No retail business ever wants to pay more for advertising than is necessary. Additional costs and fees can quickly add up and reduce profit margins by a large amount. That’s an important concern whether you’re just starting your first Google Shopping campaign or already managing a large ad inventory. So why are brands still overpaying for clicks?
There are several key areas which can increase costs for your business and hurt your return on investment. By keeping these in mind when you’re setting up a Google Shopping campaign or choosing a CSS partner, you can ensure your advertising is optimised from the start. And by auditing your existing campaigns on a regular basis you can avoid small problems from becoming a bigger issue.
To help you to structure your planning and audits, the various factors have been collected into groups to help you assess each area of your business and campaign in turn.
Your business strategy and website
Google Shopping is an incredibly effective way to attract large volumes of new customers to your business. But there are limits to what it can do if your products are twice as expensive as competitors, or your eCommerce website doesn’t work reliably to let everyone complete their purchases.
There are multiple reasons to constantly check and improve the quality of your offering. Improving the conversion rate on your website allows you to increase your bidding amounts, or offer an increased commission if you work with CSS partners on a Cost Per Action (CPA) basis.
You also need to decide if there are products which simply aren’t economical to promote, or if availability could become an issue. A popular way to keep track of profitability is to measure your Return On Ad Spend (ROAS) by dividing your revenue by the costs of advertising and fulfilment to check that you’re making enough margin.
Website issues will often become apparent when you go through a typical customer journey in comparison with leading rivals in the same industry, or conduct some user testing. If you’re working with an experienced Premium CSS provider, they’ll be able to highlight potential issues based on their familiarity with a large number of similar eCommerce businesses.
For example, the RedBrain team has worked with more than 35,000 retailers worldwide, and our own price comparison site serves millions of visitors every month. So there’s a high level of understanding when it comes to attracting customers at scale, and fulfilling their needs.
If you want to work with a CSS partner, then it’s important to consider how you plan to collaborate. Many CSS providers, including Google Shopping EU, will bill on a Cost-Per-Click basis, with an additional percentage or set monthly amount as their fee for the work. For example, Google Shopping EU adds 20% onto your advertising spend before bids are placed.
A smaller number of premium CSS partners, including RedBrain, will operate on a CPA basis, which means you are only paying for their work when it has delivered a sale.
Google Shopping Set-Up
The two key elements of Google Shopping are optimising the product data being used, and the campaign structure which organises it. Although Shopping ads are triggered by a user searching for a particular product or related phrase, this isn’t something you can target in the same way as paid search advertising. The only control is to add negative keywords for campaigns.
Product Data fees for Google Merchant Centre
Your product data will be handled by Google Merchant Centre, which can be set up by your business, or a CSS partner.
Improving your product data feed can potentially lower the cost of advertising, and increase customer purchases, so it’s important to spend time looking at the following areas:
- Product Descriptions
- Stock Availability
- Product Type and Categorisation
This is obviously time-consuming and hard to manage at scale. That’s why the RedBrain Shopping Service, for example, uses a combination of machine learning and artificial intelligence, overseen by experts, to optimise the product data feeds of clients. And this catalogue now contains more than 2 billion products.
Experience with Google Shopping is particularly useful in checking the correct product type and categorisation. It might seem logical to target a very broad category to potentially show for many more searches, but this will typically mean you’re overpaying for irrelevant clicks and web traffic rather than interested customers.
With the Google product taxonomy supporting around 6,000 product categories (the full list is available, here), this decision alone could take significant time for a large product inventory. But rushing through the choices can have a big impact on product visibility and bidding costs, meaning overpayment for clicks by people who aren’t going to purchase.
And by looking at the incremental gains RedBrain delivers for clients, with around £1 billion in annual product sales, we have plenty of examples demonstrating how much difference an optimised product feed can make.
Campaign set-up for Google Ads
Google Ads (formerly Adwords) provides campaign and bidding management. And this is where businesses can be particularly prone to overpaying for clicks and traffic. There are a range of approaches to campaign structure, which can become increasingly complex and time-consuming to build and manage.
The most basic approach is one Shopping Campaign, with one Ad Group within it. While it’s a quick and easy method, the lack of granularity and control means you’ll be missing out on multiple ways to optimise your performance and lower your business costs.
To improve this, many Google Shopping providers will create two or more campaigns which use Campaign Priorities to control which are most likely to appear. For example, customers may react very differently if they are searching for a product with your branding. With one campaign, you may be paying a higher amount to reach people who are already your customers.
The simplest solution is to create duplicate campaigns for Brand and Non-Brand traffic. By assigning both a high Campaign Priority, and brand-related negative keywords to the Non-Brand campaign, it will be shown unless someone is actively searching for your business as part of their query. At which point your Brand campaign will be displayed, with the potential for different bidding strategies.
Going further requires three tiered campaigns. Or increasing the number of Ad Groups within each campaign to gain more control over bidding, access more accurate search term data, and easily identify and react to poor selling products.
Without multiple Ad Groups, some products will struggle to get any exposure or clicks as they’ll all have one single bid amount. And if you don’t stock every product from a brand, it can be hugely time consuming to add those items to your negative keyword list. Meaning that you can easily spend money advertising on a search for something you don’t even sell!
With one, or a small number of large Ad Groups, you can also end up being misled by high performing products. The natural tendency will be to increase the bidding on the whole group, which results in overpaying for all of the low converting products grouped together with your star sellers. A better solution will be to select those winning products and form new Ad Groups or manage them at an individual level.
As you might imagine, controlling three campaigns with many multiple Ad Groups can become enormously time consuming. But the most granular approaches are the most optimised solution for Google Shopping. That’s why AI and machine learning can provide much better results without massively increasing the cost and resource required.
For example, since working with RedBrain to test and compare Google Shopping campaigns with a premium CSS partner, Cotton Traders have seen a 41% decrease in CPC costs and 55% reduction in CPA fees.
Google Shopping Campaign Management
After going through your business strategy, website, your product data feed, and the campaign set-up, you might feel like you deserve to sit back and watch the sales flood in.
But if you want to avoid overpaying for Google Shopping ads, and deliver the best results, you’ll need to constantly monitor the performance of your inventory. The only real alternative is to work with a trustworthy CSS partner who can handle ongoing management and optimisation for you.
Checking the performance of a Google Shopping campaign can be done via several places within Google Ads:
- Product groups page
- Products page
- Dimensions page
- Auction insights report
- Bid simulators
For example, an Ad Group may be performing poorly. But the overall figures may have been dragged down by a small number of lacklustre products. These items need to be split out to analyse if there’s an issue with the pricing, the Product Listing Ad details, sales are affected by seasonality, or any other reason. Otherwise you’ll be overpaying for low performers, and under bidding on your successes.
The performance of a product on Google Shopping won’t just change on a daily basis, but throughout each hour. If you’re not able to adjust your bidding for the quieter times of the day, then you’ll be paying far more for non-converting impressions from people unable to sleep rather than actual customers.
But this does lead to an opportunity if you, or a CSS partner, can use the hourly data with remarketing lists to target previous website visitors to return and make a purchase.
You’ll also need to constantly monitor your product pricing and availability. A successful product could drop in performance due to competitors lowering their prices or running a promotion. Pricing is a very important part of success for both Google and customers, even if the difference might be as small as a few pence. Changes to availability or other product details on your website can also mean an item no longer displays, or becomes disapproved for Shopping Ads.
Testing small changes can be hugely beneficial to your Google Shopping campaign performance and costs. But running individual or multiple tests can be enormously time-consuming, unless you can access the experience and automation to continually optimise your campaigns efficiently.
So why are brands still overpaying for clicks?
Most businesses overpaying for Google Shopping ads won’t be able to track the excess expenditure to a single issue. Many might not even be aware that they’re spending more than is necessary, because it will be due to a cumulative lack of enough time, resource and experience.
For the very smallest companies with 10 or 20 products, this isn’t likely to be a major issue. And the very largest brands with specialist in-house teams will be able to evolve their knowledge over time. But for the vast majority of businesses, the quickest and easiest solution is to work with a premium CSS partner who can supply the knowledge and automation to optimise large product inventories at scale, and in a relatively short timescale.
The biggest savings can be found by working with one of the few CSS partners with the confidence and performance to offer a partnership on a CPA basis. By only paying a commission on completion of a sale, any business can remove the risks of overpaying for Google Shopping ads. And also benefit from the advice of experienced specialists for their business and website.
Working with RedBrain has already saved 20% on Google Shopping CPC costs for Missguided, while also delivering £500,000 in incremental sales. Meanwhile, Cotton Traders have seen a 41% reduction in CPC outlay, and 55% decrease in CPA commissions since testing RedBrain services. With many more examples, it’s clear that brands are still overpaying for clicks simply by not taking up the simple solution of premium CSS partners offering a CPA solution with no upfront fees.