin campaigns and improve ROI. Improved Categorization and expansion of keywords proved in a better CTR and eventually more conversions.