It’s hard to find enough superlatives to describe the growth of marketplaces in recent years. The marketplace model is undeniably a win-win-win; it’s attractive to sellers, shoppers, and, of course, the marketplaces themselves.
Ecommerce as a whole has grown at a pretty steady rate of 13–15% annually. Google Shopping is also growing at a staggering pace. For Q1 of 2016, revenue from Google Shopping product listing ads (PLAs) grew 52% year-over-year. A huge portion of that growth is from mobile with mobile clicks on PLAs growing 171% year-over-year.
With that kind of growth, it’s hard not to be bullish on marketplaces.
I’m a bit of a Google Shopping fanboy. But, given those numbers, can you blame me? Since May of 2012, when the platform transitioned from a free model to a pay-to-play model, I’ve been closely watching and actively managing campaigns. For our agency’s clients, few channels bring the consistent sales performance that Google Shopping does. We regularly see return on ad spend (ROAS) results in the 350–1,900% plus range. This means that for every dollar our clients invest in Google Shopping they are seeing anywhere from $3.50 to $19 or more in direct sales revenue. That’s not taking into consideration assisted conversions (indirect sales) or customer lifetime value. These numbers are strictly the first purchase after someone clicks an ad, making the increase in revenue even more impressive.
Google Shopping can be a perfect complement to a traditional marketplace strategy. I’ve worked with several merchants who began by selling only on marketplaces and then transitioned to running their own ecommerce store. For those merchants, Google Shopping is usually the traffic source I recommend first because it’s the surest path to predictable results. While Google Shopping isn’t a perfect fit for every merchant, it’s a channel you should strongly consider. Here, I’ll tell you when, why, and how to dominate on Google Shopping.
Sell Via Any Channel That Makes Sense
There are three guiding questions that can help you decide when to sell on Google Shopping:
1. Are your ideal customers using this channel to shop for products in your category? This should be an obvious one, but it’s worth mentioning. If you’re considering Google Shopping, you should ask yourself: Do searches for my product type yield Google Shopping results? Does the combination of image, title, and price present a compelling enough case to drive quality clicks? Is your product a brand new concept that takes some in-depth explanation or a long selling cycle that could give you trouble gaining traction on Google Shopping?
2. Can you manage it correctly?
Ask: Can we devote staff time and resources to learn this channel or are we willing to invest in hiring an outside expert or agency to help? Specifically for Google Shopping, are we willing to learn the finer points of data feed management, bidding, and campaign structure? If not, don’t waste your time here.
3. Can you scale or hit your targets?
Scaling may not be a priority issue for you. Maybe you’re just looking for something that provides an acceptable return on investment rather than explosive growth. Another way to look at it is, will this channel be worth your effort? Will the time, money, and other resources required bring an acceptable return or would you be better off looking for another channel? The answer to this question will depend greatly on the answers to the first two questions.
Advantages Google Shopping Delivers
Google Shopping is a top traffic channel for many merchants for the following reasons:
1. You own the relationship.
While Amazon, eBay, Etsy, Sears, and others have benefits aplenty, one of their biggest drawbacks is the marketplace owns the customer relationship, not you. With Google Shopping you fully own the customer relationship. You’re building a customer relationship, rather than simply making a one-time sale. While it’s possible to use marketplaces to generate direct customers who know and love your brand, it’s much easier with Google Shopping.
2. You control the funnel.
Generally speaking, shoppers who click on PLAs are lower in the shopping funnel, or closer to making a buying decision, than shoppers who click on banner ads or even text ads. That said, not everyone who clicks on your PLA will buy. Far from it. Likely you’ll convert only 1–5% of customers who click on your PLAs. What do you do with the other 95–99% of visitors who DON’T buy? Remarket to them and get them into your funnel. A sample funnel might look something like this: prospect clicks on your PLA > prospect visits your product pages > prospect leaves > prospect sees your remarketing ad and clicks > prospect signs up for your newsletter > prospect reads a blog post > prospect makes a purchase. In contrast, if someone sees your product detail page on a marketplace and doesn’t purchase, there’s not too much you can do to pull them into your funnel.
3. You can track, measure, and improve.
You’ll have data available from the marketplaces, but the data Google AdWords and Analytics provide is hard to beat. You’ll have product level sales data and search query data matched up with engagement metrics. You can gain insights related to keywords that can impact your text ad campaigns and your SEO and content strategies. If you’re willing to mine it a bit, you’ll find exceptionally actionable data from Google Shopping.
3 Crucial Areas for Success with Google Shopping
While this certainly isn’t an exhaustive how-to Google Shopping discussion, it will certainly help get you started on the right foot.
1. Channel Your Inner Nerd: Data Feed Optimization.
A properly structured data feed is the foundation of a successful Google Shopping campaign. Your data feed is a list of all the required details about the products you want to promote via Google Shopping, formatted according to Google’s preferences. Each product you submit will have as many as a couple dozen required fields of data, and different product categories have different required fields. For example, if you sell apparel you’ll have to include attributes like color, size, and gender while other products, like electronics, require other attributes.
I want to spend a minute on four of the most important data feed components because they have the largest impact on what keywords you’ll show up for. With Google Shopping, you don’t get to explicitly pick your keywords like you do for text ads. Instead, Google will crawl your product feed and your product page and determine what keywords your product listing ads are relevant for, although you can add negative keywords at any time to limit your exposure. Your feed will largely determine whether you are gaining the right exposure.
- Title. Let’s say you are selling a wrinkle-free, moisture-wicking men’s polo. Let’s say the name of your super awesome polo is the Augusta. Simply giving Google Augusta as your title would be pointless. Google can’t tell what it is just from the title. Is it a shirt? A new ashtray? A book? An optimized title for your make-believe polo would be: Augusta (your awesome brand name) Men’s Wrinkle-Free Polo, Moisture-Wicking, Red, XL. This is a well-crafted title because it highlights the most important keywords your ideal customer might be searching for. When Google decides what keywords are relevant to your product listing ad, they consider the title first. Remember to put your most important keywords toward the front of the title as they will be given more weight. Also, keep in mind Google’s preferred 150 character title limit.
- Description. Google also strongly considers your description when determining when to show your product listing ads. Don’t think sales copy here, think keywords. What other details will prospects be searching for that you should include to accurately describe your product? In our polo shirt example, we would probably reemphasize some of the elements in the title and add in additional elements that wouldn’t fit in the title, such as the type of fit or cut of the shirt, the material, and maybe the collar type.
- Google Product Category. This is a required field for each product in your feed, and t’s based on Google predefined taxonomy (classification structure). You can download that taxonomy here. The key here is to get as specific as you can. You can only choose one category from the Google taxonomy and many products can fit into more than one category. It’s important to chose the most specific and most accurate category. While you could pick the category Apparel & Accessories > Clothing for our polo shirt example, it would be better and more accurate to pick Apparel & Accessories > Clothing > Shirts & Tops.
- Product Type. While this is an optional field, it is highly recommended. This field really has no hard or fast rules. Use this area to add further clarification to your product. Often we recommend using your category path for the product type. For example, you might list Nike > Golf > Activewear > Polo Shirts as your product type. Be creative here.
2. Structure Your Campaigns for Visibility & Transparency.
There isn’t one right way to structure your campaigns, but the ultimate goal is to allow for visibility and transparency. You’ll need to easily see what’s working, what’s not, and then quickly make the right adjustments. When we build our campaigns we treat each product as it’s own business unit with it’s own P&L calculations. We also make sure we can give priority products ample budget. We need to be able to quickly identify deadweight products—products hogging budget without worthwhile returns. We either want to bid way down on these deadweight products or run a search term report to see if we’re simply getting the wrong clicks. If you have limited products—say, fewer than 100,—then you might just choose to have all of your products in one campaign.In most cases, I also recommend a Top Sellers campaign and maybe a few others. Here is a list of campaigns to consider:
- All Products: Almost all our clients have a campaign with all products in it. Usually this campaign has lower and less aggressive bids in it. This make sure everything we want to sell via PLAs has a chance for impressions and clicks.
- Top Sellers: Likely your most important campaign, this is where you put your most important products. Often we then subdivide top sellers into different ad groups or possibly other campaigns by price point and brand. For top sellers, we bid more aggressively. We also closely watch our search impressions share and ROAS per product as well as actively manage negatives to make sure we’re only focused in the right areas. This is increasingly important for your Top Seller campaign(s) because you’ll likely be placing higher bids.
- Seasonal & Sales: Selling snowboard pants and want to isolate them and bid way up as the slopes start to open? Running a sale on camping gear in the spring? These are situations where you might pull these products into a seasonal or sale campaign with limited run dates and aggressive bids.
- Local: If you have a brick and mortar store, you might also consider a location-specific campaign. This is where you set up a campaign with some or all of your products and then limit the location targeting to the geography where you pull in store shoppers. We help a western wear store with Google Shopping, and they told us they didn’t want anyone in a 50 mile radius to miss seeing their product ads. And why not? If someone is looking for a new pair of Justin boots and they don’t know they can buy them locally, why not put a Google Shopping ad in front of them?
- RLSAs: Remarketing lists for search ads, or RLSAs, are now available for Google Shopping campaigns. This structure allows you to upload your remarketing list and adjust your bids for Google users who have been to your site before. The idea here is that someone who has been to your site before may now be searching for something you offer but aren’t aware you offer it. Make sure you have every chance to win that impression and click and, ultimately, the sale. Here are detailed instructions on how to set up RLSAs for Shopping.
3. Water, Weed, Plant.
This is where you can take a campaign that’s getting decent results and really create some magic. Think of your Google Shopping campaigns as a garden. Healthy, picturesque gardens are not untended gardens. Someone is carefully weeding, watering, and planting. Same concept applies here. If a product is doing well, give it more traffic by bidding more on it. If a product is sucking valuable budget with no return, drastically reduce the bid, modify the feed data, or consider removing it altogether. How often should you adjust bids? That depends on the size of your feed and how many clicks you get. At a minimum, I recommend looking at your account three times or more per week and making bid adjustments at least once per week. For some larger accounts with tens of thousands of SKUs, I recommend daily check-ins with multiple changes per week.
Like anything worth doing, Google Shopping is worth doing well. It’s growing faster than any other comparison shopping engine (e.g. PriceGrabber, Shopzilla, Nextag, etc.) and is growing as fast or faster than the marketplaces. There’s really no slowdown in sight either. As more merchants see the light and focus their efforts on Google Shopping, strong structure and execution are a must. Good Google Shopping strategy as discussed in this post mixed with proper marketplace strategies and good ecommerce growth tools and strategies make for a potent combination and will ensure you have a share in the remarkable growth of ecommerce.
Also, check out my Ultimate Guide to Google Shopping recently published with Shopify.