Whether you’re an online or even offline business, Google Ads (former Google AdWords) may be your premier online advertising platform. Google Ads has been one of Google’s top earners for over a decade, offering text, video, display, and product ad formats.
If you run an eCommerce business and want to take advantage of eCommerce Shopping Ads, you should know a couple of facts first.
This article covers the most important ones:
- Google Ads text ads are a significant financial and time investment.
- Google Ads can be shown on the Google SERP (search engine results page) and on its Search and Display Networks.
- Product Listing Ads, which are managed via Google Ads, are the top online product advertising channel for retailers right now.
Let’s break down the fields you’ll need to be squared away to start with Google Ads on the right foot.
1.1 Why am I exceeding my daily budget?
On some days, you might see that your daily spending on your Google Ads campaigns exceeds your budget limit. This is happening because the Google Ads system will show your ads more times during the days with higher search traffic.
You don’t have to worry! Google will allocate your budget for 30 days so that your total amount spent won’t exceed the amount that is equal to your daily budget multiplied by 30.4. This is the average number of days one month has.
On a day with particularly high traffic, you may see that you spent $30. However, maybe the next day, there isn’t much traffic, so Google doesn’t spend as much. Either way, Google will be sure not to exceed your daily budget for 30 days.
If your daily budget is $100 per day throughout a month (a $3040 monthly charging limit), and you’ve accrued $3100 in costs over a calendar month, you’ll only be charged$3040. The other $60 is returned to you as an over-delivery credit.
You can’t be an effective Google Ads advertiser without consuming a lot of data. And the only way to get a lot of data or a sufficient sample size to make campaign modifications confidently is to continually test and work through a reasonable budget dedicated to clicks.
For example, Wayfair, a well-known furniture online shop whose budget is well over $50k/month on Google Ads, can easily find out more about testing the effect of adding “Free Shipping” in their ad copy in one day than a small furniture retailer testing the same thing over several weeks.
Generally speaking, an eCommerce retailer should be prepared to spend at least $2-5k a month on Google Ads – again, this is only for clicks.
CPCs (cost per click) rates will vary depending on your vertical. For example, if you’re an apparel retailer, you’ll most likely see much higher CPCs than a retailer of pool accessories, where competition is inherently less.
1.2 How to effectively manage my Google Ads budget?
Several ways to effectively manage the budget include
1.2.1 Setting budget limits.
When creating a new campaign, you can limit that campaign to a specific daily limit. Since this can only be done on the campaign level and not the ad group level, you should create a separate campaign if you want to run ads with a different budget.
This is a good strategy for a product category that may receive many clicks and not convert well.
Day-parting, or ad scheduling, is an advanced tactic that allows an advertiser to modify bids by the time of day. For example, let’s say you’re a furniture retailer, and the data shows that 80% of your sales are made between 3 pm and 8 pm. You can rev up bids during this time slot and, conversely, reduce bids between 11 pm and 5 am when perhaps your COS is highest.
1.2.3 Improving quality score:
Quality score is a black box for a lot of retailers. Generally speaking, it’s determined by the quality of your landing page, your CTR, your ad copy, and the relevancy of your keywords. Quality score and bidding alone determine your ad rank. By improving your quality score over time, you can effectively reduce CPCs for keywords.
2. Campaign Structure
Driving conversions while maintaining a high ROI is the name of the game with Google Ads. So a well-structured campaign is an essential keystone in achieving this goal.
The structure of your campaign will differ if you’re running text ads vs. product ads, but the system for the former carries over the same principles.
Let’s say you’re a furniture retailer with a Google Ads account. A fundamental way to break out your campaigns would be by product category since they’re typically a nice, general place to start tracking performance.
So you would have one campaign for Beds and another for Tables. From there, you can segment those out more granularly with ad groups.
For example, your Beds campaign may contain an ad group for Wood Frame Beds and another for Water Beds (do they still have those?). This type of hierarchical structure will allow you to better track conversion performance for specific segments of your store catalog.
Here is a structure we recommend:
3. Management Resources
Simply put, even if Google wants you to think otherwise, Google Ads is a complicated tool that only an experienced and skilled Paid Search specialist can take full advantage of.
Campaigns need to be tended to (ideally) daily and depending on the ad format, you’ll need a certain level of tech-savvy. Because of this, it’s very typical to see a retailer hiring a Director of Paid Search and several managers to handle this or, better hire a PPC marketing agency to take care of their account.
For your standard text ads, you’ll need a budget, a Google Ads account, and a general idea of the keywords you want to hit on to get started.
But for Shopping Campaigns, Google’s new model for product listing ads, you’ll need to be able to handle your product catalog or feed, optimize that data and automate submissions to the Google Merchant Center to get the most out of your product ad campaign.
Paid Search management is a full-time job, so an eCommerce business shouldn’t be dabbling with Google Ads if they can’t afford to bring a new hire or a Google Ads agency to manage this.
However, missing out on the benefits of advertising with Google is a huge competitive disadvantage, especially since Google is making eCommerce the main business focus.
It should be a top priority for retailers to take full advantage of Google Ads and Shopping Campaigns by Q1 of 2023.
Waqar Hussain is the founder of The Business Goals. He is B.Com, GDM, and an MBA from the Australian Institute of Business. He has a lot of experience in the field of digital marketing and helped hundreds of businesses across the globe for growth.