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The 6-Step Google Shopping optimization process to improve ROAS and revenue

June 30, 2022

Guest blogsGooglePPCShopping campaignsEcommerce

Andrew Lolk, Founder & CEO at SavvyRevenue, shares how you get to achieve better performance for Google Shopping whether you run Performance Max (Smart Shopping) or Standard Shopping campaigns. Read everything about it in the article.

The 6-Step Google Shopping optimization process to improve ROAS and revenue

Most of the people I speak to look at their Performance Max or Standard Shopping setup and wonder what they can do to improve it.

You can’t control what keywords you show for. Audiences are limited. Negative keywords are misleading. Manual bidding is not fair. So what can you actually do to improve performance?

Improving Google Shopping, and much of Google Ads in today’s world is less about direct tactics and more about nudging the machine in the right direction.

There are three components to Google Shopping:

  1. The feed
  2. The campaign
  3. The data

Today, I will show you how to make changes to each component and get better performance for Google Shopping — regardless of whether you run Performance Max (Smart Shopping) or Standard Shopping campaigns.

It all starts with your feed, and it’s not as confusing as you might think.

1) Add missing attributes to your feed

Over the years, I have learned that feed optimization is an ambiguous word. It means a lot of different things, so I have distilled it down to two specific optimization tactics:

  1. Adding missing attributes
  2. Improving existing attributes

An attribute is often also called a field — it’s the titles, descriptions, product types, etc in your Google Shopping Feed.

Before you start optimizing certain parts of your feed, you need to add missing attributes. This is a step that most PPC managers miss in their work with feeds. They jump straight to optimizing titles (which is also important), but first, you need to get all the right attributes in the feed.

Here is a list of required and recommended attributes to add:

Blog Image 2 Table 6-step goolge shop optimization.png

Once you have added the relevant attributes, you should start optimizing the individual attributes — the first being your title.

2) Optimize your titles and others

Once you have added all relevant attributes, it’s time to optimize the most important ones in the following order:

  1. Titles
  2. Product type
  3. Custom labels
  4. Google product category
  5. Descriptions

We will review custom labels in the next section, but let’s first take a look at each attribute here.

Optimizing titles

Here’s a quick overview of how you can optimize titles:

  1. Add category and brand to the product title
  2. Add size, material, and other specifics
  3. Rewrite them manually if you HAVE to

Blog Image 1 6-step goolge shop optimization.png

Once you have finished titles and product types, you can proceed to apply custom labels.

Optimizing your entire feed is a topic in itself, and I recommend our article on Google Shopping feed management

3) Apply custom labels

A Custom Label is a way to group products together across brands and product types without adhering to any set list of values. An example is aggregating conversion rate data for all products on sale vs not on sale.

But you can do anything with custom labels. What we use custom labels for the most is to find performance outliers. Some of the custom labels we apply are:

  • Pricing tiers
  • Discount or not
  • Seasonality
  • Product score
  • Bestseller status
  • New vs existing product
  • In-stock status (across sizes, colors, etc)

Here’s a further explanation of each custom label:

Pricing tiers

  • Performance differences can often be found across pricing tiers. For some, it means that high-priced items have no immediate conversions, or that products under $10 aren’t profitable.

Discount or not

  • Discounted products often convert better because, well, they are discounted so their price is better and there is a sense of urgency.

Seasonality

  • Sandals, shorts, and summer dresses convert best when it’s summer, but can lie dormant most of the year.

Bestseller status

  • This has to be the number from your eCommerce platform. Just taking the numbers from Google Ads makes little sense — Google already has these.
  • Another important note is that you can’t take bestsellers from across your site as a whole. It has to be top 3-5-10 per category preferably.

New product vs existing

  • If you have strong products within existing categories, your new products might have difficulty taking over from existing products because of their historical data.
  • Another aspect is if you constantly add new products that Google tests out, you might see a lower ROAS/revenue without any benefit.

In-stock status (across sizes, colors, etc)

  • There is already an in-stock attribute, yes, but that’s solely for the individual product variant (product, color, size). This custom label should instead track when the bestselling product variants go out of stock — as in when size 7-10 in shoe size goes out of stock.
  • This is especially relevant for apparel, but also interior design products.

Private label products

  • eCommerce businesses usually want their private label products treated separately from the rest of the products.
  • If you only have one private label brand, then this is easy and doesn’t require the use of custom labels. If you have many, it becomes more cumbersome and custom labels can be useful.

Custom Labels can be applied in one of two places:

  1. Directly from your back-end
  2. In your feed optimization tool

Some of the values can be built using your feed optimization tool even if the data isn’t in there directly. Here’s a simple example of creating a custom label for whether a product is on sale or not:

  • If sale_price exists = set custom label “On Sale”
  • If sale_price not exists = set custom label “Not on Sale”

Once you have applied your first custom labels, you need to analyze the data and find product segments that are worth separating from your existing Google Shopping setup.

4) Find product segment outliers

I will start off by saying that it’s not always the case that there are performance differences across any of the product segments listed above.

But there are times when you should use them to:

  • Better allocate budget
  • Set dedicated ROAS targets
  • Follow up on individual performance

A typical use-case is bestsellers, but this has been talked about for years, so let’s take another example: New products vs existing products.

Let’s say you create this custom label, and find that you spend 95% of your budget on products that have been active on your eCommerce store for more than a year.

But your last year’s strategy has been to expand your product portfolio a lot, so you have actually added 25% more products to your eCommerce store. Spending 5% of your budget on your new products can indicate that:

  1. You have the wrong products
  2. Your new products are too similar to existing products
  3. Your ROAS target doesn’t allow new products to get launched

As PPC managers, we can’t do anything about A or B. What we can do is figure out if C) is a limiting factor. To do that, we need to segment the campaigns to change the budget and ROAS targets.

5) Segment your campaigns

Segmenting campaigns is a cornerstone tactic with Performance Max (and standard Google Shopping). With Performance Max, you don’t have many options to improve the campaign performance, but you should use the options that are available to you.

Two of the options to improve Performance Max are:

  1. Setting different ROAS targets
  2. Applying different budgets

You can use this for a couple of different scenarios:

  • Different product categories
  • Different brands (or Private Label brands)
  • Different product segments (with Custom Labels)

By combining campaign segmentation, you have options to create different campaign structures that you can use to nudge Google Shopping:

Create a campaign each for:

  1. Private label products with a low ROAS target
  2. “External” products with a high ROAS target

This will nudge Google Shopping to spend more money on private label products yet still maximize exposure for the external products you carry on your site.

Create a campaign each for:

  1. Spring/Summer collections
  2. Fall/Winter collections

This enables you to set higher budgets, lower ROAS targets, and overall tell Google it’s time to push the spring/summer products when the season starts — and lower the effort on fall/winter products.

The sky's the limit and the best way to segment your campaigns depends on your business.

6) Learn when to use Standard Shopping

Performance Max (Shopping only) is a great way to get started with a baseline Shopping campaign, but sometimes you need to use the standard Shopping campaigns to get the best results.

With Standard Shopping you get more insights and an ability to influence the performance:

  • Seasonality Bid Adjustments (will open up in the future)
  • Prioritize product segments over others
  • Search term visibility
  • Minimum and maximum bidding caps

This only applies if you actually have something that differentiates your products — and it can’t be directly correlated with the performance (revenue, ROAS, etc.) that you're experiencing right now. Because then Smart Bidding will take care of it for you.

Conclusion

Too many Google Shopping setups are created and left alone. Often advertisers, or agencies, will optimize a bit of the feed, change the ROAS target now and again, but mainly leave the campaigns alone.

That’s a mistake.

As outlined above, there are several ways to improve the performance of your Google Shopping campaigns, and if you feel overwhelmed, they can be narrowed down to a few key aspects:

  • Add missing attributes to your feed
  • Optimize core feed attributes
  • Apply and analyze custom labels
  • Segment your campaigns
  • Change to standard Shopping for options

The only option that shouldn’t be on the table is not doing anything.

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Andrew LolkAndrew is the founder of SavvyRevenue, an agency focused on scaling Paid Search for B2C eCommerce stores across Europe. They manage Paid Search for some of the largest D2C brand and retail eCommerce stores or provide sparring to in-house teams.

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