How to Get 5X ROI from Google Shopping Ads for Your Ecommerce Store?

What is Google Shopping Ads

Google Shopping Ads, also known as Product Listing Ads (PLAs), are a powerful advertising format offered by Google that allows eCommerce businesses to showcase their products directly in Google’s search results. These ads are highly visual and display key information about the products being advertised, such as the image, price, product name, and the store or brand name.

These ads serve ads in shopping inventory — just above search results or in the shopping tab of all results. It is the most prominent and best-converting ad format on Google for e-commerce stores

Why Use Google Shopping Ads?

Here are the benefits of Google Shopping Ads for eCommerce Stores

• Increased Visibility: These ads appear at the top of Google search results or in the Shopping tab, providing high visibility to potential customers actively searching for products.
• Better Qualified Leads: Since the ads display crucial product information, they attract clicks from users with a higher intent to purchase, leading to better-qualified leads.
• Performance Tracking: Advertisers can track the performance of their Shopping Ads using Google Ads and Google Analytics to understand clicks, impressions, conversion rates, and more, allowing for data-driven optimizations.
• Broader Reach: Shopping Ads can appear on Google Search, the Google Shopping tab, Google Images, and even Google partner websites, expanding the reach of your products beyond just the search engine.
• Competitive Edge: For businesses, especially in highly competitive markets, these ads offer a way to stand out by highlighting product features, promotions, and competitive pricing directly in search results.

How To Get Good ROI in Google Shopping Ads?

Bid Strategy

Product Segmentation

Pricing strategies

Negative keywords

Feed Optimization

This is the most important and hence kept at last

What is a good ROAS in Google Shopping Ads?

There is no single answer to this as the same product by two very similar companies can have different margins and unit economics and hence targets can vary.

The back-of-napkin math every D2C business owner should know

Gross Margin = Sale Price (without tax) — Cost of Goods — Packaging fees — Shipping fees

Net margin (before marketing costs) = Gross margin — Discounts(%) — Return rate(%)

Now, if you are hiring an agency then the GM and NM should be fully clear for every SKU

To calculate a rough breakeven ROAS target

Breakeven ROAS = 1/(Net Margin (%))

Now for the CAC target

Find the historic AOV of your ads and then

Breakeven CAC = AOV — Net Margin

Google Shopping Ads vs Performance Max Campaign

If two same products are running in both Performance Max and Google Shopping then according to Google, Performance Max always gets a higher priority

In accounts with high spends or high historical conversion data, Performance Max tends to perform better as it feeds on data from other campaigns and optimizes to deliver performances

If you have a new account then start with Shopping ads on manual bidding strategy and build up to 25 to 30 conversions in a month, until then the data is not sufficient to switch to Performance max or towards automated bidding strategies

Performance max generally performs when a group of products are advertised than just individuals as there is more data, always consider trying Google shopping ads for the single product over Performance max

Even though in accounts Performance Max campaigns are performing we still run a Google shopping campaign, reason?

If the performance max ads are not served due to automated bidding targets then at least Google shopping ads are served and you don’t lose out on impression and possible conversion from it

So, a catch-all shopping campaign are a must for all accounts irrespective of whether running a Performance Max campaign

How to Scale with Google Shopping Ads?

Scaling with Google Shopping Ads involves increasing your visibility and sales while maintaining a healthy return on investment (ROI). Here are straightforward, actionable tips:

• Expand Your Product Range: Add more products to your Google Shopping feed. More products mean more opportunities to appear in searches.
• Optimize Your Product Titles and Descriptions: Use search terms data from shopping ads to improve title and description. This helps match your ads with the right searches.
• Use High-Quality Images: Use clear, high-quality images for your products. Better images attract more clicks. Also add additional images to Google using the additionall_image_link parameter
• Adjust Bids Based on Performance: Increase bids for products that sell well and lower bids for those that don’t. This helps allocate your budget to more profitable items.
• Segment best-sellers: Create a dedicated campaign with only best-sellers from shopping ads and allocate higher targets and budget to improve performance
• Use Negative Keywords: Add negative keywords to filter out unwanted traffic.
• Segment Your Products: Group similar products together in your campaigns. This allows for more targeted bidding and ad messaging.
• Monitor Your Competitors: Keep an eye on your competitors’ pricing and product offerings. Adjust your strategy to stay competitive.
• Test Different Strategies: Don’t be afraid to test different ad strategies, such as changing your bid strategy or trying different product groupings.

Conclusion

To maximize ROI from Google Shopping Ads, focusing on key strategies such as intelligent bid management, meticulous product segmentation, competitive pricing, judicious use of negative keywords, and, most crucially, feed optimization, is essential. These elements, when optimized improve ad relevance, enhance user experience, and boost your campaign’s overall performance.

While the ideal ROAS varies by business, understanding your margins and unit economics is critical to setting realistic targets and measuring success. Furthermore, navigating the landscape of Google Shopping Ads versus Performance Max campaigns reveals opportunities to scale your brand