May 14, 2019
The Ultimate Guide to Google Ads Smart Bidding
In October 2012, Google Shopping became Product Listing Ads (PLAs), a paid advertising format. Since this transition, PLAs have become increasingly more important in driving revenue for B2C advertisers.
According to Kenshoo’s 2012 Global Online Retail Report, the visually appealing PLAs draw about one and a half times the clickthrough rate of regular text ads, and convert 23% better, resulting in a 31% higher return on advertising spending (ROAS). Currently, CPCs are less competitive in comparison to search CPCs for most industries.
Taking advantage of PLAs is a no brainer but managing them can be tricky. We often take on accounts which contain one ad group targeting all items in the data feed with no negatives. That’s like bidding on one keyword in broad match and just letting the account run. Not a good idea! This set up allows for little control and limited optimization opportunities.
So how do we take control? The first step involves analyzing the data feed to identify groupings of related products which will serve as ad groups within the PLA campaign. A few definitions for clarification:
1. Google Merchant Center Data Feed: A file consisting of a list of categorized products.
2. Product Targets: Instead of keywords, PLAs use product targets to determine which items from you data feed appears on the Google search results page. They allow you to bid differently on different sets of products.
3. Attributes: Product Targets are defined by attributes. Attributes such as your items’ brand or category, define your item in a unique way.
Are you a reseller with inventory from numerous brands? We can use the brand attribute to target products by brand. Do you sell clothing online? We can use the product category attribute to target by category of clothes (jeans, tops, skirts, etc.). There are infinite options and each targeting strategy will depend on our client’s type of business and data feed setup. The end result is multiple ad groups which each contain a specific product target or a select grouping of product targets.
Why segment? Our main tool to drive results is adjusting bids on the product targets. Just like in search where keywords perform differently, product targets will perform differently. When we target all product targets with one bid, we can’t increase or decrease bids depending on individual performance of products. By segmenting by product targets, we can use the ROI per ad group to decide whether to increase or decrease bids.
Let’s look at a simple example: a reseller sells 2 brands, A and B. Brand A drives twice the amount of revenue than Brand B. If we use the default all product targets strategy, we have to set the same bid for both brands. By segmenting the brands into two ad groups, we can place a higher bid on brand A and a lower bid on brand B, increasing overall ROI and driving more revenue.
We also utilize more advanced features using AdWords labels, but I’ll save those tips for another blog post!