Digital Marketing Blog

Are Your Top Spenders Your Top Sellers?

by | Jul 29, 2020

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Google Ads and Microsoft Advertising Shopping campaigns are essential additions to a well-rounded paid search strategy for ecommerce companies. Clicks on shopping ads tend to be less expensive than the search terms for the same account, and the volume is impressive. 

However, from an optimization standpoint, there are only two things you can really do to improve Shopping campaigns: add negatives and bid to the SKU level. 

For this blog, I’m not talking about the Smart Shopping campaigns that I wrote about in Nov 2019. These types of campaigns are a black box using full automation for management, and allow you to neither see the keywords you are showing on nor negative them (unless you have a Google rep and know what keywords to exclude without the data). They also do not allow you to bid differently per SKU which is very important when trying to figure out if your top spenders are your top sellers. 

We inherit a lot of accounts – either from other agencies or ones that have been managed in-house – that include Shopping campaigns not bidding to the SKU level, and that is a big issue.

When accounts come to us in this condition, we often see instances where Google will funnel massive amounts of traffic to one particular item. This is great if the item is selling and is hitting return on advertising spend (ROAS) goals. If this is the case, capitalize on that. But what if your top spenders are not your top sellers and you are wasting money on clicks with few sales?

If you only have one ad group with all items, without breaking them out to the SKU level, you won’t know the answer to this question. You also won’t have the data necessary to increase your position for keywords that are working or decrease it for keywords that are not.

If your online stores sell items that have a wide range of prices and aren’t all the same, you need to be able to optimize your bidding for that. Having one bid for all SKUs doesn’t allow for differences in price or ROAS.

Campaign structure is an important piece of this puzzle. Having one ad group with all SKUs works great if you only have a few items and they are all similar to each other, but it doesn’t work well if you have a lot of items, or if those items are different from each other.

To build out Shopping campaigns effectively, split your campaigns by categories found on your website. Using website structure for ad campaign building is a great way to stay organized. For example, if you sell clothes, split your campaigns by Tops, Bottoms, Outerwear, etc. Then within each campaign, split up by sub-category.  For our clothing example above, in the Tops campaign, create ad groups for Tees, Tanks, Hoodies, Blouses, Sweaters, etc.

Check out this example for a client that came to us with one ad group and one bid, with over 40,000 SKUs. 

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Some products were not converting, and some were converting at an excellent ROAS. The single bid and the one ad group for everything lumped together were seriously constraining this client’s ability to optimize and report.

For this particular client, we created a Shopping campaign for each make of vehicle. Within these campaigns, we created an ad group for each of the different models of cars. Each model ad group is further divided by SKU, so we can take advantage of ones that do well and bid down on those that don’t. 

This structuring of the campaign also allowed us to better allocate budget to specific campaigns. Additionally, it helped to provide better reporting for the client, so they can more easily monitor specific SKUs for competitive pricing issues.

If you are not structuring your Shopping campaigns properly, you could be wasting your money. It can’t hurt to take a look at what you are doing and see if you can do it better. You have nothing to lose, and only sales to gain.

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