Within a short time, Google Shopping has become an important advertising channel for many online retailers. The question is: what is the best way to manage and set up these types of campaigns? Insights into these matters are still limited, especially compared to the management of text ads, which have been around for a long time. In this article we will list several strategies that we have encountered in practice, including their advantages and disadvantages. We will discuss the following strategies:

1. simple set-up
2. subdivision into product groups
3. subdivision into ads
4. bid baskets
5. reactive-proactive prioritization
6. long tail – mid tail – short tail prioritization
7. one product = one ad

1. Simple set-up

If you create a Google Shopping campaign, the first step is to fill the Google Merchant Centre. To do so, you need to provide Google with a feed. For many people, filling the Merchant Centre is already a challenge in itself. We won’t discuss this any further here, on Google you can find https://support.google.com/merchants/answer/188494?hl=nl  on how to do this.

Once the feed has been delivered to the Merchant Centre, you can start creating ad groups for Google Shopping. Unlike Google Adwords text ads, you don’t have to specify keywords. However, you do have to indicate for each ad which products are advertised. Google automatically matches which products will be displayed for which searches.

Advantage of simple set-up

The simplest set-up is to simultaneously advertise all products from the Merchant Centre in a single ad group. The biggest advantage of a simple set-up is the simplicity and speed with which you can set up a Shopping campaign.
In practice, we see a lot of these types of Shopping campaigns. Once people have managed to overcome the hurdle of creating a Merchant Centre, they seem to be happy with just one ad to get results. In many cases these results are actually not too bad, so why optimize the set-up of your campaigns any further?

Disadvantage of simple set-up

A big disadvantage of this method is that it’s hard to accurately control your costs in the long run. After all, if you have only one ad you can only make one bid as well. You can’t set separate bids at the product level, like with keywords in text ads. You also can’t specify the results that you see. You can’t place higher bids for better-performing campaign elements or lower bids for campaign elements that don’t perform as well. Google offers a solution for this problem: you can further subdivide your campaigns into advertisements and product groups.

 

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2. Subdivision into product groups

If you have created an ad, you can cluster products in product groups or partitions within that ad. Google offers you the possibility to create groups of products based on:

• brands
• product types
• categories
• item IDs
• custom labels

All of these characteristics are specified in the feed that is sent to the Merchant Centre. If you choose to create product groups per brand, for example, each brand will get its own product group. Let’s assume that you create product groups based on the brands of products. For each of these brands you can then make another set of subgroups. You could create a separate product group for each individual product (item ID), for instance.

If you want to make a subdivision based on cheap or expensive products – just to name an example – then that’s possible too. You can do so by using custom labels, which you can specify via the feed itself in the Merchant Centre.

Advantage of subdivision into product groups

The big advantage of creating subdivisions compared to the ‘simple set-up’ is that you can see in much more detail how well a certain part of your product selection is doing in Google Shopping. Based on this information you can also adjust your bids, which makes a more advanced bid management possible.

Disadvantage of subdivision into product groups

The disadvantage is that a single ad always includes several products. In Google you can’t see which individual product level is performing better or worse, and which products you should optimize.

With the subdivision technique you can solve this problem by including all products (item IDs) as a product group in an ad at the lowest level. This will give you insight into how each individual product performs. The disadvantage of this approach is that it’s a lot of work to create all of these subdivisions and that you have to continuously update your products at the level of the item ID. This doesn’t happen automatically. If new products are added to the collection, they won’t automatically be made into a separate product group. Campaign automation can solve this problem.

However, even if you always keep sight of all of your products (item IDs) at the lowest level, you still won’t get all of the information. You can’t really see which keywords were shown for which products, for instance. In Google you can see for each ad group via which keyword people have landed on your website, but not in combination with which product.

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3. Subdivision into ads

Insight into which products were displayed in combination with which terms can be improved by not including all products in a single ad group, but by creating several ad groups instead. You could, for instance, create one ad group per brand.

Advantage of subdivision into ads

The advantage of using more than one ad is that you will gain insight into how well specific keywords in a certain product group perform. Based on that information you can exclude more specifically the keywords for which you no longer want your products to be shown. If you have only one ad group for all products and exclude a certain word, none of your products will be shown for that keyword from that moment on. By splitting up your campaign into several ad groups, you can exclude keywords in a much more sophisticated way.

Disadvantage of subdivision into ads

The disadvantage of this technique is that often several products are included within a single ad. Then it still isn’t clear which keyword has led to which product display. Of course you can create a subdivision at the level of item IDs by creating a product group per item ID within an ad. However, just as in the case of a subdivision in partitions, you will still lack an understanding of the performance of keywords per product and not all of the products will be displayed up to date in your ads.

A solution to gain insight into the performance of your keywords per product is to put every product in its own ad group. You can read more about it in the section about the 1 product = 1 ad strategy

4. Bid baskets

Advertising in Google Shopping is based on products. SEA campaign managers tend to think in terms of keywords, though. Therefore, campaign managers are looking for opportunities to gain greater control over the keywords at which their products are displayed in Google Shopping. First and foremost they would like to be able to set bids at the keyword level. Normally this is impossible in Google Shopping. You can only set bids at the product level and will just have to wait and see which keywords will trigger that specific product in Google.

One way to be able to set bids at the keyword level after all, is by creating ‘bid baskets’. You make a series of ‘baskets’, with each basket containing all of your products. Suppose, for instance, that you create 10 baskets by creating 10 ad groups. For the highest ad group you set a bid of € 1.00, for the next baskets you set bids of € 0.90, € 0.80 etc. all the way down to € 0.10. Now you can adjust the bids at the keyword level by adding keyword negatives. Suppose, for instance, that you think a bid of € 1.00 is too much for a certain keyword, then you include this keyword as negative in your highest bid basket. Therefore, your maximum bid will be € 0.90. If you make the keyword negative in the baskets of € 1.00 through € 0.60, your maximum bid will be € 0.50. You can increase your bid for that keyword again by removing the negatives.

Advantage of bid management

The bidmanagement method allows you to manage your bids at the keyword level. Keywords are often better predictors of what a click is worth than products.

Disadvantage maintenance intensive

The method is very maintenance intensive. You must continuously manage your bids at multiple levels by using keyword negatives. In addition, you don’t have the freedom to make any bid that you want unless you create an enormous amounts of bid baskets. To make a bid to the penny between € 0.01 and € 20.00, for instance, you would need 2,000 bid baskets. That makes things even more complex.

5. Reactive and proactive prioritization

Google offers you the possibility to prioritize your Shopping campaigns. You can give your campaigns low, medium or high priority. Google will give precedence to campaigns and products that have the highest priority. They will be shown even if the bid is lower than that of other relevant products in other campaigns with a lower priority.

Google recommends the following set-up:goudenei-295x295

  1. Start by including all of your products in one campaign. Give this campaign low priority. This campaign will serve as a basis for your ‘standard’ displays.
  1. Now you can create a second campaign that includes your best sellers. Thus, products that sell well will get more attention with regard to non-specific long tail searches, but also for more generic keywords. The campaign with medium priority is the reactive strategy. Reactive in the sense that you respond based on your past sales performance.
  1. Finally, campaigns can be set on the basis of seasonality. This means that you proactively include the products that are expected to sell well in a certain period. Examples are festive dresses at Christmas time or items that are on special offer. Google recommends the use of a retail  calendar to base your proactive promotions on.

Advantage of reactive and proactive prioritization

The Merchant Centre often contains a very large amount of products, which makes it difficult to keep track of the campaign as a whole. The advantage of reactive and proactive prioritization is that you put the emphasis of your campaigns on elements that perform well. In addition, all of your products are always covered by the campaign with low priority. This method also forces you to think about which products are doing well or are expected to do well.

Disadvantage of reactive and proactive prioritization

The first question is how to indicate the prioritization in your feed. This can be done by using labels. However, you still have to enter the values of these labels in your feed. This means that these values must be included in the source of your data. For many advertisers this is both a practical and technical obstacle.

In addition, you may ask yourself if you really want to advertise your best sellers. In some sectors, the best sellers sell out first and you may want to focus on selling products that don’t do so well. Also, your best selling products aren’t necessarily the products that lure people to your store to begin with. Finally, your ads aren’t managed at the keyword level. At what keywords your products will be displayed, is still mostly up to Google.

6. Long tail – mid tail – short tail prioritization

The long tail – mid tail – short tail prioritization strategy is also an approach that is more keyword oriented and offers the possibility to make specific bids at the keyword level. In this case, you use the prioritization possibility that is offered by Google.

With this prioritization strategy you can classify keywords in terms of long tail, mid tail and short tail keywords. Experience shows that specific – long tail – searches yield a better return than mid tail or short tail searches. In this set-up you give long tail terms the highest priority and add the short tail and mid tail keywords as negative. Conversely, you can also give the short tail the highest priority and include the long tail and mid tail as negative.

Advantage of prioritization strategy

The advantage of this strategy is that you can refine your bids based on the type of keywords. In addition, this method is easier to manage than the bid basket method. You also don’t have to make the same bid for all products. If you combine this strategy with product groups you can basically set a different bidding scale per product group for campaigns with high, medium or low priority.

Disadvantage of prioritization strategy

The disadvantage of this strategy in this case is that you have to add and keep track of keyword negatives. That’s a rather time consuming task. Another disadvantage is that you won’t know exactly which product was displayed at which keyword.

7. One product = one ad

This strategy takes the subdivision into ads a step further. In this case, you go so far as to place each product in a separate ad group. You have to watch out for products with product variations, though, such as products that are included in the product feed in different sizes or colours. In this strategy you can choose to include all product variations in one ad group.mandje-295x188

Advantage of one product = one ad strategy

You make a separate ad for each product. This allows you to see exactly how well a product performs at which keywords. You can achieve maximum optimization. You’ll also have the possibility to determine which product will show up at a certain keyword. By including the keyword as negative for other products you basically push your preferred product to the front.

Disadvantage of one product = one ad strategy

This method is very labour intensive when it comes to creating campaigns. In addition, you can easily lose track of keywords. The same keyword may be included in many ad groups.

A Columbus’ egg?

In this article a number of Shopping strategies were discussed. It is possible to combine some of these strategies. One strategy doesn’t necessarily exclude the other. What is the best strategy to use in a certain situation is still an issue that is being explored extensively in the market. It can already be concluded, though, that strategies with a high level of detail offer you more possibilities for control, but creating and managing these campaigns is much more complex as well.