Google has incentivized their AdWords sales team so they get bonus based on customer adoption of automation. Smart Shopping is being pushed hard at all levels by Google’s in-house team and the Google sales contractors. There is a use case for it, but it’s not for everyone. It tends to benefit Google more than the clients.
When Smart Shopping is the right choice for ecommerce
- If you are a steady to low volume / discount reseller that often wins on product price and has limited resources for AdWords.
Smart shopping can be a quick way to get started with both shopping and remarketing campaigns. A price advantage makes Google shopping much easier to run. The automation templates for remarketing can get cheap impressions in a fairly balanced manner.
When Smart Shopping is the wrong choice
- If you are building a brand – Smart shopping is a terrible choice. Automated templates take away all control of presentation. You’ll have no idea how your brand looks or where it’s placed in the remarketing ads.
- If you have competition on price. – Smart shopping has no tactics that you can use to differentiate from your competition. A lower priced product, even by a few pennies, can drive you completely out of the ad auction.
- If you care about segmenting your customers. Smart shopping treats everything the same. You won’t be able to tell how much of your sales are coming from remarketing and how much from shopping or what keywords have the most impact.
- If you care about segmenting your products. All products get the same bid. If you have too much inventory of a product and you’d like to support that with extra ad spend you’re out of luck. If a competitor is pushing a particular product harder than you are, you can’t boost it.
- If you care about customers confusing your products with something irrelevant and wasting clicks. This happens all the time in ecommerce. It can be as simple as a customer thinking the accessory priced at $50 is the barbecue grill priced at $500. With smart shopping you can’t use negative keywords to cut out that waste.
Bottom line – Google Smart Shopping simply won’t scale and doesn’t allow any flexibility to adapt to real-world market conditions that all brands experience.
3 Truly Smart Advanced Google Shopping tactics
If you want to build a brand and take advantage of the ability of Google shopping to scale you’re going to want to deploy one or all of the following:
- Manual bids with audience based modifiers – Simple and very effective.
- Inventory based bidding – Bids are targeted based on inventory margin, competitive signals, and inventory levels down to specific sizes.
- Keyword targeting / Query funnels – using priority levels and negative keyword lists bids are segmented by brand, non-brand, and product names.
Manual Bids With Audience Bid Modifiers
This is the simplest tactic but I’ve seen it work well in $10 million dollar ad spend programs. In Google Shopping Google’s algorithm determines what keywords a product shows for. If you up the bid it will begin to show for keywords that are less and less relevant.
For example, if you’re selling $5000 barbecue patio sets you certainly don’t want to show for every generic keyword search associated with barbecue. You don’t want to spend impressions or clicks on the folks that will end up buying something for $50 from Walmart. The exception to this are the people that are highly likely to become your customers.
If your product has a base bid of $1 and a bid modifier for audiences you think are very likely to purchase from you of 400% then your product will show for generic searches to that audience since it will be at a high enough bid threshold but will only show for a narrower set of keywords for people that aren’t in your lists.
This, with negative keyword lists to filter out irrelevant searches, can scale indefinitely. Website behavior audiences can be imported from Google Analytics. You can import CRM lists. Google has options for demographic targeting, people that are in market for your products, or people that have an affinity for your products.
Inventory Based Bidding
This tactic is more complex because it can involve more internal data, some external tools, and the use of labels.
If Click Through Rate is high and the Conversion Rate is low, it’s probably an inventory stock issue. If CTR is low, it’s probably a price issue.Iron Pulley Analysts first diagnostic rule for shopping
To utilize inventory based bidding requires you to align inventory data such as margin or stock levels to your product catalog. A good external tool such as Feedonomics can allow you to create rules that will make labels associated with margin or stock.
Let’s say you have high, medium, and low margin products. If your primary goal is to maximize ROI you could segment these products into 3 different campaigns and set a target return on ad spend bidding strategy with a different goal for each group.
Similarly, if you know that when you’re out of a popular size of a product often times the conversion rate will drop steeply. You can segment your products into inventory categories that make sense; Full, Most, Some and adjust bids accordingly to reduce wasted spend. The product Woop developed a platform to automate this process. The same sort of thing can be done on a manual basis using segmentation.
The most overlooked, but most important factor in shopping campaigns is product price. Lower prices have a big advantage. So much so that cost per click is greatly reduced if a lower price is presented. You can test this in your industry to see if it results in better ROI to give the money to Google for higher CPCs or to your customer. Every company should have a strategy in place to react to competitive price changes.
Keyword Targeting / Query Filtering
This method was first published by Martin Roettgerding in December of 2014 and has since become the standard for companies with a large brand footprint. It is somewhat complex and it doesn’t play very nice with the other two advanced methods but it does allow brands to dominate certain brand or category level terms. It relies on campaign priorities and negative keyword lists.
There are companies out there such as Crealytics which can automate some of these processes, but in most cases automation of this process limits the ability to do real time positioning of the brand.
The magic of keyword targeting in Google Shopping is the ability to dominate a category term and create instant authority in the mind of the customer. It’s a powerful branding strategy.
Reach out to email@example.com to have a conversation about which of these strategies is best for your ecommerce site.