How to Build a Google Shopping Strategy That Sells

Posted by Kevin Kielty on Mar 31, 2016

Google Shopping campaigns are a different animal than the standard AdWords text ads that many companies are used to deploying.

Because of that, it’s not always intuitive when it comes to things like figuring out how much budget is necessary, what impacts the budget and how to manage the day to day so that you get maximum return.

Today, we’ll take a closer look at each of those considerations so you can plan better for the 2016 year.

How Much Budget Should I Allocate to Google Shopping?

The first step when trying to figure out where to allocate paid search budget between, say, the AdWords Search Network and Google Shopping is to define the types of products you sell, and how your target market is searching for them.

It really boils down to choosing the right advertising product for the different stages in your customer’s buying journey. If your customer is still in the research phase, they might be searching with more general terms, like “Viking pots and pans.”

After they’ve spent some time researching different products, they narrow down their focus. This is when their searches become much more targeted. They then might search for “Viking contemporary stainless steel 10 piece cookware set.” This is a person who is ready to buy.

How does this tie into your budget allocations? When it comes to the products that people search for with broad or general terms, they are usually at the top of the funnel, and the AdWords Search Network is great for capturing that kind of traffic.

When it comes to the very specific search terms that relate to the products you sell, Google Shopping is a great way to capture those buyers. Remember that relevancy is key, and the more relevant the ad and product, the more likely users will click through.

On the flipside, if someone was just searching for “stainless steel pots and pans,” and a Google Shopping ad came up from Viking for its contemporary stainless steel 10 piece cookware set, there are a lot of unknowns there.

Sure, someone may click on that Viking ad, but it’s highly unlikely they are ready to convert because they are probably in the research phase. They might consider Viking down the line, but they might not.

Regardless, it’s probably a wasted click, and Google is going to charge you a lot more than it would have if the search term that brought that person to that ad was more specific, because Google knows it's not a match.

That scenario is better suited for AdWords PPC ads to direct potential shoppers to category pages where they could choose between the different cookware sets. Maybe you carry Viking, Martha Stewart and another brand at a lower price point. Now that person can go to where they need to go based on price as the starting point.

In a nutshell, you want to allocate budget to the search network for general terms that represent category-level items, and then you want to allocate budget for very specific products in Google Shopping.

Factors That Impact the Google Shopping Campaign Budget

This is where you’re going to think in terms of inventory. Google Shopping campaigns pull from your data feed [JL1] via the Google Merchant Center.

And the concept of inventory is very similar to how the organic search results work. For example, for every blog article you write, you’re increasing your content inventory on your site to be crawled and indexed by Google.

The more content inventory you have on a topic, the greater the chance your content is going to come up in the search results when someone searches for that topic.

So going back to product inventory. Let’s say you have 5,000 products in your inventory. You’d then have 5,000 product detail pages on your website. That also means you’re going to have 5,000 records in your product data feed. And then you’re going to have potentially 5,000 ads to sell all of those products in Google Shopping.

So when you’re talking about how much budget you should allocate to Shopping campaigns, what you’re really looking for is how much search inventory you have that can give you a direct match to a very specific search query for a product.

And so you can strategically omit certain products in your data feed from your Shopping campaigns.

Another way to do this is if you know, for example, that your average cost per click is $5 and half your inventory sells for under $5, you can just eliminate that half because you know that unless you have a 100 percent conversion rate, those numbers aren’t going to work.

By knowing what the cost per click is and your conversion rate, you can determine which items to prune from the Shopping campaign. Say your conversion rate is 3 percent, and it costs $500 to get 100 clicks to sell 3 products for $15. Those numbers simply don’t work.

How to Get the Maximum Return in Google Shopping Campaigns

Just like the AdWords PPC ads, Google Shopping does take some monitoring and tweaking to get it right. Here are some things to consider when managing Google Shopping campaigns for max ROI:

Benchmark. See what other advertisers are spending on similar items for sale, and you can use that as kind of a benchmark from where you start your pricing.
Click-through rate. View your click-through rate. A lot of times that will just tell you how competitive your pricing is or if there’s a match.
Groom search terms. Head on over to the “Dimensions” tab in the ad platform, and you can see the search terms that are showing up for when your ad is displayed for a particular page.
Negative keywords. If you find your ads are showing up for very broad or generic search terms, you can begin managing that through negative keywords – what you don’t want to show up for. (Note: this can save you lots of wasted ad spend.)

Things to Watch

A lot of times, advertisers will know what their profit margins are on different product categories, and have a preset return on ad spend (ROAS). So when you take sales and you divide it by the ad spend, it needs to be under say, 10 percent (or whatever number the business deems important).

With Google Shopping, if the ROAS ever starts to go out of whack, you might want to make sure that you have your shopping ads broken up into manageable campaigns so that you can zero in on whatever campaign is causing the problem.

The ROAS issue is why companies end up hiring third-party expertise, because usually, someone else managing the Shopping campaigns prior burned through the ad money and didn’t pay attention to profitability.

When to Increase Budget

In terms of increasing Shopping budgets, let’s say you have 50 percent search impression share, and you know there’s a lot more impression share[JL1] to get but the business has a set budget of what they want to spend.

If you know there’s more impression share to get but you have an overall paid search budget that you can’t go over on a monthly basis, a lot of times what you can do is look for places within the AdWords PPC budget, and borrow from that to allocate to Google Shopping.

Let me explain. A lot of times, your Google Shopping campaigns will have double the conversion rates versus your search text ads. So let’s say your text ads have a 3 percent conversion rate and your Google Shopping campaigns have a 6 percent conversion rate.

Let’s say you have an AdWords PPC campaign with a $300 daily budget for a product group, and then you have a similar Shopping campaign for the more specific products that’s also at a $300 per day budget.

In order to increase sales without increasing budget, you can borrow, say, $100 from the AdWords PPC budget and put that into Google Shopping. And poof! You’ve just increased sales by X percent because you moved that budget into a higher converting channel.