This is the second in a series of articles about how to best manage your bids on Google Shopping. In our first article, we referred to the importance of making sure the quality of the information that relates to your ads is correct and optimised for selling online (your product or data feeds) - that is the first step and its key, but second to that, you need to get wise in your bidding tactics.

Alongside your product feed, the search queries that your products show for and the overall profitability of your shopping campaigns are very much determined by the bid value set for that particular product. If your bids are higher than they need to be you could destroy your efficiencies, but bid too low and it would be hard to get much traction.

So how do you find a good middle ground? How do you make sure customers know that you have the product they are looking for without impacting your profitability? It sounds daunting but with a good bidding strategy and some practice, there is no reason you can’t make it work! Here are some things to take into consideration to help you work towards profitability.

1. Price of the product

You do not need to be a mathematician to know that a £20 pair of headphones should have a different bid to a £700 Laptop.This is a mistake commonly made amongst merchants. Having the same bid for all products is not a good idea. Consider suppressing really cheap items from your product feed – if you have a product range priced from £5-10 by the time a click actually converts you may already have spent too much on it for it to be profitable.

2. Margin

Looking at product price is a great place to start, but not the only thing you should take into account – all your products will have different margins. Keep this relatively simple. How much do you sell the product for – how much did it cost you. You can afford to spend more on products with higher margins – so know what these are when building your shopping campaigns.

3. Conversion rate

It’s likely your paid search conversion will be lower than your on-site conversion. Remember this when setting bids (and internal expectations). Direct visitors to your site and those who have organically searched for you are more likely to buy than someone doing generic searches on Google Shopping. Then your best sellers might convert two or three times better than your site average – but you will only know this further down the line. Be cautious.

Once you have a good idea of the three key metrics above you can determine what your maximum bid is and start optimising from there. Use the below formula as a starting point:

Retail price of product – cost of product = Profit

Profit x conversion rate = Max bid  

Don’t start with your maximum bid, but rather cut this in half for a new product to test the waters, then depending on product performance, begin optimising accordingly, bidding up/down depending on actual conversion rate.

Here are some further tips when optimising your bids depending on the aims and objectives of your business:

• Use higher bids if you are trying to build brand awareness and show for competitive terms. If getting exposure is more important than a strong ROI initially then go in with your max bid, use lower bids for long tail keywords, LCD TV will command a higher CPC than Samsung LCD Smart TV 3302.

• Always make sure you have access to product level performance data – not all TVs will be performing the same, make sure you have the flexibility and insight into product level data to make bidding decisions.

• Lastly ensure you have tightly structured campaigns, ad groups and product groups. Populate the custom labels in the Google feed, split your campaigns by category, price, margin or anything else you think will help you determine your bid.

Make sure you keep a close eye on bids one to three times a week, benchmark your CPCs, make use of negative keywords and bid adjustments in Adwords. Remember you don’t need to be a genius to find a sweet spot – you just need to have insight into product level performance and lots of practice!

Of course in this day and age, these tips are all useful, but often difficult to scale with multiple products and in a global environment – and this is where technology can help, to automate a lot of these steps and provide you with the statistics for analysis, to help you make the right decisions.


By Samiksha Bhasin, head of performance at Intelligent Reach

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