Assuming you have already segmented your Google Shopping Campaigns, how do you optimize individual product bids for Google Shopping?
If you have enough historical data to be relevant in your decisions, Google provides several competitive metrics advertisers can use when deciding whether to raise or lower bids for individual products appearing in Google Shopping. These competitive metrics include: Benchmark CTR, Benchmark Max. CTR, Search Impr. Share, Search Lost IS (rank) and Click share.
In order to enable various competitive metrics to display in the standard AdWords view, pull down the Columns tab and select Modify columns…
Benchmark CTR – How others advertisers’ product listing ads are performing based on similar products (available for the product groups level) .
Benchmark Max CTR – The maximum cost-per-click that other advertisers are bidding for similar products (available for the product groups level) .
Search Imp Share – The impressions your products have received divided by the estimate number of impressions your products were eligible to receive (available for both the product group and the individual item level).
Search Lost IS (rank) –The percentage of impressions your ads did not receive due to poor Ad Rank or insufficient bidding (available for both the product group and the individual item level).
Click Share – The clicks you received on Google’s Search Network divided by the maximum number of clicks that you could have received (available for both the product group and the individual item level).
For optimizing an individual product bid, I prefer to look at the Search Impr. Share in conjunction with Cost, Avg. CPC and Conversions.
Below are some examples of how I use these metrics to determine when to raise, lower or keep current Shopping bids for individual products:
When to Raise a Product Bid
When there is sufficient historical data, Google will add a small graph icon next to an individual product’s Max. CPC column that when accessed will display how many impressions and clicks and advertiser can expect to receive by adjusting their bid for a product. When optimizing products in Google Shopping, I tend to look at optimizing products with conversions that have a relatively low Avg. CPC where the Search Impr. share is below 30%.
The image below shows one of the Shopping Campaigns that I’m currently managing. The top product ‘faxmabxrsht’ has 2 conversions in the last week with an average CPC of $0.08 and a Search impression share of 28.33%. This historical data makes this product an excellent candidate to investigate whether raising the product bid is viable.
By clicking on the small graph icon, Google opens a Bid Simulator window that shows what clicks, costs and impressions this item can expect if the bid is changed to one of the bid options listed. This is where experience comes into play. I typically will raise the bid to a level that makes sense based on past experience managing similar products within the Campaign. Here, by raising the bid from $0.10 to $0.33 this product can expect to receive almost three times as many impressions and over four times as many clicks.
Quick note, raising bids is a great way to bring more traffic to a product that has historically done well in terms of conversions, but it will also increase spend. It is recommend to continually monitor changes (especially when raising bids) to maintain profitability.
When to Lower a Product Bid
Conversely, sometimes it is necessary to lower a specific product bid that is receiving clicks, but zero or few conversions.
Below, is an item ‘girlsgonewine’, where the bid is at $0.54, the search impression share is 42.70% and the average CPC is $0.34. This product has received 49 clicks and incurred a cost of $16.52 over the last two weeks with 0 conversions.
After checking to ensure all colors/sizes of this t-shirt are in stock (ensuring that there is no issue with the product), I decide to lower the bid. By again clicking on the small graph icon located next to the Max. CPC field, I can view Google recommendations of how many clicks, impressions and costs I can expect the item to incur after lowering the bid.
In this instance, I am going to lower the bid from $0.54 to $0.21. This will continue to allow this product to receive some clicks and impressions; however, the product will be shown less often. I will continue to monitor and review the bid once additional historical data is available based on the new bid.
When to Not Adjust a Product Bid
For advertisers, perhaps just as important as raising and lowering individual bids is determing when to NOT adjust a bid for a particular product.
Below, the product ‘sbpwtlyth’ has a bid of $0.35, with one conversion and a Search Impr. share of under 30%.
This product has all the criteria I use to decide whether or not to raise a bid and therefore I would like to view how many additional impressions, clicks and costs Google expects this product to receive if the bid is raised. Therefore, again I click on the graph icon next to the Max. CPC field.
For this item, even if I more than doubled the bid from the current $0.35 to $0.81 it would barely double the impressions. In fact, I would need to raise this bid by more than three times to $1.06 to receive three times the impressions. Also, keep in mind that this is raising the Max CPC. When looking at historical data, I realize that this product has been actually incurring an average CPC of $0.28 per click. With this information available, I decide that raising the bid is not a good value and that it does NOT make sense to raise the bid and will leave the bid at $0.35.
Adjusting bids for individual products is a labor intensive process. However, it also can be a rewarding process in gaining the highest return on advertising dollars. In addition, there are other factors to consider before raising or lowering a product bid such as: is the product in stock, is the product a seasonal seller and are there other factors that can account for increase/decrease sales such as a competitor discounting.
By taking advantage of Google’s competitive metrics, advertisers can optimize their Shopping Campaigns at the product level. Quick warning, for this strategy to be the most effective, advertisers should ensure they have previously segmented their Shopping Campaigns. For a review on segmenting, refer to my blog post How Segmenting Google Shopping Campaigns Can Boost Profitability.
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ABOUT THE AUTHOR:
Andy Splichal is an online marketing strategist with more than a decade and a half of experience helping companies increase their online presence and profitable revenues. Although this blog focuses on driving profitable traffic through Google AdWords, True Online Presence offers additional services for lead generation as well as other proven marketing strategies customized for each client.