Despite them appearing in the same results page, Google Shopping, and traditional text ads are actually very different. And if you’re treating them with the same strategy, you’re likely wasting a lot of your ad spend without seeing any returns.
In this post, we’ll explain how these differences work, what adjustments you need to make, and how to tailor your campaigns to take advantage of the breadth of Google Shopping’s advertising tools.
Products not Keywords
In traditional search marketing, you obviously bid on keywords. Keyword level bids allow you to determine the user intent behind the query and show an appropriate text ad which matches that intent. So for example, if someone searched for “casual shoe styles”, you could surface an ad about how you have a great selection of shoes available in all different categories.
With Google Shopping, all bids are made at the product partition level and Google decides which products from your feed will show on the results page based on the search query. That means, there is no such thing as a generic ad. No matter what the user searches for, Google Shopping is going to display a product.
Bidding at the product level removes your ability to match consumer intent to various responses, reducing ad flexibility. As a result, advertising budget is regularly spent when the conversion likelihood is low.
To counteract this problem, you need to adjust your bidding procedure to take into account the specificity of the user’s query. If the user searches for a particular product name, it indicates that they know what they want and are close to a purchasing decision – you want to bid highly for that user. If on the other hand, they are simply searching for a category (women’s clothing) or type of product (shoes), you probably don’t want to bid as highly since you cannot be sure that the product Google chooses to show them will be relevant.
Therefore, in addition to choosing the keywords you do want your product surfaced for, you also need to set up a series of negative matches to those same keywords in other AdGroups. Using this system, you can effectively force Google into picking the right response (showing the right product) based on user intent.
This dual keyword bidding structure will need to be set up for each product in your Google Shopping feed since you are placing bids per product instead of per keyword.
Tip: Create tiered negative matches to ensure the product Google surfaces fits consumer intent
Product bidding has diminishing returns
In traditional keyword bidding, there is a curve of diminishing marginal revenues. That means you can continue to add keywords to your campaign and increase your bids on those keywords, and still see incremental gains in performance and volume. The downside, of course, is that your Cost Per Acquisition (CPA) will start to increase, but the theory still holds.
Product level bidding works very differently to keyword bidding. Instead of the typical gradual growth curve, shopping bids perform along an ‘S-curve’. This ‘S curve’ means there is a minimum bid in order to be effective in the auction, followed by a point where traffic accelerates quickly for small bid increases. However, at some point in this curve, the value of that process plateaus, and incremental gains become harder to achieve. Companies that ignore the S-curve wind up spending money on an ad without seeing any additional Return on Advertising Spend (ROAS) – just an increase in impressions on increasingly generic terms.
Tip: Google shopping campaigns require constant maintenance to recognize when your bids are approaching the top of the ‘S curve.’
Goodbye Keyword Auction
In Google Shopping, just like in traditional AdWords, the closer you can get your product titles to align with the user’s search query, the better your returns. In fact, our testing has shown that Product Titles which map closer to real search terms, in many cases, will more than double your Click Through Rate (CTR).
But, bidding in Google Shopping presents a unique challenge: There is no keyword auction. Google’s algorithm is deciding which product to show the user. Whether your product will be shown highly (or at all), largely depends on how relevant Google determines the search query is to your product title. Hence, if product titles reflect actual user searching habits, your product is more likely to be shown.
Tip: Since each product has it’s own listing (including each size you sell), you should vary your Product Titles for the same item to align them with the most relevant and profitable search queries
When measuring the success of your traditional AdWords campaigns, you can track whether a user clicking on your ad led to a sale. In Google Shopping, Google will only show a conversion success if the user purchases the product that they clicked on.
Google is great at telling you if a click on a particular product led to a direct conversion. But what happens if the user decides to buy something different than their initial search query? And what happens when a user comes back time and again to buy different products from your site?
Knowing the value of that user across all your marketing efforts is key to understanding the impact of your Google Shopping campaigns. After all, only 34% of conversions match the product that was initially clicked on. Which means that Google might not be measuring the true success of your campaigns.
Tip: Start using a Unified Lifetime Value (LTV) calculation to determine the effectiveness of your search marketing efforts.
Recommended Reading: Why Lifetime ROI is the only metric that (really) matters in search marketing
Get some outside help
If all that is starting to sound like a lot of work, well, you’re right. To get the most out of your Google Shopping campaigns you need to be constantly monitoring and tweaking each and every campaign. Which, in real terms, means each and every product.
Google Shopping campaigns require their own unique management that sits outside traditional AdWords. From campaign architecture, to match types, to S-curve bidding, to LTV calculations, the level of complexity that comes with managing Paid Search campaigns is only increasing.
Whether you choose to employ an outside agency to help you manage your Google Shopping or invest in some internal tooling, it’s clear that you’re going to need something to help you keep up.
Recommended reading: Outsourced vs. In-House – Which is the Better Model for Managing PPC Campaigns?
When it’s done well, Google Shopping is a leading revenue driver and a key element for future growth in the retail industry. Managing Paid Search and Shopping Campaigns may be a full-time job, but it’s certainly worth the investment.