4 ways advertisers can win at google shopping

10
Google Shopping Campaigns have rocketed to the top of many advertisers’ budget priorities in the past few years. Distinct from traditional, text-based ads, Google Shopping Campaigns are being used more and more by e-commerce leaders to attract and win customers. As the competition for online customers grows ever more heated, these advertisers are using Predictive Search Bidding to better manage the performance objectives of their Google Shopping Campaigns Predictive Search Bidding uses a combination of predictive analytics and high- frequency bidding to accurately map an advertiser’s bids to changes in click values throughout the day. Many advertisers are already using the technology to secure a competitive advantage and gain maximum efficiency and return on ad spend for their paid search campaigns. Now, they are applying that same technology to win the Google Shopping race. 4 Ways Advertisers Can Win at Google Shopping

Upload: subhadeep-chatterjee

Post on 07-Apr-2017

37 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: 4 Ways Advertisers Can Win at Google Shopping

Google Shopping Campaigns have rocketed to the top of many advertisers’ budget priorities in the past few years. Distinct from traditional, text-based ads, Google Shopping Campaigns are being used more and more by e-commerce leaders to attract and win customers. As the competition for online customers grows ever more heated, these advertisers are using Predictive Search Bidding to better manage the performance objectives of their Google Shopping Campaigns

Predictive Search Bidding uses a combination of predictive analytics and high-frequency bidding to accurately map an advertiser’s bids to changes in click values throughout the day. Many advertisers are already using the technology to secure a competitive advantage and gain maximum efficiency and return on ad spend for their paid search campaigns. Now, they are applying that same technology to win the Google Shopping race.

4 Ways Advertisers Can Win at Google Shopping

Page 2: 4 Ways Advertisers Can Win at Google Shopping

Google’s first major release of paid ads that included images, descriptions, and prices started with the introduction of Product Listing Ad Campaigns (PLAs) in 2011. Part of the motivation for this format was to deliver more relevant content to searchers and a way to view multiple retailers on a single search query. In 2015 Google updated the way advertisers manage PLA campaigns in AdWords by implementing Google Shopping Campaigns.

22

Google Shopping Campaigns are an increasingly critical source of revenue for e-commerce leaders. When a consumer types in “running shoes,” for example, images, along with pricing, product ratings, location detail, inventory status, and a link to the product on the advertiser’s site matching the search are prominently displayed.

Page 3: 4 Ways Advertisers Can Win at Google Shopping

3

Google’s top 20 paid search advertisers have embraced this format, allocating 63 percent of their marketing budgets to Google PLA campaigns in 2014 (Leichenko, 2014). As more and more retailers have recognized the opportunity that lies in

implementing a successful Google Shopping program, the competition to place prominently in these results is growing.

Retailers keep their physical goods in a warehouse, but how does Google know which product to serve when a search query is submitted? Every retailer that utilizes Google Shopping has a Google Merchant Center account that contains a product feed. Retailers include product information such as Brands, Conditions, Prices, SKUs, Image URLs and other vital details. The more organized and robust the data is in a product feed, the easier Google will be able to serve the right product based on the query. Having an organized and compliant feed is only half the story.

While each advertiser’s product feeds are unique based on their own inventory, they all are subject to the same auction managed through Google’s proprietary algorithms. The vast amounts of product data, complex campaign structures, and ever changing bidding landscape make succeeding in this channel even more challenging for marketers. Conventional bidding processes, often involving manual bids placed once a day or less, are woefully inadequate as the bid decision landscape grows faster, more demanding and more complex. As a result, advertisers often find they are overbidding for clicks when customers aren’t purchasing, or under bidding in the auction and losing the opportunity to win a customer entirely.

This white paper focuses on how retailers can effectively manage their Google Shopping campaigns using Predictive Search Bidding. Using this next-generation bidding technology, retailers can now calculate values, assign bids, and reiterate multiple times per hour to surpass performance goals and reduce inefficient spend.

Page 4: 4 Ways Advertisers Can Win at Google Shopping

4

Google Shopping Overview

Google Shopping campaigns are a powerful and effective Search Engine Marketing tool that delivers multiple product choices to searchers from a single query. Setting up campaigns requires both a Google AdWords (Shopping Campaigns) and a Google Merchant Center (inventory data) account.

Within Google AdWords, marketers:

• Set specific budgets at the Campaign level;

• Assign Shopping Campaign priorities(High/Medium/Low);

• Divide products into Ad Groups;

• Segment their inventory further into Product Groups, and

• Assign bids by each sub-division of their Product Groups.

Shopping Campaigns in AdWords are connected to a Merchant Center account and use the product feed as a framework to construct Campaigns, Ad Groups and Product Groups.

One of the primary differences between traditional Search Campaigns and Shopping Campaigns are the absence of Quality Score and Average Position metrics. It is widely believed that Google’s algorithms assess the quality of data by individual product in the feed and the corresponding bid in AdWords to decide what products are served after a query is submitted through the Search Engine.

Without an explicit Quality Score and Average Position, it makes it even more challenging for marketers to understand how Google ranks competing retailers’ Shopping ads. This leads to the question of how to calculate bids appropriately in relation to the value that each click represents.

Page 5: 4 Ways Advertisers Can Win at Google Shopping

5

Competition Creates Obstacles for Advertisers

Google Shopping has become increasingly popular since the concept initially launched and has naturally created obstacles for advertisers. The rising participation in the channel has sent branded and non-branded CPC rates soaring as advertisers realized the value of product ads in comparison to text ads. Additionally, maintaining a high-quality product feed is no longer an option, but a requirement.

The good news is that the market isn’t saturated yet for advertisers wanting to tap into Google Shopping (Hoff, 2015). However, retailers will need every advantage they can get in order to cut through the growing field of equally keen participants and manage their Google Shopping programs at scale.

Miscalculated or stale bids can potentially cause advertisers to overpay for clicks during times when success metrics are not at their peak or miss out on opportunities because bids are too low to be considered in an auction. Manually responding to changes can help advertisers be more proactive, but it isn’t the most efficient or effective option.

Predictive Search Bidding offers a solution for online retailers looking to improve their Google Shopping performance by efficiently managing spend and exposing conversion opportunities when they are present.

BID

Challenges of Google Shopping

Advertisers have been dedicating a larger share of their budget to Google Shopping campaigns as compared to traditional text ads, but at what cost? In the early days, retailers were not as fierce when it came to capturing a larger portion of the market. If you had an organized inventory feed and a decent budget, you hadn’t a worry. Now, managing all aspects within Google AdWords (i.e. campaign structure, campaign priority, mobile/geographic/audience bidding adjustments, competitive bids) and Google Merchant Center are necessary for success.

Calculating and assigning bids based on daily or weekly averages can reduce management time, but this strategy can be detrimental in a highly competitive

Page 6: 4 Ways Advertisers Can Win at Google Shopping

6

channel such as Google Shopping. One of the issues with daily or weekly bid placements is not accounting for intra-day market fluctuations. Retailers that aren’t aggressively bidding around the clock aren’t maximizing their budgets, as this approach assumes a relatively static auction landscape and steady conversions throughout the day.

Customer intent can vary when considering the time of day and day of week, especially during seasonal periods. This demand can cause conversion rates during specific periods of time to vary as much as 20 percent compared to daily averages. Fluctuating demand on an hourly basis can impact ROI, forcing advertisers to spend inefficiently during poorer performing hours.

Retailers can maximize their performance during peak hours by being more responsive to changes in the auction by adjusting bids quickly and appropriately. However, manually adjusting hundreds, or even thousands, of bids every few minutes is virtually impossible for even the best Search Marketing professional. Predictive Search Bidding is both a solution and strategy for placing the best bids throughout the day, so retailers can spend less time worrying about their bid decisions and more time developing strategies to their further their programs.

Tapping into Intra-day OpportunitiesAll advertisers expect Google Shopping campaigns to maximize a specific KPI such as Margin, ROI or Cost/Order. Luckily, Predictive Search Bidding gives retailers a competitive edge in an increasingly volatile auction landscape. Shopping Campaigns that have numerous subdivisions of their product feed need to take action on a massive scale to achieve their goals. However, there’s a lot more to Predictive Search Bidding than simply setting bids. The best Predictive Search Bidding platforms interpret large sets of data, calculate values and place bids quickly, make decisions on limited data, and are scalable so advertisers can run the most efficient campaigns possible.

With the various challenges related to bidding and campaign management, there are also solutions to those problems to streamline the process and exceed performance goals.

Page 7: 4 Ways Advertisers Can Win at Google Shopping

7

4 KEY WAYS ADVERTISERS CAN WIN AT GOOGLE SHOPPING CAMPAIGNS

Multi-Dimensional, Predictive Data Modeling

It’s surprising to think how much value a single click can add to a company’s bottom line. Tracking clicks comes with the territory of any pay-per-click campaign, from Google AdWords text ads to Google Shopping ads. However, accurately calculating a click’s future value is another monumental task. Determining the best bids around the clock starts by parsing extremely large volumes of data that consider the hour of day, day of week, device, and other available dimensions.

The reality is that manually monitoring every click 24 hours a day isn’t realistic or efficient. Not to mention, human error can result in inaccurate valuations resulting in overpaying for clicks or missing out on conversion opportunities. Predictive Search Bidding utilizes sophisticated algorithms and Bayesian statistics to determine a click’s value and what bid should be placed at specific moments in time, even with sparse data.

Evaluating the value of a click using the right mix of recent data in conjunction with historical data will give advertisers the best guidance on their current bids. Constant re-evaluation of these values enable advertisers to adapt to changes in the landscape faster than others, providing another huge advantage compared to less sophisticated methods of bid management.

Automated, High-Frequency Bidding

Advertisers who aren’t using Predictive Search Bidding typically place bids once a day using daily or weekly averages to make their decisions. Not surprisingly, this basic approach results in missed opportunities due to changes in the auction landscape.

High-frequency bidding is a core component of Predictive Search Bidding that enables advertisers to automatically adjust bids throughout the day. Calculating and placing the correct bid at a specific time of the day results in advertisers paying

Page 8: 4 Ways Advertisers Can Win at Google Shopping

8

the right price for clicks commensurate with their value. High-frequency bidding is necessary for advertisers that require faster responsiveness to changes in the market and placement of smarter bids more frequently.

Advertisers that employ high-frequency bidding typically realize a 10-20 percent uplift in their campaign performance ([24]7, 2015). These results are not achieved by just bidding more frequently, but by leveraging all available data to discover the optimal bid levels based on specific time of day and day of week segments. This ability enhances Google Shopping campaigns across every vertical, as high-frequency bidding can inform retailers when it’s time to invest or to be conservative. This way, advertisers can avoid squandering budgets during non-peak hours, or overpaying during the best bidding times of the day.

{

Long Tail Optimization

Advertisers have been given more flexibility in how they structure their campaigns with the evolution from the now retired Product Listing Ad campaigns framework. With these new capabilities come new challenges in how campaigns are structured and how to effectively value and place bids on sparse data.

Understanding that advertisers can have unique configurations to better serve searchers is key in developing strategies using Predictive Search Bidding. Similar to traditional keywords that do not consistently receive clicks or conversions, opportunities can be hidden within granular subdivisions of Shopping Campaigns that do not consistently receive clicks or conversions. The ability to capture data, assign a value, and retest in shorter durations of time helps to unlock the potential of the long tail within Shopping Campaigns. Advertisers that tap into these long tail opportunities can expose deficiencies among their competitors and as a result be more efficient in capturing once unrealized conversions.

Modern, Highly Scalable Architecture

Although these individual solutions can put advertisers on the fast track to successful campaigns, integrating all of these features can be a daunting task. The overall solution lies within a highly modernized and scalable platform that has the capability to process millions of bids around the clock. With that said, many

Page 9: 4 Ways Advertisers Can Win at Google Shopping

9

advertisers are still using legacy bidding tools that were built when placing a single bid a day was enough.

While these tools can be useful for some advertisers, they do not have the capacity to calculate and assign bids with the high level of responsiveness required for intraday changes in auction landscapes.

Being responsive to changes in the competitive landscape by creating accurate predictions to bid the right amount at the right time will be necessary in managing successful Google Shopping campaigns.

Learn More About Predictive Search Bidding The Google Shopping landscape is constantly evolving, and it’s critical to leverage every element possible to beat the competition. To learn more about Predictive Search Bidding and how it can help your program achieve its goals, contact [24]7 today.

References]24]7. (2015, January 27). High-Frequency Bidding Explained. http://www.slideshare.net/campanja/

highfrequency-bidding-explained.

Google Shopping Ads Score Big With Retailers. (2015, January 27). http://www.forbes.com/sites/

roberthof/2015/01/27/google-shopping-ads-score-big-with-retailers/#2715e4857a0b7a344ed41018.

Leichenko, J. (2014, August 11). Paid Search Advertisers Spent 63 percent of Budget on Product

Listing Ads: http://www.adgooroo.com/resources/blog/top-paid-search-advertisers-spent-63-of-

budget-on-product-listing-ads/#sthash.X2xA8SXm.dpuf.

Page 10: 4 Ways Advertisers Can Win at Google Shopping

www.247-inc.com

US Headquarters: +1 650.385.2247 Canada Office: 1 866.454.0084 UK Office: +44 0 207 836 9203 APAC Office: +61 2 9004785

[email protected]

About [24]7

[24]7 is redefining the way that companies interact with consumers. The company’s customer engagement platform assists several hundred million visitors across all channels, and engages in 1.5 billion conversations annually, most of which are automated.

Using [24]7 solutions, many of the world’s largest and most recognizable brands are anticipating and acting on consumer intent to create more personalized customer experiences. This shift to an intent-driven engagement strategy results in an order of magnitude improvement in digital adoption, customer satisfaction, and revenue growth.

For more information, visit: http://www.247-inc.com.

1605WP4Ways©2016 24/7 Customer, Inc. All rights reserved.