Categories
Google Shopping campaigns are a powerful way to engage your customers using the world’s most popular search engine. However, many marketers end up wasting this opportunity.
Why? Although many go above and beyond to include every relevant piece of information and lots of attractive product images, they do not have any formal strategy when it comes to bidding.
How you plan your Google Shopping bid strategy can essentially make or break your product visibility, and your return on advertising spend (ROAS).
In this article, we’ll share tips on setting the right Google Shopping bid strategy and optimizing your bids to make your Google Shopping campaign a success.
To set an effective Google Shopping campaign goal that maximizes your revenue, you need to determine which key performance indicator (KPI) objectives are needed to get you there quickly.
Here are a few options that you may consider:
As an e-commerce business, you may be interested in getting more clicks. That’s because a high volume of clicks can put your brand in front of a bigger audience, helping you generate revenue in the long-term. This can be an effective strategy if you are focusing on building your brand.
For an e-commerce store, the main goal is to yield a high number of conversions. This will help your brand build a base of paying customers at present, along with setting the basis for long-term success. It’s a good tactic if you have high-demand products that generate large profit margins.
Another goal could be to maximize your ROAS. In this tactic, you aren’t just focusing on the number of conversions, but you want to yield more conversions on products that generate a high return. This is a cost-effective approach, especially if you have a limited ad budget.
To create an effective Google Shopping bid strategy, you need to focus on three critical factors:
Once you know all these numbers, use this formula to determine your maximum bid:
Maximum CPC = Product Price x Gross Margin x Conversion Rate
Want to turn your Google Shopping campaign into a profit machine? Focus on these three things:
The success of your Google Shopping bid strategy largely depends on two fundamental variables: budget and revenue. In the graph below, you can see both these variables mapped out, with the budget on the x-axis and revenue on the y-axis.
In the context of bidding, the three stages identified in the graph are:
Consider the following bidding strategies:
The manual Google Shopping bid strategy involves setting your own maximum CPC for your campaign. You exercise full control of the amount you are paying for every click. However, this increased control comes at the cost of your resources.
For a large Google Shopping campaign, you will have to allocate more resources to bid management. That’s why an effective Google Ads campaign structure will help you concentrate your efforts on items that have the biggest impact on your brand.
Automated Google Shopping bid strategy allows you to optimize your advertising spend. By leveraging advanced machine learning, you can monitor your Shopping campaign’s performance and set a bid in every auction to help you accomplish your objectives.
You’ll find different types of automated Google Shopping bid strategies depending on your goals.
Attract the most clicks for your budget, increase site visits, or increase clicks on low-traffic products within a certain ad spend.
Automated Bid Strategy – Maximize Clicks
This will automatically set bids to get you as many clicks as possible within your chosen target spend.
Where to apply it – Campaigns and ad groups.
Increase conversions while staying in control of your bids.
Automated Bid Strategy – Enhanced cost-per-click (ECPC)
It can help increase conversions for manual bidding by automatically adjusting your manual bid up or down depending on the possibility of every click to result in a conversion.
Where to apply it – Campaigns and ad groups.
Get the most conversions or conversion value while meeting a target ROAS, which signifies the amount of revenue you want to earn for every dollar you spend on Google Ads.
Automated Bid Strategy – Target ROAS
It automatically sets your bids to maximize the conversion value while reaching your chosen average ROAS.
Where to apply it – Campaigns and ad groups.
Get the maximum conversion value for a given budget. You also have the option of setting a minimum Target ROAS to maximize revenue without going below a certain return.
Automated Bid Strategy – Maximize conversion value bidding.
This automatically sets your bids to maximize your conversion value while trying to spend the available budget you set.
Where to apply it – Campaigns.
The following are the key benefits of using an automated Google Shopping bid strategy.
Are you trying to bring more users to your website or more revenue to your brand? Automated Google Shopping bid strategy allows you to focus more on the overall campaign performance without worrying about how to set the perfect bid for each group.
For instance, you are selling Jeans, suppose you wish to maximize your sales for the Jeans category, and you’re willing to spend US $5 for every US $100 of sales. So, you set up conversion tracking to report a conversion for every purchase where the value is the purchase amount.
Next, you set up Target ROAS as the automated bid strategy for Jeans’ campaign, with the target value of 500%. There’s no need to decide how to bid for performance optimization. The automated bid strategy will bid for you in every auction by considering how every product performs to help you meet your target.
You only have to enter your campaign performance goals. The automated bid strategy you choose will respond in real-time, accounting for your campaign’s past clicks or conversion data.
For instance, suppose you want to maximize the number of clicks to the product pages on your site. So, you set an average daily budget of US$150. Next, you set up Maximize Clicks as the automated bid strategy with a budget of US$150. The bid strategy will bid for you automatically to help you get the maximum number of clicks for your budget.
You need some bidding rules that guide your Google Shopping bids based on specified KPIs. These include:
Perhaps, you’ve got a group of best-selling or high-margin products that are consistently yielding significant conversions. You need to give special attention to these star products and better control their bids. That’s where SKU level bidding comes handy.
SKU (also known as Product ID or Item ID) level bidding empowers you with greater control on your bidding strategy by placing bids on the product level versus general product characteristics like category, brand, or custom labels.
For instance, you can create an SKU level campaign for the following categories:
Next, place a separate bid for every SKU in your campaign. Use SKU level bidding on a selected group of items to closely monitor items that generate maximum profit.
SKU level bidding isn’t suitable when you have limited time. That’s when you should use product attribute level bidding.
Here’s how you can segment your inventory based on product attributes:
Many customers don’t purchase the first time they click on your ad. Instead, they look around, compare products, prices, and value propositions. This is where Remarketing Lists for Search Ads (RLSA) bidding enters the scene, as you can use Google Shopping campaigns to remarket to previous visitors.
You can use it to target your past visitors or consumers when they search for products again. However, your visitors and previous customers are two different segments, so you should target them differently. For example:
With RLSA campaigns, you place higher bids within your campaigns to different audiences. This ensures you have a better chance of driving traffic from potential customers. For instance, you may be willing to bid higher to draw in visitors who abandoned your cart versus those who just visited your site.
Manual bidding involves managing your bids right from Google Ads. This means you can increase or decrease your bid based on several factors like product performance or ad position.
Automated bidding gives control to an algorithm to selectively choose the most optimal bids. There’s an option to adjust targets within bidding folders -by campaign or by ad group.
Overall, automated bidding is a temporary solution that gives mixed results. You may opt for it if you’re running a smaller account with limited campaigns. However, manual bidding is the best long-term solution for most business accounts. It all depends on your needs/goals.
Here are six proven tips for building an effective Google Shopping bid strategy:
Lack of segmentation can negatively impact your Google Shopping campaign. Overlooking the intent of different segments when searching for different products means you’ll end up showing irrelevant products. So, understand what your customers are seeking when they look for your products. This will help make your bid strategy cost-effective.
When you place bids for certain categories and rarely revisit them, you can end up wasting ad spend. So, set a rule that lets you know when money is being wasted so that you can reallocate it elsewhere.
Specify rules when you should increase your bids. This includes segmenting your converters by three descriptors:
Some of your products may not have received any impressions over the past month. Instead of reallocating all your money elsewhere, assess the competition in that item’s field.
Whenever you run a promotion, it is absolutely essential that you also increase your bids on the products you’re promoting. Even though the sale means your profit margins will drop, you’ll see a lower overall Google Ads ROI if you’re not increasing your bids and, thus, increasing exposure and sales.
Increasing your bids by a small percentage can result in significant increases in revenue and profit. So, continually test bids to find the best balance. Break down your campaigns on a weekly and hourly basis to see how much your conversion rates change by both of these metrics.
You need to apply the right bid modifiers to spend more on the traffic that converts the most. Also, consider using geo-targeting bid modifiers to invest more in clicks from areas that perform the best.
By implementing these tips, you should see a significant increase in your Google Shopping campaigns’ performance in terms of conversion rate, revenue, and profit.
With an effective Google Shopping campaign bid strategy in your arsenal, you can enjoy an unmatched competitive edge by taking full advantage of one of the most cost-effective forms of advertising available across your company’s entire product line.
How much did you enjoy this article?
We will help your ad reach the right person, at the right time
Actionable insights discovered for you. Now you can do more in less time.
PPCexpo Keyword Planner will help you align your keywords with the customers’ intent.
Frequent audits will help you optimize your PPC campaign for success.
Visualizations give you the ability to instantly grasp the insights hidden in your numbers.
Experience the new revolution in reporting … click your way to insights, don’t scroll.
Calculate the number of combinations in your PPC campaign. It may surprise you.
Related articles
Discover easy ways of auditing your Google Maps Ads. You also get to see tools that'll help you audit your Google Ads campaign.
This guide shows you the best way to advertise your business. It also reveals tools to help you monitor your PPC campaign.
This guide shows you what you need to know about paid digital marketing. You also get to discover tools used for measuring your campaign.
