How AI helps MSC Industrial Provide fine-tune its advertising and marketing
MSC Industrial Supply Co., a metalworking and maintenance, repair, and operating (MRO) product distributor, generates approximately 60% of its total sales of more than $ 3 billion through e-commerce. To support its steady stream of customers, the company has partnered with its digital marketing agency and Google Inc. to incorporate artificial intelligence into its paid search advertising campaigns to get strong results early on in terms of ad spend and gain market share .
Rich Bonfiglio
In this Q&A discussion, Rich Bonfiglio, MSC’s Senior Director of Digital Marketing, discusses how AI is becoming “an integral part of new program development and management.”
AI is now an integral part of how we develop and manage new programs.
DC360: What made MSC use AI in paid search?
Bonfiglio: We were looking for a more efficient way to capture demand in order to increase sales through our digital channels. Through a close partnership with Google and our digital marketing agency, we have started testing the Target Return on Ad Spend (tROAS) for some of our paid search campaigns.
DC360: What results did MSC initially see?
Bonfiglio: Our tests gave almost instant results. In all of our test groups, we were able to determine a 68% increase in sales due to an optimized increase in expenditure. More importantly, the test group had a 40% increase in ROAS compared to the control campaigns.
DC360: What optimizations did you make along the way?
Bonfiglio: The most significant optimization we made along the way was to trust the results and set a goal for the percentage of the program we would manage through AI. We initially set a target of 75%, but quickly exceeded it.
DC360: What overall results has MSC seen?
Bonfiglio: The most significant achievement I can point to is our ability to continually expand and optimize the MSC program, while maintaining historical profitability at a faster pace than manually managing the program.
DC360: Are there certain campaigns that you can highlight that performed well?
Bonfiglio: It is difficult to point out specific campaigns as our use of AI in digital marketing is constantly evolving. It has led us to rethink campaign structures, objectives and the areas to which they should be applied. It is now an integral part of our new program development and management.
DC360: In which areas has MSC achieved significant improvements through the use of AI?
Bonfiglio: Most of our paid search campaigns have seen improvements, with 90+% of our program now managed through AI. In some cases the improvement is a higher return; in others it is the ability to quickly scale and capture market demand.
DC360: Any key takeaways that you would like to highlight?
Bonfiglio: AI has not replaced the need for human intervention. This was most evident in the early days of the pandemic, when market conditions changed at an unprecedented pace. For the daily adjustments, we used the expertise of our agency partner, while the models collected the necessary signals to optimize themselves to the rapidly changing market. This wasn’t a long process and we were quickly back to relying on machine learning to streamline our approach.
DC360: What does MSCs mean AI approach, what will it look like in the future?
Bonfiglio: Paid search campaigns are just one area where AI is used and we intend to keep increasing their usage to fuel cross-channel growth.
(This article is part of a longer DC360 B2B report on B2B marketing and conversion strategies.)
Mark Pickett, MSC Industrial Supply’s VP of Cross-Channel Growth, will discuss customer experience strategies during the online Fast-Tracking B2B Ecommerce Sales & Expansion event presented by Digital Commerce 360 on August 12th to speak.
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