Pushing Your Shopping ROAS Even Higher

Have you ever thought, “How can I maximize ROAS in Google Shopping by means other than optimizing bids and negative keywords?”  Figuring out how not to over bid on lower priced items and eliminate wasted spend is key.  

Previously, with one of our retail client, I had separated the campaign by brands via ad groups that they carried.  However, looking through the results, I noticed within the brands that the products had various price ranges to them. It was labor intensive task to manually adjust each product ID (product feed had thousands of items).   

Looking for a better way to organize the products, I decided to reorganize the campaign by “Tiers” then break it down further by using Custom Labels to group the products by price range. First, I needed to decide how to break the brands up in order to focus only those higher performing brands.  Analyzing the conversion data, I decided to break the account out in 4 Tiers:

Tier 1 – Separate campaigns for top selling and seasonal brands
Tier 2 – High converting brands
Tier 3 – Medium converting brands
Tier 4 – Low converting brands

Tiers

By creating tiers based on top brands (this can also be done with product categories), I focused my ad spend on those brands and products that generated the most conversions, thus giving me the most effective ROAS.  To do this, you would look at your Google Ads performance for the past year or two, get a sense of how many conversions each of your brands are receiving and try to create groupings of brands that have similar conversions. You may also want to consider creating individual dedicated campaigns for the top selling brands.  Give yourself a benchmark to work with, say if you see brands that have 500+ conversions more than the others, you may want to consider breaking them out into individual campaigns. This will make it easier for you to make adjustments for these AAA products.

As well, you should analyze sales patterns in your Google Ads. It will help give an indication that there are any brands converting better or predominantly during certain periods. For example, if you notice that Brand A is only converting during the Holiday period, you may want to focus your spend during this period. In this case, I would create a separate campaign for Brand A and only turn it on during the Holiday period and save the spend in the other months.   

Once you have determined how you want to split up your campaigns in Google Ads, you can then further break it down by creating custom labels.   

Custom Labels

Utilizing custom labels will help you better organize your campaigns.   You are allowed up to 5 spots for these in your product setup. Some of the best used cases for custom labels is organizing your products by:

• Profit Margin
• Seasonality (Spring/Summer/Fall/Winter)
• Features ie: Color
• Occasions (Halloween/Christmas)
• Price Ranges

In this blog, I will be using custom labels for price ranges as the label used for Retail Client X.

To get started, I needed to quickly glance at all the product prices and find a suitable range that I could group products together. I decided to segment the product in the following price groupings:

• Under $20
• $21 – $40
• $41 – $60
• $61 – $80
• $81 – $120
• $121 – $199
• $200+

There are 3 ways to do create custom labels:

1. Using your ecommerce platform, but this manual and tedious.
2. Creating and uploading a supplemental feed in Google Merchant Center.
3. Using a feed management platform such as Feedonomics.  

In this situation, the client did not have a feed management platform and creating it through the ecommerce platform would take too long based on the amount of products they carry.  So I opted to go with a supplemental feed.

To do so, I exported the product feed into an Excel or Google sheet.  You have to manually input the segments for each product. Like so:

Once this has been completed, you would then need to upload it to Google Merchant Center as a supplemental feed.   This will act as supplemental information to the Primary Feed.

Once you have uploaded the supplemental feed and the product has been updated in Google Ads,  you can then go into Google Ads and start separating your account.

Now that I have broken out my campaign based on top selling brands and then furthermore into price ranges, I can get a better sense on how to adjust my bids and budgets. The idea here is to control your bidding to what makes sense based on the item (granted that profit margin is the same across the board).

For example, I wouldn’t bid $1.50 for a $12 item but I would for a $60 item.  Or I can be more aggressive in my bidding if the $12 item had better conversions.   This will help indicate where to focus my bids and budget, thus minimizing wasted spend on items that aren’t converting or over bidding on lower priced items.  

In the end, it’s good to utilize all the tools that Google Ads has to offer in order to take your client’s ROAS from point A to point B.

Why Not Hire Us for an Audit?

We can do your audit for you! Sometimes, seeing what’s in front of you is hard. Let us be your eyes and ears on the ground, and we’ll sniff out the missed opportunities and chances for better optimization. Let us add some time back into your day.