Method to Optimize and Operate Google Shopping Ads Campaigns to Attain 100% or More in Sales

Method to Optimize and Operate Google Shopping Ads Campaigns to Attain 100% or More in Sales

This post is an exception to our rule of not publishing our know-how. But a serious business owner would be challenged to take this method and DIY. This is not a one-time setup, its a process. So unless you are exceptional (and you may be) you will need someone to operate this process on a full-time basis. Our clients find that the increase in sales and profit more than cover the cost of employing us to do that.

So lets dive right into it. The primary objective here is to determine the highest we may bid on a product in your Google Shopping Ads (that still produces a profit), that allows us to maximize sales and profit margin.

We have applied this method successfully realizing 30% increases in sales month-to-month. That is provable with references, which we are happy to provide. How much in total sales growth is possible is different for each business. We only said 100% or more because it makes a good headline. You know your market. You can tell us what is possible. We’ll try to make that happen.

We are re-evaluating bids on a daily basis according to the spend on each product so that we can ascertain the real bid prices in the market (not guessing). As a matter of course, this process clears-out “deadwood” products, which allows sales to drive our bids. Items that sell and are profitable will rise to the top, given the optimal bid they require. The poor performing products will have their bids reduced, thus maximizing spend, sales and ROI.

This outline is vague only because we do not have language that applies to every type of product, but you should get the concept. First the logic, then we follow with the actual steps to apply the logic.

  1. Understand Products: Establish:
    1. Average CPC
    2. Average Conversion Rate
  2. Understand Business: Establish:
    1. Operating Margin
    2. Product Margins
  3. Method Logic:
    1. Gross Cycle where we;
      1. (re)Set Highest Average Bid by;
      2. Individual Product
        1. Daily Revaluation
          1. Sort by Daily Cost (Spend)
          2. IF SALE > Calculate Max Bid
            1. The goal is to find the Max Bid that produces sales within a positive ROI
            2. Logic: Some products will have so little search volume that we need to allow a very high bid to get any search possible – and thereby attain vital stats. Too low a bid will mean we never get Impressions – the minimum necessary to acquire an understanding of the market for each product. Other products that do sell can be accurately evaluated and a Max Bid can be confidently established.
            3. Keep in mind that Max Bid does not mean Actual Price for the ad and that is where we retain profit margin.
          3. OR > reset Bid to Avg CPC
            1. We do not want to spend on products that do not sell.
            2. Logic: We get clicks but no sale, so we are paying very high CPC for unproductive clicks. Some products may never sell due to other circumstances outside our bid/ad. (re. competitor offers a better price and gets all sales) therefore the visitor is lost after the click for reasons we do not see in the ad statistics. We might only see this in analytics in Bounce Rate or shopping cart Abandonment. This circumstance can change without notice, therefore we must recycle the bidding process indefinitely to account for what we don’t know (or cannot know).
        2. Recycle All Individual Bids
    2. (Re)Gross Cycle

Apply the Daily Review Method in Google Ads following these steps:

  1. View All Shopping Campaigns & All Ad Groups
  2. Columns visible
    1. Cost
    2. Avg CPC
    3. Cost/Conv
    4. Impressions
    5. Clicks
    6. CTR
    7. ConvRate
  3. Custom Dates
    1. From: Date when Highest Avg Bid (Gross Cycle) was set on all products
    2. To: Yesterday
  4. Sort by Cost: Descending
  5. Filter: Cost descending order
  6. Choose product which also has Highest Avg Bid (unchanged from Gross Cycle)
  7. Change Custom Date to: All Time
  8. IF Conversion Rate for product is 0%
    1. Change Max CPC (bid) to Avg CPC
    2. UNLESS CTR is > 25%
    3. OR UNLESS Impressions < 200
  9. IF Conversion Rate > 0%
    1. Calculate New Individual Max CPC from the following ( this is the proprietary-hard part )
      1. Price of Product
      2. Margin on Product
      3. Operating Margin
      4. Impressions
      5. CTR
      6. Conv Rate
  10. Repeat at Step #3
    1. Choose next Product ID with greatest Cost which also has Highest Avg Bid unchanged.
    2. etc.

Each day, the products with the greatest Cost will be at the top of the page. These are the consumers of your budget, so its important to recalc the bid according to actual performance per steps 7 & 8. You will exhaust the cycle when the products with the greatest cost (at the top of the reporting) are also the products with new individual Max Bids you have calculated per step 8.

Once this Daily Method cycle is exhausted, then repeat the Gross Cycle which resets all those products which have Max CPC set at or below Avg CPC. It is important in each subsequent Gross Cycle to use a higher Highest Avg Bid in order to determine if those products did not get Sales (conversion) because the Max CPC set was not high enough in the first place.

We hope you found this enlightening. If you are a serious business owner who wants to run their business with precision, we are happy to implement this practice for you.

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