• Shopping Bidding Strategies

Google Shopping Bidding Strategies: The Ultimate 2020 Guide!

Despite Google Shopping being user-friendly and providing lots of tools to help you out, some of the concepts can be harder to grasp. For instance, how to automate your bids to change when you’re not online.

How important is the location of bidding? What’s important to keep in mind while choosing a bidding strategy? What’s the difference between automated and manual bidding? It’s crucial for every business owner to know about multiple options Google provides to enhance their e-Shop’s performance.

One of the most important features of Google Ads is Bidding Strategies.

Not only do they put you in a place of auction, they make use of your budget as effective as possible. Bidding strategies are the function behind financing and targeting your ads. Most business owners opt for automated bidding provided by Google. Why? It’s easy and you don’t have to adjust the price and target for every campaign.

Even though Google might take care of everything for you, it does not have to always be what you’re looking for. Maybe you want to be in control of something. Not sure what you prefer? Don’t worry, this article covers everything you need to know!

What are bidding in strategies in Google Ads?

As mentioned before, bidding puts you in a place of auction. It means your ads appear in auction whenever there’s an ad space available across Google and Google Network.

The process is quite simple.

  • Google responds to the search query with relevant results
  • Narrows results down
  • Removes irrelevant ads to the search query/ads that don’t provide a good user experience
  • Puts the chosen ads in the order they appear
  • Ads are shown
  • Repeat

Since Google is searching for the best match, it looks at the target of your bidding as well. Whenever you want to appear through Display Network or just as a search result, Google puts your ads in the category they belong to. Therefore, investing your time into really understanding different strategies and how they can enhance the campaign’s performance is very beneficial in reaching your goals.

There are 3 types of bidding: Manual, Semi-Automated and Fully-Automated.

What you should definitely know beforehand is what exactly do you want to target in your campaigns. The strategy you use depends on what you’re aiming for.

Most advertisers focus on clicks, impression/engagement, conversions or views. Sometimes it’s better to do all the adjustments yourself and other times the best way is to automate your bids.

Let’s take a closer look at what these strategies offer and what is their main target.

Manual bidding strategies

Manual CPC

Is your main goal to get people to visit your website? Then cost-per-click, also known as CPC, is your go-to. With this bidding, you’ll only pay when someone actually visits (therefore, clicks) your website.

Manual CPC provides you with a set up of max CPC, which is the price you’re willing to pay for a click.

You’re able to set different bids for:

  • Multiple ad groups
  • Individual keywords
  • Placements

When you find out some of the keywords or placements are more profitable, you can easily bid more on those allocations to bring you a wider audience.

Advantages and Disadvantages

Advantages

  • Little to no conversion data
    Usually new campaigns with automated bidding require you to have at least some conversion data in an expected amount of time. Manual CPC does not.

  • Can target exactly what you want
    Sometimes smart bidding strategies just can’t fulfill the target you set. This bidding strategy lets you adjust your target however you want it.

  • Full control over your bids
    You don’t have to put your bids into the hands of Google. You gain full control over what you are bidding on and how often you change it. Obviously, this only applies to when you’re not using Enhanced CPC.

Disadvantages

  • Manual
    You have to set up everything yourself. Therefore, every little change you want to make has to be precisely adjusted by you. All the time.

  • Experience
    Since this strategy is manual, you have to be experienced and know what you’re doing. Which means you have to know how to optimize your bids according to the performance. It might be difficult to people who are only starting out with Google Ads.

  • Time-consuming
    Obviously, it takes a lot of time. You might spend hours just adjusting everything to fulfill your requirements. That’s why business owners usually add Enhanced CPC to have more time for further development of their campaigns.

Semi-automated bidding strategies

Manual CPC with enhanced CPC

Manual and Enhanced CPC (ECPC) is a combination of Manual and Smart Bidding strategy. This function automatically adjusts manual bids for clicks that seem the most profitable. What does it mean?

If Google sees that some of the keywords you’ve included seem like a lead to a sale, ECPC raises your bids automatically. If the keywords have a lower performance rate, it lowers your bid.

This could strategy can:

  • Raise click-through rate (CTR)

  • Conversion rate (CVR)

However, be careful since ECPC can increase CPC rate. Which would mean it stops being profitable for the business. You could pay more for your ad than retreat from it.

Manual CPC with automated rules setup

Expect the rates of sales to change while you’re not online. Obviously, they do. Therefore, you can set up rules that change your bid automatically according to trends or your own preference.

The rules at the keyword level

  • Raise Bids to top of page CPC when
  • Change Max CPC bids when
  • Raise bids to first page CPC when
  • Pause keywords when
  • Enable keywords when

This makes it easier to optimize your bids when you’re not able to. You can also control frequency, which keywords it applies to, requirements and so on. If you want to know more about automated rules, you can read about it on the google support page.

Fully-automated bidding strategies

Maximize clicks

This Smart Bidding strategy automatically sets your bids to help you get as many clicks as possible with your daily budget. Google Ads uses the remaining average daily budget to push your ads through. With this function, you can also set up times and dates when your products/portfolio will be promoted.

Its goal is to bring as many visitors as possible. Whether you want to get your name out there or promote a special sale, Maximize clicks could help you reach a wider audience.

Be smart about it though. Always check your average max CPC since Google will try to spend your budget on getting clicks. It doesn’t matter that they could be more expensive.

Target return on ad spend (ROAS)

Do you want to target return on ad spend? ROAS automatically optimizes your bids at auction-time, which means you can tailor them for each auction. It predicts future conversions and values of your campaign based on your historical data.

With ROAS you can set bid limits as well to keep the algorithm from wandering further that you want to. However, keep in mind that adjustments like these can limit its performance and decision making as well.

The negative aspect of this strategy is that you have to have past conversions – or to achieve them in 30 days. Since ROAS work on historical data, you have to provide a source for it to work properly.

If this strategy caught your interest, you should have a look at Target ROAS and Automation in Google Ads.

Maximize conversion value

Do you want to spend your entire budget instead of a specific CPA? Maximize Conversions uses an advanced machine learning to automatically optimize your bids for auction-time. Maximize Conversion Value works on the same basis, however you can specify your budget.

How does it work? You define what value you want to maximize. It’s an auction-time bidding as well, which makes it able to tailor bids for each auction individually.

As ROAS, Maximize conversion and Maximize conversion value work on historical data they obtain from the report. But again, make sure to check your set price because Google will try to make the most out of this strategy even if you don’t want to.

There are more bidding strategies, such as; CPM (cost-per-thousand viewable impressions), Target Impression Share (ad appears on the top of the page), CPA (cost-per-action) or CPV (for videos only!). You can read about them more on our blog.

What do advertisers need to know about bidding?

Always make sure that the ads you put out are profitable! There is no point in having a campaign running, if there is no profit from it. Try to look deeper into what might be the issue. Maybe a different strategy would help you reach your goals.

While some advertisers can afford to sell at break-even levels or make slight losses to win a new lifetime customer, most accounts will have to get profitable sales as soon as possible in order to keep a positive cash-flow.

What are the major aspects of Google Shopping campaigns?

  • Average CPC (cost per click)
  • Average CVR (cost per conversion)
  • Product price
  • Gross margin
  • AOV (average order value)

For example:
You are offering a product for 100€ with a 30% gross margin while converting 5% of your visitors on average. This means that your max CPC to break even should be 1.5€ (30€ gross margin x 5% CVR). However, if you know that people usually buy multiple items, which brings your average order value to 250€ instead of 100€ for a single product, then you can afford to bid more aggressively to a CPC level of up to 3.75€ (250€ x 30% gross margin = 75€ → 75€ x 5% CVR = 3.75€ max CPC to break even) and outbid competitors on the product level. Why? Because you understand the economics of your e-commerce store.

If you are not there yet, you should sit down, go through your finance and digital marketing statics and figure out the average order value for your entire store, as well as for different product categories.

Importance of negative keywords in Shopping ads

While in search ads you can use keywords to show Google what to bid on, in Shopping ads you need to tell Google what NOT to bid on.

It’s of the utmost importance to understand how negative keywords work and how they can be used to exclude searches all together or use them to sculpt the traffic into specific campaigns.

What are negative keywords?

It’s a way of showing Google what words should not trigger your ads.

Let’s say, you own a flower shop with only fresh flowers. You set up your campaign to target the word “flower,” however your ad will come up regardless of the type of flower. If you set “artificial” as a negative keyword, Google will recognize that your ad shouldn’t show up upon searching “artificial flowers.”

Always use negative keywords in your campaigns. Why? Because without them, you could lose money for ads that won’t give people what they want. However, don’t use too many of them since it could lower your traffic and visibility.

How match types affect negative keywords?

Keywords match types overlook which keywords can trigger your ad on Google. Therefore, you should be precise to set your negative keywords correctly.

There are 3 match types you can use:

  • Negative broad
    This is the default type of negative keywords. If the search query contains all of your keywords, your ad will not show up. It doesn’t matter what order you chose for your keywords as long as the query contains your keywords. However, if only one keyword is relevant to the search, your ad will still show up in the results.

Example
Keyword: summer dress

long yellow dress ✅ will show up
summer top ✅ will show up
summer dress ❌ won’t show up
  • Negative phrase
    Your ad will not show up if the phrase searched perfectly matches your keyword phrase. Although, if the search query includes an extra word to your negative keyword, your ad might still show up in the results.

Example
Keyword: wooden table

glass table ✅ will show up
wooden tabletop ✅ will show up
black wooden table ❌ won’t show up
  • Negative exact
    There cannot be any extra words included in the search, the query has to be exactly the same as your keyword.

Example
Keyword: [high heels]

red 10cm heels ✅ will show up
high heels with ankle strap ✅ will show up
high heels ❌ won’t show up

How to add negative keywords on campaign and ad group levels

Individual negative keywords

  1. Keywords and Targeting > Keywords, Negative
  2. Add negative keyword – choose between Ad group negative keyword or Campaign negative keyword
  3. Select location for your negative keyword and click OK
  4. Write your negative keyword in the edit panel.

Multiple negative keywords

  1. Keywords and Targeting > Keywords, Negative
  2. Make multiple changes
  3. Click My data includes columns for campaigns and/or ad groups or you can use Use selected destinations
  4. Type in your negative keywords (or you can paste them from your list)
  5. Click Process
  6. Finish and review changes
  7. Go over your changes and make sure everything is correct. If you are ready to add your pending changes, click Keep. If you don’t want to, click Reject.

How to unlock the full performance of your shopping ads with advanced bidding strategies

Granular campaign structure

Yes, it’s very important to understand the available bidding strategies. However, advertisers still need to ensure their campaigns are set up perfectly. To make it more clear, granular setup is necessary – for different product categories or individual SKUs to be separated into individual product groups or their own campaigns.

Once you have enough data (impression, clicks, conversions) to justify the granular campaign setup, advertisers should set up 3 campaign types for each product group they advertise:

  • Generic – non-branded & non-product specific searches: example → running shoes
  • Branded – non-product specific searches: example → buy nike running shoes
  • Product-specific searches: → buy Nike MX-720-818 Black shoes

This is the key to the power of any bidding strategy you decide to use for your Shopping ads. You’ll be able to start bidding and adjusting on a search query level.

If you use the right implementation of negative keywords, you’ll be able to filter search terms into different campaigns. Also, you can make sure to bid higher for search terms with high sales lead while also bidding lower for generic top-of-funnel search terms.

Custom labels

These attributes help you to create your own filters in reporting and bidding used in Shopping Campaigns. They’re never shown to customers, they monitor your bidding for you.

So if you want to section your products as seasonal or clearance, these labels will help you to report and bid on groups of products you choose. It gives you freedom while segmenting your biddings in your Product Listing Ads.

Custom labels are numbered 0-4:

  • custom_label_0
  • custom_label_1
  • custom_label_2
  • custom_label_3
  • custom_label_4

Use these attributes only for Shopping campaigns - Display campaigns use ads_labels with ads_grouping.

You can create up to five custom labels for each product with its own definition! Plus, you can customize them however you want. It is one of the few features where Google doesn’t dictate almost anything.

Why should you use them? It gives you independence and your feed is easier to work with! When you use custom labels, you can section your products and monitor search queries/their performance separately. Making it a lot easier to be oriented in your Google Sheet document.

Especially with bestselling, seasonal or on sale products, you could bid a lot more on them! Since you can see the report and control your bidding on ad group levels.

To wrap this up..

Bidding strategies are essential to every e-commerce business. The strategy you choose should be the one that is the most beneficial for your business. Don’t forget to look at your budget and decide on your target before you make your decision!

If you want to find out more about Google Ads and its features, feel free to browse our blog. BlueWinston also offers a variety of services for your e-Shop. To see how to work with labels in BlueWinston, check out this article!

About the Author:

Martin Jančo
Account manager at BlueWinston & CCS Shopping in EU (I'm the guy responsible for the most effective PPC tool to create product text and Smart Shopping campaigns for Google Search)