(Don’t miss the free download located near the bottom of this post!)
Most retailers are not profitable advertising with Google. Those advertisers that are unable to generate a profit using Google ads often will say things like Google is too expensive or too over saturated. However, the truth is that those advertisers are not getting results using Google because they either lack the time, the knowledge or both to properly optimize their campaigns.
For those advertisers with the proper tools and the ability to use them, advertising on Google and specifically Google Shopping for ecommerce retailers can be one of the most profitable marketing channels available. A marketing channel that delivers sales 24/7, 365 days a year.
I have been running paid ads using Google AdWords for almost two decades and running Google Shopping ads since even before the inception of paid Google Shopping in 2012. During this time, I have managed hundreds of thousands of dollars in ad spend for my private clients.
Pulling on this experience, what I discovered is that one of the most effective ways to optimize a Google account on an ongoing basis is to let historical data be your guide. Quite simply this means increasing bids on items that are converting and decreasing bids when items are not.
I’m a big believer in the 80/20 rule as it applied to your Google Shopping ads. I see it true time and time again when I review a retailer’s Google Shopping account. The 80/20 rule used with respect to Google Shopping dictates that 20% of products will generate 80% of conversions.
Although, this the 80/20 rule is common in most AdWords accounts that I review, unfortunately for many advertisers what is also typical is having near similar bids across all products in an account or in multiple campaigns.
I want to show you a better way to quickly and effectively optimize your Google Shopping campaigns.
In order to be able to effectively optimize Google Shopping campaigns based on historical data, an account first must be segment products into manageable sized and separate campaigns.
Running a single campaign with ‘all products’ is not going to allow an advertiser to optimize their bids for best-selling items and worse than that will typically waste a ton of money in ad spend.
Having a single campaign with ‘all products’ is the default of launching a Google Shopping campaign and sadly some advertisers never get past this point.
No wonder that most retailers are not profitable using Google:>
If this is your situation and you haven’t segmented your Google Shopping campaigns. Don’t despair, but please motivate yourself to act and start segmenting.
I have an entire article dedicated to segmenting Google Shopping – How Segmenting Google Shopping Campaigns Can Boost Profitability
Once an account is properly segmented into related campaigns it will become much easier to run my propriety profitability report along with having the ability to easily optimize your bidding for device, location, time or day of the week.
All these optimizations are helpful for getting the most results and the lowest cost-per-acquisition; however, the most effective way to optimize your campaign relatively quickly is by using my proprietary Profitability Report.
The Google Shopping Profitability Report
For Google Search ads, retailers can set automated rules that increase or decrease bids based on conversions or lack of conversions. However, automated rules are not available for Google Shopping ads.
By using my Profitability Report system, advertisers can naturally raise bids on products that convert, while lowering bids for items that are not converting.
In order to effectively run the Profitability Report, you are first going to need to be familiar with how to run reports inside the Google AdWords interface as well as some advertising formulas such as ROAS (rate on ad spend).
If you are not familiar with these terms, don’t worry they are all detailed in my free download – Google Shopping Profitability Report.
Is the Profitability Report Right For You?
Here us a list of advertisers that could substantially increase their sales with the use of my proprietary Profitability Report within Google Shopping.
Advertisers with over 20 products in Google Shopping who:
- Do not have their Google Shopping product ads currently segmented into different campaigns.
- Do not know what items are driving sales within their Google Shopping campaigns.
- Those that are not currently bidding higher for best-selling or bidding lower for items with low conversion rates.
- Those that are not adjusting these bids monthly.
- Those who do not have a system for monitoring their best-selling and least-selling products.
Profitability Report Download
Download a free PDF that details the complete steps as well as a color-coded system of how I format the Google report using excel after you download which allows applying the Profitability Report a breeze.
Last bit of advice
Those that say that Google is over saturated or too expensive to effectively use Google Ads as a highly profitable marketing channel typically do not have a system in place to optimize their Google advertising.
In Google Shopping, what is most likely occurring is that they are bidding too high on products that do not convert and not high enough on products that do have a high probability of leading to a sale.
Now, you also need to look at your website. If you are selling products from a website that to be relatively nice looks like crap and doesn’t convey confidence in the shopping process, it still may be difficult to convert.
Google Shopping ads should produce higher conversion rates than what organic traffic produces. But, if your organic traffic has a conversion rate of under 1% for example, there are other factors such as having a poor website, pricing pressures, or a variety of other reasons that may account for the issue.
In this case, even if you produce a Shopping conversion rates double to let’s say 1.5%, it may be difficult to show a substantial profit using Google ads.
However, for an average website selling products where there is a market to buy them Google Shopping Ads, when done right, can provide you with a consistent and highly profitable marketing stream.
Looking for More Information on Google Advertising?
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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.