This article is sponsored by Adchieve. The opinions expressed in this article are those of the initiator.
Smart Shopping campaigns in Google Ads provide many advantages for attracting advertisers, especially those trying to manage product promotions on a large scale.
This is a format that uses your product feeds to display ads on the Google Search Network, Google Display Network, YouTube, Gmail and other platforms through automated bidding, testing, and ad placement, and let Google’s machine learning serve you.
It can help simplify and simplify event management-that’s for sure.
But letting machine learning do the heavy lifting also has its potential disadvantages.
For marketers, smart shopping may be a data “black box”.
How can you use the different types of data available to better influence the results of this machine-assisted automation?
Once you understand the input and output of that black box better, you can modify the input more effectively.
In this article, you will learn how to do this.
Read on and we will explain how you can use the comprehensive insights gained from different types of data to better match your business goals, drive the best return on investment, and really drive product sales.
The unprecedented importance of data science
Before discovering insights, you must first understand the differences between different types of data.
Google data: The data you return from Google
Although Google discloses less data than ever before, you can still use a lot of important information. Think about conversions, costs, impressions, etc.
Company Information: Company-specific data indicating which KPIs or factors you care about
Company data is data that you own. Think about insights into profit margins, inventory data, and various customer data.
Competitive data: data about what is happening in your market
The third data source is data about the market in which you are active.
- Are you ahead or behind your competitors?
- What is the price of your competitors? What products do they offer?
- What keywords are they ranking for and you don’t?
Now, let us move towards insight.
4 examples: how to turn data into insights can keep you one step ahead
Different types of data are needed to derive valuable insights.
Sometimes this involves the insights you only need from one data source, but we think you can find the best insights when you combine Google, company, and competitive data.
Here are some examples of insights you can now use Adchieve to build to optimize your Smart Shopping campaigns:
- Understand the profitability of events (POAS).
- Insight into cross-selling and up-selling models.
- Gain insight into price and its importance to ranking.
- Gain insights into keywords in Smart Shopping campaigns.
1. POAS insights
In our understanding of the Google Shopping algorithm, we want to know whether ROAS is a good goal. ROAS is just a ratio that has nothing to do with your profitability.
What is the ideal ROAS to achieve maximum and healthy profit and turnover? Should the ROAS goals for each product in your Shopping campaign be the same?
This is why more and more advertisers are now using POAS (Profit On Ad Spent) insights.
You used to only manage ROAS revenue. Now we can automatically gain insights into profits by combining Google data (cost data) with company data (profit margin).
The following proves that a good ROAS is not necessarily a good POAS:
Source: Adchive
Read more about the operation and benefits of POAS in this Adchieve article, Google Ads: Why choose POAS goals instead of ROAS.
2. Cross-selling and up-selling insights
When developing POAS insights, we also realized that advertising on product A does not always mean that you also sell product A. It is also possible that in addition to A, you also sell product B or not sell product A at all, but only product C.
This is why we developed a product advertising contribution model, the central message of which is that product A’s advertising does not always lead to (only) product A sales.
The following is a description of the product advertising contribution model:
Source: Adchive
This is important when calculating your profit margin.
The profit margin of product C may be very different from that of product A, and the upsell of product B may also be interesting from the point of view of profit margin technology.
3. The impact of price on ranking
Will your price affect your Google ranking? We want to know if this statement is factual or fictitious, so we started investigating.
For a large retailer in the UK, we adjusted the retail prices of a random set of products over a period of four months. These products belong to one of the five price ranges near the benchmark price quoted by Google. For example, the price is 15% cheaper one week and 5% more expensive the next week.
We consider the changes in the benchmark itself, and for each product, randomly determine the product’s price range for the current week. You can see the result in the image below.
impression
Exchange rateSource: Adchive
We saw a noticeable tapering effect in the print. The product group with the most discounts has the most product impressions and the most clicks.
Conversely, the products with the most price increases show the least number of clicks. When you’re cheaper, Google will show you more, but the difference in conversion rates is much greater than the number of impressions. So the price is very important.
By in-depth understanding of competitors’ prices in Google Shopping, we can provide a more precise picture.
4. Keyword Insight
We recently developed a tool that uses crawling to structure and automatically collect search term data to generate insights at the keyword level.
This crawl data can help you understand what’s happening in Smart Shopping. You can see performance at the following keyword levels:
- Adjustment of return on ad spend.
- Changes in your price proposition.
- The effect of product rating improvements.
- Title adjustment.
- The impact of new products on your ranking.
Luqom Group, Europe’s largest online lighting supplier, also uses our functions. Using the keyword data returned, they can immediately optimize their campaigns or see the effects of adjustments.
This data is also strategically important because it allows them to closely monitor their position in the competition (we call it “market share”). It also tells Luqom which products are popular on Google Shopping and which online stores are not yet within its scope.
Source: Adchive
Learn more about the subject in this article: Keyword Insights for Google Smart Shopping is back.
Success factors for managing marketing activities in different ways
In addition to Luqom and major retailers in the UK, at Adchieve, we have also worked with other leading retailers in the past two years to study the success factors of applying surfing algorithms.
We have learned that four factors are important prerequisites.
Clarify your business goals
This seems to be a last word, but this approach is even more unruly. You want to focus on improving profit margins, but will this also come at the expense of turnover?
Or, for example, do you want to develop in a specific market without ignoring your turnover/market share?
Understanding your goals is not only important to articulate the direction you want to turn. It also affects what data you need and what structure you can best use during the event.
It goes beyond the marketing department
Anyone who wants to score on Google in the short or medium term should also consider their scope and the price charged. For category-related matters, the participation of the purchasing department or category management is required.
Do you want to learn more about your sales profit margin through Google? Then, you need the expertise of the finance department.
As a PPC manager or online marketer, you have less work on the Google interface and more work with colleagues (from other departments).
Be open to experimentation and learning-more than just taking direct action
PPC managers are accustomed to taking many actions, such as adjusting bids and keywords directly. You can use smart shopping to control fewer buttons.
Therefore, it has nothing to do with the number of operations you perform, but with the quality of these decisions. Which ROAS goals and activity structure will help you achieve your business goals?
The above requires you to accumulate new knowledge by keeping up with the development of the market, as well as by experimenting and learning by your own methods that are effective and ineffective in your situation.
Experiments don’t always produce actionable items, but they do produce interesting new insights that trigger new thinking—helping you get closer to your goals.
This also requires the commitment and participation of the middle and high levels of the organization. This person knows the business goals, can think about and guide cross-departmental actions, and can initiate experiments that the organization does not use or dare not try.
Put everything into practice with the right software
Finally, you are ready, and higher-level people in your organization will commit.
Using data-driven advertising automation software means you can act on your insights and manage your activities in different ways-not just for feed The black box, but in our words, is to “color the black box.”
What insight will you have?
Some examples:
- You can make substantial changes to the ROAS of your campaign.
- You can predict the impact of ROAS adjustments on your revenue and profit margins
- Based on your keyword insights, you can estimate how much space is left to gain positions on important search terms.
- You can gain insight into your content and its ranking.
- You can see what content your competitors use (headlines and images) and whether they rank higher in them. Based on this, you can make substantial adjustments to your content.
- What is your ideal price? At what prices do you have the highest profit margin, but also the highest ranking in Google? Combine your cross-selling and up-selling insights and keyword data, and you can draw interesting conclusions.
Finally, if you could even influence your product range, how good would it be?
Based on the insights we provided through Adchieve, Luqom expanded the scope of one of the labels by 50%.
Is the data in your mind? Subscribe to our newsletter to read the latest research from our data scientists and new data-driven insights that we regularly implement in the software. Continuously improve your advertising campaigns and subscribe.
Featured image: Shutterstock/fatmawati achmad zaenuri
