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Google Shopping Ads

Google Shopping Ads

June 22, 2020

Google Shopping Ads is a Google marketing platform (also referred to by Google as destinations) that you’ll be familiar with from their increasing appearance at the top of search engine results pages (SERPs).

In certain respects, Shopping Ads share some common features with its Google cousin, the venerable text ad.

 

Like text ads:

  • Google Shopping Ads are based on a PPC (pay-per-click) fee, so as a participating merchant you’ll be charged for each user that clicks from the ad to your website.
  • Your Shopping Ads campaigns are set up and managed through Google Ads (the new name for what some of us still think of as AdWords). It’s understandable that it was renamed, once it evolved to being also used for non-text ad campaigns, like Shopping Ads and display ads. But don’t confuse Google Ads with Google Shopping Ads (which are the ones you’ll see immediately below), as these are two distinct products.

And don’t confuse Google Shopping Ads with the look-a-like Google Shopping Actions ads below. Actions ads display a product image, title, price, your brand name. But they also include a blue shopping cart icon in the top right corner of the ad, signifying that these products can be bought without leaving Google Shopping.

 

Unlike Actions ads:

  • Shopping Ads display your products at the top of the search results page above the paid and organic text ads. Shopping Ads are also displayed on Google Shopping. Actions ads, however, appear only in Google Shopping (click on Buy on Google on the Shopping side bar and only Actions ads will be displayed).
  • Shopping Ads when clicked take the user to your store’s website where the purchase transaction can take place, unlike Shopping Actions ads where purchases take place in Google Shopping through its universal shopping cart and Quick checkout.
  • Shopping Ads require that you set up and manage ad campaigns, unlike Actions where Google manages the display of your Actions products without any involvement from you,

There are other differences, of course, but these are some of the more significant ones. For a deeper look into a comparison of Google’s advertising programs, check out What Google Platforms Should You Use?

 

What’s to Like about Shopping Ads?

Google Shopping Ads target potential purchasers who are searching for products like yours. Because of the vast amount of data Google has available on users’ search and buying habits, they are able to promote a product to those most likely to purchase that product.

When one of these users clicks through to your product detail page from a Shopping Ad for an item seen in a search result, you have a qualified prospect on your site in purchasing mode. Your job is to engage the user, convert to a subscriber or purchaser, present like products or upsells, and turn that buyer into a repeat customer by promoting your products through ongoing email newsletters and retargeting ads.

Shopping Ads are ideally suited to targeting consumers at the top of the purchasing funnel, people who are doing research on a certain product or are uncertain where the product is available.

Building a Shopping Ads Campaign

First, use AdAmplify’s Shopping app to upload your products to the Google Merchant Center (GMC). The GMC is an online repository for your Shopify products that Google will use to build your Shopping Ads. If you don’t have a GMC account, you will first need to create one, a simple process for Shopping Ads and Surfaces across Google (a bit more complex when it comes to Shopping Actions).

Google has certain requirements; AdAmplify’s app automates much of the setup automatically. But some of their product attributes/options will not be available in your store because of differences between what Shopify provides and what Google expects. We provide you the tools to quickly and easily add these unsupported required attributes so your products are not rejected by Google or don’t qualify for Google’s enhanced listings.

Once your products are loaded into the GMC, you can set up your Google Ads account and link it to your GMC. Now you are ready to set up your first campaign.

You’ll have four decisions to make in setting up your campaign:

  1. Your Daily Budget –  what you want to spend each day (there is a minimum of $5 per day but realistically to generate the traffic initially needed be prepared to spend more, say $10-50 per day to give Google a better chance of learning the characteristics of your typical customer.
  2. Your Default Maximum CPC (Cost-per-click) –  what you’re prepared to pay for each click to your site. Google provides tools that will give you some direction on current bid ranges.You’re bidding against others in an auction, so your maximum CPC is not necessarily what you will pay for a click. Google bids the lowest amount necessary to make you the winning bidder, up to your maximum CPC in competitive situations.
  3. Negative Keywords – unlike Google’s text ads, for Shopping Ads you cannot set up keywords in Google Ads (those phrases that users will search on when looking for your types of products) to target your ads. You may, however, set up negative keywords to eliminate words or phrases that are too general and will cause unproductive clicks you’ll be charged for. To target your Shopping Ads, Google uses your title, description and product category to determine the audience each of your products is best targeted.
  4. Your Campaign Goal – if you’re just starting out, you will set up your bid strategy to maximize either clicks or conversions. Conversions can be measured by the dollar value of purchases and/or the actions of users, such as subscribing to your site’s newsletter. For e-commerce vendors we recommend selecting maximize conversions, so you can begin to build the conversion history thresholds required to qualify for switching your campaign to target ROAS (return on ad spend) bidding.To meet Google’s required conversion thresholds you need a minimum of 20 conversions in the past 45 days, and ideally a minimum of 50 conversions in the last 30 days. This gives Google’s machine learning algorithms the data it needs to maximize results by making better informed bidding decisions.

At this point, you may change your bid strategy to maximize a targeted ROAS. Now you can set the return you would like to see for each ad dollar spent, for example $4 for every dollar spent, or an ROAS of 400%.

A Quick Look at Return on Ad Spend

Google uses your target ROAS settings and their own algorithms to meet or beat the goal you set. After you reach the conversion milestone, it has enough understanding of your best purchasers to selectively target the higher conversion prospects and deliver on your targeted ROAS. Some of our clients have seen an ROAS of 1,000%, even though the targeted ROAS was set lower.

In setting the ROAS, you may wish to break your items into product groups based, for instance, on their product category (allowing you to be more specific with your negative keywords). As well, based on your product’s margins, you could decide to divide higher profit items into a lower ROAS campaign than your lower margin ones where you’ll want a higher ROAS. You could also choose to set a higher maximum CPC price and/or a higher budget for the campaigns with the higher margin items.

The other factor to consider when designing your campaigns is how often a purchaser typically purchases after the first purchase. Do you want to “subsidize” that first purchase in some way if the Lifetime Value (LTV) of the purchaser is high, and you have the means in place to target previous purchasers with reminders or incentives to purchase again. If so, go with a lower ROAS, even one under 100% depending on your goals.

Over time as more and more data is gathered and you hit Google’s required milestones for conversions (e.g., a minimum of 20 conversions in the past 45 days), you can change your bid strategy to maximize “return on ad spend” (ROAS). This allows you to set the return you would like to see for each ad dollar spent, for example $4 for every dollar spent, or an ROAS of 400%.

For more information on target ROAS bidding, click here.

If you would like help with your Shopping Ads campaign bidding strategies, defining your conversion actions,  and setting up your conversion tags in Google Analytics, contact us.

Other Considerations When Setting Up Your Campaigns

The competitive landscape for your products is also a factor. More competition for the same product means you have to be priced competitively.

Shipping charges are also a significant factor, especially when competition is high. In today’s environment this could be the deciding factor for a purchaser. Look at how your competitors are handling shipping charges and where their thresholds are for free shipping. Making that threshold reasonable in relationship to the average cost of your products will encourage consumers to purchase a second item so they qualify for free shipping.

Summary

AdAmplify has run hundreds of campaigns. We’ve found that after the initial period of maximizing conversions, moving the campaign to run against a ROAS goal can generate a very solid positive return, exceeding 400% for many items.

Results though are dependent on factors such as your product mix, your budget (too low a budget gives Google limited flexibility to maximize results), and your campaign structure

Optimizing your campaigns to generate solid results is a continual exercise. You need time to build a track record that Google can use to implement the best strategy for your products. Our experience is that early sales months were “lumpy”, slow periods followed by strong ones, until our typical buyers were well understood.

In our experience, Shopping Ads is one of your best advertising channels to reach relevant users who have a high probability of buying as they start their journey towards a potential purchase.

If you are new to setting up an ad campaign for Google Shopping Ads, we can help.

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