1. The Power of Google Shopping
Why The Advertising Platform Can Make A Store Succeed Overnight
Nobody reads ads. People read what interests them, and sometimes it’s an ad.Howard Gossage, an advertising innovator known as “The Socrates of San Francisco” in the 50s and 60s
Google Shopping drives 76.4% of retail search ad spend in the US and 82% of retail search ad spend in the UK, according to Search Engine Watch. It is no surprise ad spend rises as companies report greater success on Google Shopping over any other channel. The ad platform allows control and near-instant reporting that surpass traditional media.
Since 2002, Google has provided retailers a solution to boost sales by promoting online inventory and increasing foot-traffic to retail stores. Previously referred to as “Google Product Search” and “Froogle,” we now know this as Google Shopping and to a lesser extent, Product Listing Ads (PLAs). Google Shopping is one type of ad on the Google Ads platform, formerly known as Google AdWords.
From small retail startups, to major players like Amazon, businesses in the ecommerce industry take to Google Shopping to drive product sales. Google in their 2018 Economic Impact Report shares that “we conservatively estimate that for every $1 a business spends on Google Ads, they receive $8 in profit through Google Search and Ads.” The Google Ads model creates 70.9% of Google’s total profit. According to Summit, Google saw spend on shopping ads skyrocket by 34% in 2017—a vast jump compared to the 2% increase for text ads. The advertising platform is growing as retailers find profit through it.
That is lovely knowing others benefit, but what do individual companies experience? I run Digital Darts, a company certified by Shopify in marketing as part of their Experts program and part of Google’s Partner program. Every day we manage ad campaigns of Shopify stores. What are real-life results we see managing Google Ads for retailers?
We have a fashion client who averages $13 for every $1 spent. There’s a company that successfully raised money on Kickstarter to launch their pet product. They were lost at how to grow after the crowdfunded campaign. Thanks to ad campaigns that were well-built and managed, we were able to achieve a return on ad spend that smashed their goals by 4 times. A large drop-shipping company had stalled at $80k in sales for 2 years. The month we took over their Google Ads, they broke through 6-figures of revenue to reach a record month.
Shopping campaigns are used by stores and traders for good reason. Here are some important research statistics to take note of:
- 55% of online millennials turn to search engines when shopping.
- 64% of smartphone users use mobile search before visiting in store to figure out what to buy—most of them are same-day searches.
- 71% of smartphone users who search in store trust what they get from their search more than a sales assistant.
The ease, simplicity, and convenience of the online shopping model (as demonstrated by the growth of Amazon and eBay in recent years), makes Google Shopping campaigns a key tool in your arsenal for achieving greater sales.
The Ultimate Advertising Platform
Shopping ads typically appear at the top or right of search results. Other locations where shopping ads are used include the shopping tab of search results, YouTube, partner websites, and more. You will learn further about these various locations and how you can use them to grow your store.
Billions of dollars have been put into Google’s algorithms to deliver users relevant search and advertising results. Google wants advertisers to maintain this experience so its users continue to spend time on Google’s platforms. The giant gives advertisers the tools to make scientifically accurate decisions and then rewards them for relevancy in the form of lower costs and increased volume.
The data and trends show many businesses focus on Google Shopping as part of their overarching marketing plan. I love the platform for geeky reasons. Personally, I feel it is the ultimate advertising platform because the return on investment is clear, the control is hyper-granular, and it is a reliable lead-generation tool. We have many businesses thank us for doubling their total sales by using the platform.
1. Measurable ROI
Marketing is seen as a necessary evil. How many times have you heard the phrase, “You need to spend money to make money?” Probably more times than you’d like. A typical store owner has to ask themselves many difficult questions such as, “How much do I need to invest in marketing?” and “How do I know it’s working for me?” This is where the age of digital marketing—particularly PPC (pay-per-click)—has been advantageous with its ability to measure bottom-line results.
Google Shopping is a prime example of a platform that allows any advertiser to break down real results and attribute them in a granular fashion, allowing a store owner to see exactly how every penny was spent and what results it returned. Once your desired ROI is achieved, then you can increase your initial budget.
The granularity goes far deeper than seeing an overall ROI. You can break it down to incredible actionable insights including:
- Time of day: Do you want to pay more for people when the majority of searches and transactions take place? Do you know what time people browse and research, but do not buy? All is possible thanks to the level of data provided by Google Shopping and Analytics.
- Device: Do people buy from you more often on mobile because it is quick and convenient? Or do they convert later while searching on their desktop computer when they have more time to think about the item? I’ve turned unprofitable campaigns into cash-cows by simply observing how mobile users convert at half the rate of desktop users. Seeing how bids were 50% less for mobile led to a reduction of wasted ad spend and more aggressive spending on what is profitable.
- Keywords: Know what specific terms people search to find your products. The advent of Google Analytics reporting the majority of organic keywords as (direct) / (none) meant it is difficult to know what organic keywords lead to revenue. This makes a goldmine of knowing what keywords in a paid search campaign lead to a sale. You can use the data to make accurate business decisions for search engine optimisation and product naming that would otherwise be a trial-and-error scenario.
You can work on leveraging this data to your advantage with the second big benefit of the platform.
Insight is pointless without the ability to act on it. Google gives advertisers the control of how much they want to pay for a click depending on the time of the day, and the user’s device, location, and past interactions with the website.
Advertisers can block ads from showing up for certain keywords. Alternatively, my recommended option is, if you don’t want to go as far as switching off certain attributing factors, you can chose to spend more or less on them. For example, if you have a brick-and-mortar store closed on Sunday, you could spend 50% less on that day.
Let’s look more in-depth at an example. Say you own a women’s clothing store and your target market is women aged 25-50. When looking at the demographic data, you realise that women often click on your shopping ads and browse, but men click less and turn into a sale (convert) more often than women. Male shoppers get you a higher ROI. They just do. In this case, you should pay a higher cost per click to show your ads more often to male than female users.
If someone visited your website before and conducts another Google Search that triggers your ad, most businesses will want to pay more for the user’s click because they are more likely to convert. You can take this one step further. Someone who has viewed 10 pages on your store is more likely to buy than someone who has spent less than 60 seconds. You can create audiences off any type of data in your Google Analytics to pay more or less for a click.
This takes us close to the adage of performance-based advertising:
Get the right message to the right people at the right time.
3. Conversion rates of sales and leads
Other channels like display, social, or media-buys, generally speaking, see a higher number of bounces when people reach your store. Yet the user experience on the website is exactly the same compared to more targeted channels like email, organic search, and or Google Shopping ads.
The reason for the difference is intent. User intent is the most influential factor of conversion rate optimisation. By the very nature of search, people seek solutions to their problems. Some searches contain more commercial intent than others. A search for “buy lightest camping tent” is done by someone ready to handover money. You bet with over 70% of revenue coming from ads, Google invest a lot of money into their advertising technology. They want to understand when shopping ads should show so advertisers make profit and continue to spend.
Thanks to the information provided in a shopping ad of price, imagery, and a product title, people can make an informed decision before clicking an ad. They already know the price, what it looks like, and if it is potentially what they want before you pay for their click.
Naturally having an extra marketing platform will increase the exposure of your site and products. However, many retailers in an industry where people search for their products, will tell you they see more revenue and a higher return on ad spend (ROAS)—second only to email.
The Downside of Google Shopping
The power of Google Shopping comes with challenges. As more ecommerce businesses take to the platform, competition can be fierce. Sellers know it as an essential element to their marketing plans. In order to remain competitive, this pushes the cost per click up and companies must increase budgets to compensate. When a new store advertises in position one, everyone else drops one position while experiencing a decline in sales.
If you are a store owner and decide to run the campaigns yourself, you are up against professionals like myself that do Google Ads full-time. I regularly help shop owners in Shopify forums who wonder why they have spent $500 on ads and still have not made a single sale. The control of the platform brings with it a complexity that is overwhelming for an amateur advertiser. Meanwhile, the platform is a treasure chest of opportunities for the savvy advertiser who makes full use of its features to eliminate wasted ad spend and pay aggressively for profitable users.
When a business sees results from Google Ads, they invest more to expand its success. This includes bringing experts in-house, buying new tools, allowing more ad budget, redesigning web pages to boost conversion rates, and improving the lifetime value of the customer so the company can pay more than before for a click. The aim is never about dominating the search engine. Google Shopping comes down to who can make the most revenue per click.
There is an abundance of best practices you can follow to maximise your reach and return from Google Shopping. You can be a more savvy advertiser. Not only will I break down how it all works, but I’ll share with you my arsenal of optimisation tips that allow us at Digital Darts to repeatedly grow Shopify store after Shopify store.
- 1. The Power of Google Shopping
- 2. How Does Google Shopping Work?
- 3. How to Profit From Google Shopping
- 4. How to Setup Key Google Products for Ad Growth
- 5. Your Google Shopping Feed in Shopify
- 6. Campaign Structure
- 7. Optimise Your Google Shopping Campaigns
- 8. Google Shopping Merchant Center Programs
- 9. Expanding Beyond Google Shopping