How Small Retailers Can Compete for Google Shopping Ads

If you’re a small retailer, you might have looked at PPC campaigns in the past, you might even have tried your hand at Google Shopping ads, or, like 56% of small retailers in the UK, you might not have tried either. Don’t fret. Google Advertising isn’t as scary, or expensive, as it sounds, especially when you know what you’re doing. Which is where Creative Insight comes in.

As with any pay-per-click (PPC) or advertising campaign, we have to understand the purpose in order to determine the strategy, before we get started.

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Adapting to digital shopper behaviour

We understand that our approach to customer marketing has to change when using shopping PPC ads rather than general text or search PPC ads and SEO campaigns. Although shopping ads have many benefits, such as reducing time to buy, they also cut out a lot of the traditional buying steps.

Customers who use shopping ads are more likely to be persuaded by the right product and right price, rather than brand loyalty. This means that, rather than focusing on user journey, the core elements of marketing must be addressed: product, price, promotion and place. To make this easier, we need to answer the following questions:

  • Which products make you stand out from the competition?
  • What types of shopper queries indicate high conversion potential?
  • Which words/phrases do people search for that could describe your products?
  • Where do your customers (real and potential) live, and what other areas have similar demographics?
  • How long is your conversion cycle? What is the optimum time frame to wait before retargeting someone?
  • What bid range is most efficient for your products?
  • How competitive are your prices?

Once we know the answers to these, we can start looking at which products to use for Google Shopping.

Don’t ignore the essentials

PPC is guaranteed to fail if you treat it as a single marketing tactic. PPC adverts should never work alone. Once someone clicks on your ad they will be taken to a landing page. How this landing page is designed and the content available will determine whether or not they decide to go further with their purchase.

Landing page experience can have a dramatic impact on the conversion rate, whether you use Google Shopping or text ads. Ensuring the purchase process is easy and by removing any barriers to purchase will help to increase your conversion rate.

Non-optimised landing pages will result in loss of visitors, risk losing potential sales and will damage the return on investment available through PPC.

So how do you compete with major retailers?

It is well known that major retailers have larger marketing budgets that allow them to swallow up the majority of user searches, however, Google Shopping still has a place for smaller retailers, but we have to advertise smarter.

To make your campaign smart and profitable, we will:

  • Focus on your niche or most popular product range
  • Segment the campaigns effectively e.g. based on gender, customer industry, product type
  • Use geo-targeting
  • Use RLSA (re-marketing lists for search ads) to effectively attract users based on their buying and search behaviour
  • Manage daily

Bids and strategies

Unlike standard Google AdWords campaigns, shopping ads require a lot more management to ensure you don’t bid too much, and the cost per click (CPC) remains within the budget.

To determine the maximum cost per click, we need to know the profit amount of each product. We then recommend setting your CPC to 30% of the profit amount.

But it’s not just about CPC. We have to understand your target CPA (cost per acquisition) too. Unfortunately for most, not every click will lead to a tangible sale, therefore we need to understand how many “wasted” clicks we can cater for in your budget, without damaging your overall profits, so making PPC a viable tactic to build your business.

According to CPCstrategy, the average click through rate (CTR) for Google Shopping in 2016 was 1.2% with just a 2.46% conversion rate. However, the amount you spend on your campaign will be highly dependent on the average CPC, conversion and click through rate for your specific industry. This will then determine how many clicks you need to get a conversion and the minimum that conversion should cost you.

Long term loyalty

shutterstock_634746527When we review PPC performance from AdWords or Google Shopping, it’s easy to look at the ROI within that period alone but this isn’t a true outcome of its success. For online retailers, the likelihood of a customer only purchasing one product from you in their lifetime, is very small. According to Statista, 80% of the online population have purchased something on the internet, with 50% of those buying regularly, buying more than one item.

By having someone click onto your PPC advert to buy, you have the opportunity to upsell and retain that customer on a long-term basis. The customer journey and opportunities that are displayed on your landing page will have a huge impact on whether that customer buys that one item, several items, or returns again for an additional purchase. This of course, makes the true ROI of your PPC campaign difficult to determine within a small period of time, which is where it is important to understand the average lifetime value of a customer. This can then help us to determine the targeted cost per acquisition and campaign success.

To find out whether Google Shopping is a viable and profitable sales solution for your business, or if you want to learn more about how Google advertising can boost sales, contact us on 0121 321 2828 or email studio@creativeinsight.co.uk.

 

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