How to make money with Google Shopping: the guide for business. Part I. Launching and choosing a strategy
Read the whole Google Shopping guide:
Google Shopping is one of the coolest things for online stores. And these aren’t just words: in 2017 alone, Google Shopping provided 75% of all paid clicks on retailer ads, and the investment growth was 25% compared to the previous year. And this is while for usual text ads this number usually is only 3%, according to Sidecar’s Google Shopping Benchmarks Report.
Google Shopping is profitable for both consumers and business. A user can get maximum information about products before the actual click. Which means, if they make a click, their intentions to buy are rather serious. And this comes in handy for us advertisers.
The first half of this guide — some harsh but very important settings, without which your ads simply won’t show. If your Google Merchant is nice and up, you can skip this part and move straight to product feed optimization basics (and we’re going to talk about it in detail in part 2 of Google Shopping’s guide).
Introduction to Google Shopping
Google Shopping ads (they’re often called Product Listing Ads, or PLAs) are available in 43 countries to all the business that have physical goods to sell.
Shopping ads can be served above the search results or to its right.
The most important thing about shopping ads is that they can demonstrate products and prices before a user clicks on the link.
The ads contain so much information that the actual clicks are made by users with a purchase intention stronger than with usual text ads. And we mean that.
Here’s an example of how profitable shopping ads can be from our client, medical goods and equipment seller:
With Google Shopping, you get visitors who already know what your product looks like and how much it costs. Which is extremely handy.
How Google Shopping works
With other Google Ads, it’s simple: you add keywords and that’s it, the ads are served by that list. A cakewalk. With Google Shopping, it ain’t gonna fly: its keyword targeting capabilities are next to none. Instead, the shopping ads work based on the product feed located in Google Merchant Center.
Setting Google Merchant Center
Google Merchant Center is the main source of all product data. This data is stored in the product feeds.
The feed is a sheet which contains data about all of the products from your online store. It shows product title, description, link to the product’s page, link to the image, whether it’s in stock or not, price, condition and more.
It is thanks to the feed that Google Shopping doesn’t need keyword targeting.
Here’s how it works:
Google Search gets a search query from a user
It checks the feed for products matching the search query
If the system finds a relevant product, it shows the ad to the user
The feed is the root of the tree, so it’s important to know how to work with it right. If you fill it in improperly, Google simply won’t consider your products relevant to the search query and won’t show your ads.
Google Merchant Center rules are set out in their Beginners’ Guide. Here are the main ones:
- you can only add the goods that you really sell to the feed. You can’t place partner links (outside the Affiliate Advertising);
- the product link should take visitors to the page where they can make a purchase straight away. It has to be that very product page, not a category/section one;
- the website should contain information about payment and refund;
- it’s important to follow safety rules: to collect sensitive information only on pages with SSL etc;
- shopping ads are written in the targeting country’s official language. But there is some exception, for example, in Ukraine, shopping ads in Russian are acceptable.
Filling in the basic information
When you’re passing the registration’s first stage, keep these in mind:
- the store name is what the users will see. So don’t go with the legal wording, go with the one you expect your customer to know;
- make sure to tick “Adult” box if you sell adult products. When registering an account, the sites are checked, and withholding such information can cause blocking.
Verification of your website
“Before you can upload product data to Merchant Center, you need to verify and claim your store’s website URL. Verification lets Google know that you are an authorized owner of a website URL. Claiming associates the verified website URL with your Merchant Center account”, Google Merchant Center.
There are a few ways to do it:
- upload an HTML file (you’ll be linked to it while registering);
- install the given HTML tag in the <head> before <body>;
- use Google Analytics;
- use Google Tag Manager.
Each of the four ways implies adding a small fragment of code onto your website.
We usually use Google Tag Manager. There can be a lot of different tags on a website: Google Analytics, AdWords remarketing tag, AdWords conversions (e.g. call tracking), Facebook Pixel, etc. This results in code mayhem: too many tags, all of them differ, all of them have to work correctly and, to make things worse, new ones are added constantly. GTM serves to organize and consolidate the code on the website.
To add the GTM code to your website, create/open a GTM account, go to the Admin tab and select “Install Google Tag Manager”.
The system will give you this piece of code:
Install it on your website.
Tax and Shipping Settings
For everything to work nicely, you’ll need to set two more things:
- tax (the US only);
- shipping (everywhere).
Shipping setting are very simple, you just have to set zones and shipping services.
When setting shipping services, you’ll need to set the time before which your customers will have to place an order if they want to receive their purchase on the same day, order process time, transit time, minimum order value (optionally), as well as shipping costs.
The shipping costs allow you to set rules for different types of orders. The shipping cost may be the same under any conditions or vary based on the product price, its weight or number of items. For example, you can create rules like ”Free Shipping for Orders from $10” or any other similar offers.
Now that you’ve got your URL verified and tax and shipping settings ready, it’s time to tackle your product feeds!
Creating and loading product feed
Like we’ve said, feeds are sheets with product data just like Microsoft Excel or Google Spreadsheet. Every column is a certain attribute (title, price, description) and every line is a particular product. Product data stored in the feeds is used by three Google services: Google Product Search, Google Commerce Search and Google Ads.
It’s worth mentioning there are primary feeds and there are supplemental ones.
“A primary feed is the required data source that Merchant Center uses to display your products on Google. If the product data in your primary feed already meets our product data specification and policies, creating and submitting a primary feed is the only feed action you will need to take. Product data that does not meet the Merchant Center requirements can be adapted by using the advanced feed features, including supplemental feeds. In addition, you can use supplemental feeds to enhance or override your product data to improve the performance of your ads”, Beginner’s Guide tells us.
Supplemental feeds aren’t considered as independent data sources. You can’t use them to start a shopping campaign as such. But you can use them to correct and adjust the primary feed. Here are a few more things you can do with the supplemental feeds:
- add or change custom labels to manage the campaign: you might find it useful for structuring the campaign, for example, to add all the products with the same label to one group;
- add or change promotion IDs;
- change the product titles;
- exclude certain items using excluded_destination attribute, et cetera.
Why is it more convenient to use the supplemental feeds for those actions but not the primary one? Here’s why:
- it takes quite a while for a feed to be moderated in Google Merchant Center; if you spot a mistake in an attribute or you need to exclude an item, things have to be done fast and you can only do it fast in the supplemental feeds because changing the primary feed will be time-consuming;
- it’s more convenient to add changes to the supplemental feed in order to avoid the other products getting re-moderated: during re-moderation, ads aren’t shown, which means that even goods with relevant information will stand idle.
These are the main things you need to know about the supplemental feeds. Want to know more? Let us know in a comment and we’ll make an article with a detailed analysis of the supplemental feeds.
But as of now, we’re going to focus on the primary feeds.
Setting requirements are called feed specification. If you indicate data that doesn’t align withspecification, Google Shopping ads won’t be served.
Feeds include different products and every product should have various information attached: ID, title, description, link, and so on. All these values are the attributes. There are 3 categories of attributes: “Required”, “It depends”, “Optional”.
“It depends”-type of attribute is, for instance, item condition attribute. It’s required for used and refurbished products but it isn’t mandatory for new ones. Color attribute is mandatory for clothes and other products that come in different colors if they are sold in Brazil, Germany, the UK, the US, France and Japan. But if these products are placed in the feeds which targeted at other countries, color attribute may not be used.
List of all types of attributes from Google Merchant Center Help:
Here we have a few little issues:
- GTIN – Global Trade Item Number, assigned by the original manufacturer;
- MPN may be indicated if the product hasn’t GTIN assigned by the manufacturer;
- if you sell handmade goods, you need to specify neither MPN nor GTIN;
- the Multipack attribute is used, if you sell a set of goods as a single product, for example, a set of 6 candles (one product, 6 units in it).
Upload and fetch
You can use several ways to upload a feed to your Google Merchant Center account.
Most often, the choice depends on the range vastness, update frequency, and available IT resources.
For example, if you have a small online store for 20-30 goods (max up to 50) and you don’t want to waste your time on some technical issues, the easiest option for you would be feed creation through Google Sheet in Google Merchant Center:
- Go to Merchant Center → “Products” tab in the left menu → Feeds section → “+” button.
- Choose a language and country for sale.
- Specify the method of form loading — Google Sheet.
- You can choose to load an existing sheet or creating a new one on the basis of the template. We choose a template as it will help us a lot.
- Here you can also create a fetch schedule so that the product data is automatically updated. We recommend to set up a schedule because Google requires you to update your feed at least once a month, even if the range doesn’t change so often. If your product range changes very quickly, Google allows you to upload a full feed maximum four times a day.
- Your sheet will appear in the feed list. Open it.
For easier feed creation is often advised firstly to download a sheet from the CMS with all the goods and based on it create feed via Google Sheet. For example, in Shopify CMS this function is called export. As a result, you upload a sheet with many parameters: Title, Body (HTML), Type, Tags, Image Src, Image Alt Text, SEO Title, SEO Description, and a few dozen terms.
We tried different methods and don’t agree that it’s most comfortable to create feeds like this. Exporting is uncomfortable because you have to independently create a feed for the Merchant Center, watch out for each attribute, and make the correct format.
Remember that Google Sheets needs to be created and updated by your hands. If you have more than a couple dozen products in stock, that’s not an option.
For larger stores (more than 50 products) it would be better to choose the file input method:
- an XML file created by the developers, which is automatically updated with changes on the website and which is available by link;
- Content API — plugins or apps that are updated automatically.
In our experience, plugins are one of the most suitable options. Here is provided work with the product feed specification: you just have to select several settings in the interface of this application (the main one is ID of merchant center, country of sale, currency). And that’s all, the feed will be generated automatically.
The only drawback of loading with the Content API is that the feed created in this way can only be used for one country. If you need to advertise in several countries, you must choose another option for creating feeds.
Let’s briefly summarize:
- if you have up to 50 products in your store, you don’t want to deal with technical issues and are ready to make a feed by your hands, choose Google Sheets.
- if there are more than 50 products in the store or you want to automate processes immediately, in order to unload yourself from manual work, select the Content API or uploading via XML file.
Choosing a Shopping campaign structure
A campaign with a single ad group, which includes all the products of an online store at once is horribly ineffective. The budget is spent, conversions are lost, shortly, nothing good. KlientBoost called it The Mob Effect. We can see The Mob Effect, first of all, if shopping campaigns don’t have a well-thought-out structure and settings for finding the most profitable products/queries, and discarding the least effective ones.
For example, often there is a campaign with a single product group and one bid for all products in it:
The drawback is that you can’t select a bid specifically for the product.
All products differ in price and profit. There is no reason to set the same bid for them when all the other indicators are different.
Here it is worth remembering the Pareto principle about 80/20: 20% of the goods will bring 80% of the profit. Of the remaining 80%, there will be a lot of goods that over-budget themselves, since they are more popular in the market there are a lot of clicks and high costs for them but profits are equal to zero.
Two tips on how not to fall into this trap:
- bids should be set at the product-level (id of product), taking into account their effectiveness (ie, conversion and profitability);
- we don’t recommend automatic bidding and Enhanced CPC (eCPC) at Shopping if you have products with different prices and margins and return to the first tip ↑
The more granular structure of campaigns, the easier it is to control the situation. And the better you control the situation, the more productive the work as a whole. Especially for this, we — Penguin-team — collected the most effective strategies for working with Google Shopping campaigns.
Important! A strategy is not all about structuring, it also implies techniques that you can use to make your campaigns more effective. Therefore, further you will find a few ways of structuring + few strategies that can be applied regardless to how your campaigns are organized.
Strategy #1. All products in one group with bidding per unit
For this strategy, we separate product group “All products” by ID of each product. First, we set the same bid for all products and track conversions. Based on the obtained data of the CTR, cost of conversion and other numbers, we change the bids for each product separately in order to maximize the results.
This way is suitable for small online stores (up to 50 products) with similar products and the same price for every item. Like if you sell one product in several colors.
If you don’t have much time for optimization, use this strategy only for stores with a range of 15-20 products.
For example, for one of our campaign, we have set higher bids for product colors with lower CPA. But products with low effectiveness in Google Shopping got bid lower than average.
With such strategy, you can stop wasting the budget on products with low conversion capabilities and concentrate on selling most effective and profitable items. It would seem that products of different colors would have the only difference in CTR… But in fact, they also have a different conversion rate and cost per conversion. Such strategy allows you to use this data to improve your ad results.
Strategy #2. SPAG — one group for one product
SPAG (single-product ad group) is the shopping equivalent of SKAG — single keyword ad group. To do so you have to put every product into a separate ad group.
SPAG strategy can be used for online stores with up to 100 products in a range. The main difficulty is in the organization of such campaign. If there are more than 100 products, the structuring will kill almost all working time of PPC specialist and this is absolutely unacceptable.
Penguin-tip: even large online stores can use SPAG, just not for all products. You can make SPAG on some part of the range, specifically for most profitable products.
Here’s an example. SPAG makes revenue and ROAS grow and CPA fall.
When all of your products are in the same ad group, it’s very difficult to work on bidding. So it makes almost impossible to improve ROAS. SPAG solves this problem. When you have only one product in each separate group, it is a lot easier to increase the impressions for the best-selling products, easier to collect negative keywords on a product-level. Each dollar in your advertising activities will bring maximized results.
You can use cross-listing negative keywords. For example, with the product “moisturizing cream” you can take face, hand and foot creams into separate groups and add corresponding negative words to each one. It will help on the query “moisturizing hand cream” to show exactly the hand cream.
Strategy #3. Query-level bidding structure
You can’t target any keywords in Shopping campaign, remember? And when you don’t have keywords, you definitely can’t bid on it. Unfortunately. This problem can be solved by query-level bidding structure.
This strategy is NOT suitable for businesses with a low budget. To use it you have to create 3 campaigns and therefore, separate the budget into all of them. So the budget should be large enough for at least 20-30 clicks per campaign per day, which means that if the cost per click is, let’s say, $1, then the budget should be at least $60 per day for 3 campaigns. And this is the main restriction of this structure. Except this, you can use such strategy for any type of business with a range of any size.
Query-level bidding allows you to split your website’s traffic between 3 types of query: general, branded, product-level. Just like we do in the search campaign. For segmentation we use priorities settings, shared negative keywords lists and the shared budget for all 3 campaigns. Into the campaign for general search queries (like “shoes”) we set the lowest cost per click and in the campaign with more high-intent query (like “Nike Air Max 97 Ultra Black”) we set higher CPC.
There are two reasons why highest priority goes to the general campaign:
- first, highest priority allows the campaign to get the biggest part of traffic;
- second, you’ll have negative keywords lists which will help you to split traffic into the appropriate campaigns.
For all 3 campaigns we use shared budget — this step helps to get all 3 campaigns in the same auctions. And that means that negative keywords list will appear in all of its glory, splitting your traffic into appropriate campaign, considering the type of search query that users are using.
This is how the ad serving algorithm looks like with this strategy:
A person writes a query
Google selects a campaign with the highest priority
If there are no negative keywords that blocks the query in this campaign ,Google shows an ad from this campaign
If there are negative keywords that blocks the query, the system proceeds to the second campaign with the next priority level (medium/low) and shows ads from it
With this strategy, you can adjust the bids higher for very narrow queries and lower for general ones because very narrow queries show us a higher intent — and a higher probability of buying. This means that the budget will be spent as rationally as possible: the potentially more profitable the query, the more money is invested in it.
There’s the result after 30 days of using this structure in Google Shopping:
- revenue increased by 9%;
- transactions increased by 56%;
- ROAS increased by 123%.
Strategy #4. Alpha/Beta-structure
Alpha/Beta-strategy is very similar to query-level bidding. The only difference is that you split traffic into general/converting, not general/branded/product-level.
In negative keywords list for Beta-campaign, we put search queries which usually bring us conversion with good CPA (in exact match).
Then we have 2 options. Either we periodically review the search queries in the Alpha-campaign and add to negative keywords those unsuitable ones to the list of converting queries, or we can use a special script for Google Ads, which will save our time and perform the task automatically.
As in the query-level bidding strategy, it makes sense to try Alpha/Beta-structure if you don’t have a hard budget limit.
Strategy #5. Structure by device
Another interesting way of making your account granular — separate device structure: 3 separate campaigns for desktop, tablet and mobile.
Separate device structure will be valuable if you have a perceptible difference in statistics for different devices. Especially in cases when:
- you wanna measure the share of impressions on different devices;
- you want to control device budgets;
- you need a simple way of measuring cross-device attribution to track user interaction with a brand from different devices. For example, when a user first enters the tunnel from a mobile-campaign → then re-enters already from a desktop-campaign → and already then makes an order;
- you wanna set individual bid modifiers by device.
In general, this strategy helps to focus on the most convertible search queries. If they have their own budget and we have the ability to adjust the bid, the number of conversions will grow and their cost will decrease.
Penguin-tip! We do not recommend to combine the structure on devices with bidding on query level. Segmentation will turn out to be very tough and most likely you will get very few data to consider it significant and somehow rely on it in marketing activities. Of course, if you’re a huge retailer with a large range and high sales this tip does not apply to you. However, you can combine device segmentation with SPAG.
Strategy #6. RLSA for Google Shopping
RLSA is a remarketing list for search ads. This function helps to customize search campaign for people who already visited your website and to adapt your bids and ads for them when they search for something in the Google or search partners websites. RLSA for Google Shopping is suitable for any brand if you have some traffic on your websites, ‘cause for launching a campaign you’ll need minimum 1,000 active members in your remarketing lists.
There are 2 basic RLSA strategies for Shopping campaign:
- Bid only (now called Observation). You add a remarketing audience to your campaign and then make bid adjustment on this audience, 30% for example. Now your ads will be shown to everyone, but! But for those who have already been on the website, the ad will show up in a more advantageous position, since the bid will be higher by 30%.
- Target and bid (now called Targeting). Ads will show up only to those who are in the added audience.
RLSA helps you to maximize conversions from the search ads. And more conversions help you to do the bidding more effectively to target the audience with most strong intense. You can do the same in Google Shopping with this strategy.
Strategy #7. Bidding per unit and focus on ROI
In our opinion, this strategy is one of the most effective. There are no restrictions for its use: it’s valid for multi-brand resellers, as well as for mono-brand online stores with any range. For its implementation, you have to categorize all IDs into groups to control the bids — like we did for the first strategy.
For example, your campaign structure can look like this:
group 1 — id1, id2, id3 (everything else is excluded)
group 2 — id4, id5 (every other id is excluded)
group 3 — id6, id7, id8 (every other id is excluded).
There can be more than one category/subcategory of product in one campaign.
* Account for children’s toys.
group Model car — id1, id2, id3
group Police car — id4, id5,
group Fire engine — id6…
group R/C-cars — id…
group Barbie — id…
group Winx — id…
group Baby born — id…
Each product gets its own separate bid, based on its effectiveness, price, and margin. If there isn’t enough statistics on the product (there were no conversions), we calculate the bid based on the average conversion rate. Products with very low margins and low prices should be turned off immediately.
For products with normal margins, we should also calculate the target CPC. Target CPC is the cost per click, at which sales of the product should bring you the desired level of profit. That’s how we can be sure that advertising won’t lead a business into losses.
target CPC = product price * margin * investment rate * conversion rate,
where the investment rate is the share of revenue that the business is willing to invest in advertising (from 0 to 1). For example, an investment rate of 0.3 means that you are ready to invest 30% of revenue in advertising.
Let’s say that the cost of our product is $50, the margin is 0.3, a client is ready to pay half of his revenue (investment rate equals 0.5), conversions rate 4%. Considering this, average CPC of this product will be:
$50 * 0.3 * 0.5 * 0.04 = $0.3
That’s how we managed to turn unprofitable campaign firstly into one that doesn’t cause damage or bring any profit and then even into a profitable one.
If you see that some products still make you lose money (even after using this strategy), you should stop showing them.
When you work on your campaign, focus on ROI (ROMI). Then the margin of the product and the cost of its advertising will be involved in the calculation. If you focus on ROAS, as most advertisers do, product margins will not be taken into account. It means that you can be in the black by income but after calculating the profit, find out that you still ended up in the red.
Important! Like any other, this strategy requires the permanent work of a PPC specialist. It’s not enough just to calculate bids once and apply them. Products get more statistics, numbers change — and it’s important to work away on campaign optimization.
For building such kind of structure you can use Excel or even count all the numbers on your own. But you must understand that it will take so much time that it never will be worth it! To make your work easier we developed The Panda — ppc micromanagement tool. It creates a report with calculations of ROI, profit for each product and Target CPC. All you need is to upload in the system a sheet which contains a margin of the products you sell.
The Panda shows you products with real sales trouble.
And also it shows nicely working items, where all you have to do is to stay the course.
When you know capabilities of every product, you should put the most effective products into a separate campaign with a separate budget. And if you don’t have a definitely effective product, then start with the most appropriate ones (based on reports from other sources). Choose some product from the stock or a category of goods — and focus on it.
The benefit of a product-based bidding strategy with focus on ROI is that it helps really understand whether your advertising is beneficial or not. For example, recently we have been working with this one brand, which had a background like this:
Revenue = $2000
Cost = $1500
Margin = 15%
Considering it, ROAS was equal 133%. It seems that everything is good and advertising is profitable, right? But when we dug a little deeper, we found out some nasty numbers:
ROI = ($300 — $1500)/$1500 = -60%
ROI — minus sixty percent! It turns out that our advertising is completely unprofitable. And it сould have been like this forever if we’d continued to focus on ROAS instead of ROI. Our client wouldn’t make any profit and would hardly understand why it’s like that.
- Shopping campaigns are the salt of the Google Ads. They’re able to boost your sales and provide even more profit to your client’s business.
- Merchant Center and product feeds are at the heart of Google Shopping. Obey the rules and spare no effort to check all settings one more time, if you want your feeds to pass moderation.
- Google Shopping requires your attention all the time. If you want to reap fruits from it, you must put a lot of efforts and time into choosing the effective strategy, account organization, collecting data, campaign management and optimization. But it’s completely worth it!
- The main secret of successful work in Google Shopping for smb is “Divide and conquer”. This is what each of the 7 structuring strategies that we suggest you to use is aimed at.
And when the order with the structure is imposed, you can scale your account to other products and different types of campaigns:
- dynamic remarketing. You also can use product feed from Google Shopping for it;
- search campaigns. Google Shopping plays well with dynamic search remarketing — dynamic search campaign with targeting on people who have previously visited your website;
- YouTube campaigns with Shopping subtype (TrueView for Shopping campaign)…
Next part — something far more interesting! Ready?!