6. Campaign Structure
Save Time and Profit with the Right Structure
If you don’t have time to do it right, what makes you think you’ll have time to do it over?
Seth Godin, author and marketer, on why hurrying almost always makes it take longer
You have the right accounts setup, you have a strategy, and your feed is looking sweet. There is a fair amount of legwork to do during the setup phase (there’s a reason our agency charges a setup fee for new Google Ad clients because it takes time to do right!), but the payoff is worth it.
Everything you’ve done so far will make your products show for the most relevant searches to increase click-through-rate, reduce the cost of irrelevant clicks, and meet your business goals. The time has come to create your first shopping campaign.
The First Campaign—Right The First Time
We’ll start from the beginning to help you know the platform inside-out. If you are to succeed at Google Shopping, you want to know every lever you can pull and its affect. At Digital Darts we know the Google Ad platform like our own child. That does not guarantee success from it, but we’re confident you will get maximum profit through us if it can happen. This is the level of confidence you want to have in your knowledge of an advertising platform and why this Google Shopping guide leaves no stone unturned.
When you click to create your shopping campaign, or when you edit your existing campaign settings, you have an option to select three goals:
- Website traffic
The sales goal is thought of as the standard. The leads goal works to achieve leads through showcase ads where multiple products are shown in an ad unit. The website traffic goal works to achieve more visitors to your website with the “maximize clicks” bid strategy.
All campaign settings are available to you regardless of what goal you select. The goal you select makes Google recommend features to achieve that goal.
The “Maximize clicks” strategy is appropriate when you have a lot of SKUs and a low budget. The best situation for showcase ads is unclear, but it’s inappropriate for specific searches where people want an exact product like when they search a brand or model. Showcase ads are thought to be best for general searches where you have a category of products that can meet the person’s needs. I suggest you select “Sales”.
Next you’ll select the Merchant Center account you linked earlier to Google Ads. Select the country you picked for your feed. The country should have the number of products available, which includes in stock, out of stock, and disapproved products submitted to Merchant Center:
When deciding on a name for your campaign, consider how you want to split out products. How you organise the account matters. A clear, well-thought out account structure helps optimisation, avoids products not being advertised, and saves you time navigating through an unclear account.
You are unlikely to get a perfect structure the first time you setup an account. That is okay as changes can be done later. You have to adjust your strategy as the data tells you.
I personally like the following naming convention for consistency as it tells me core information at a glance:
Website name – Campaign type (e.g. Search) – Keywords of insight (e.g. Brands)
There are other settings to consider. You can manage your product inventory and create customised product groups using your chosen product attributes. By default, all of your products within your uploaded data feed are included within your Shopping campaign. However, by using the Inventory Filter, you can limit the products you wish to advertise using different attributes. If there’s products to not be advertised, I prefer to exclude them from the feed so I don’t have to worry about inventory filtering.
The option of Local Inventory Ads is discussed later in the guide when we cover Merchant Center programs. It is useful for driving foot traffic to brick-and-mortar stores. Ignore the “Campaign URL options” unless you have your own tracking software.
The bid settings covers how you pay for ads. There are a buffet of automated and manual bid strategies. Manual bid strategies were popular since the creation of Google Ads up to 2017. Now Google’s machine learning makes automated bid strategies superior.
The less time you spend tinkering with bids, the more time is available for strategising, writing ad copy, improving your feed, and doing other tasks artificial intelligence cannot yet do. I think about working with Google’s machine learning as letting it do the grind work with my surveillance. You still need to monitor the automation.
There are three automated bidding strategies:
- Target ROAS: Google will automatically increase or decrease your bids every time your ad is eligible to run so it meets your defined ROAS. The bid strategy will keep bids more in-line with your ROAS the more conversions your ad groups generate. Keep an eye on a campaign using the target ROAS bid strategy as advertisers often come back to find they’ve reached lots of people but have no conversions. This happens all the time with store owners attempting to use Google Shopping in Shopify’s marketing section of the admin.
- Maximise clicks: Google automatically pushes your ads to get the maximum number of clicks. It does not consider conversions or revenue. This strategy is favoured early for a campaign (until data comes in) with low budget and lots of products, as it does exactly what it says on the tin.
- Enhanced CPC: Google increases a manual bid if it is more likely to convert or decreases the bid if it’s less likely to convert. Also known as “ECPC”, it is the most popular bidding strategy among advertisers. The bid strategy gives advertisers a lot of control and allows them to implement this with their manual strategies of bid modifiers. It’s not so great for those who are unfamiliar with Google Shopping or those with little time, as manual bidding optimisation is needed.
If you’re on a budget of less than $20 a day and you have a SKU range of over 100, then you can try the “maximise clicks” strategy. I suggest a ECPC strategy for new accounts. As the account matures to 50 conversions a month, then you can consider swapping to a ROAS strategy where your ROAS will remain more stable. More on these later as well as bid management when we dig into bid strategies for account optimisation. For now, select a ECPC strategy, enter your budget, and leave the priority setting to “Low”.
Selecting an Intelligent First Bid
If you decide on a manual bid strategy or enhanced CPC, how do you know what amount to pay per click? One option is to select anything between $0.1 and $10 per click, then adjust it based on performance. The second option is to approach it mathematically to give your products the best chance from the beginning.
Firstly, consider the maximum bid you are willing to pay per click. To figure out your maximum bid, you need the following:
- Profit margin: Naturally, the only way you can make money from Google Shopping is to make sure your profit margin is more than your click costs. If you pay more on clicks than the marginal return, you’re not making money.
- Product conversion rate: Each product is likely to have a different conversion rate, which is determined by a number of factors mainly on site. Once you understand how often your product converts, you can work out how much traffic you need to send to the store to hit your goals.
- Cost-per-acquisition (CPA): The last step you need to know is your CPA. How much are you willing to pay for a sale? This will be determined by your profit margin mentioned above.
When you put all of these together, you get the stats to work out your maximum CPC. So, for example, let’s say you sell novelty sweaters and you want to work out the maximum CPC for your new range of sweaters with penguins on them. First of all, consider your profit margin. A simple way to figure this out is:
(Item price) – (Cost to produce & deliver your penguin sweaters) = Profit
The formula is not dead accurate given there are other costs to consider, but it’s a good start given its simplicity. If the penguin sweater costs $10 to produce and deliver, and it costs the customer $25 to buy, your profit margin will look like this:
$25 - $10 = $15 profit
You then need to use your conversion rate for the product. You can get this in Google Analytics by going to “Conversions” > “Ecommerce” > “Product Performance” then view the “Buy-to-Detail Rate” metric. Multiply this metric for the product by your profit margin to work out your max CPC. Let’s say your sweaters convert at 3%. Your equation looks something like this:
$15 x 3% = $0.45
That means, your max CPC in this case is $0.45.
The one assumption to this strategy is that shopping ads will convert at the same-rate as existing traffic to product pages. If a lot of your traffic is from organic search, this is likely to be a safe assumption as the traffic quality will be similar.
Search ads are likely to have a lower conversion rate than your shopping ads. In shopping ads, people know the price, name, and what the product looks like before clicking. If you base the conversion rate on results from search, check the conversion rate after you receive a good month’s worth of conversions from shopping ads.
My primary point in sharing these calculations is to help you pick an intelligent first bid. You must still work on bid management as data comes in order to hit “the sweet spot” for profit.
Targeting and Scheduling Settings
In the campaign settings, select to include Google search partners. The only way to tell if Google search partners will work for you is to try it. I see it work more often than not for Shopify stores. Simply checking the box is a way to drive approximately 10% more sales through shopping ads.
Add the country you are targeting for this campaign. This should be the same as the “Country of sale” setting where the products are sold. You’ll need a new campaign to target other countries.
Later in the optimisation chapter, you will add more specific states and cities to the campaign. Doing this gives you the power to easily see the performance of, and modify bids for, each location you include. I have a free bonus for you when we dig into this optimisation phase so you don’t waste time adding each country, state, or city one-by-one.
For the last few location settings in your shopping campaign, I suggest you select Google’s recommendations of including “People in, or who show interest in, your targeted locations (recommended)” and excluding “People in, or who show interest in, your excluded locations (recommended)”. People can search then buy from another country they are living in even if you don’t ship to the country they search from. They may be holidaying overseas or buying a gift for a relative back home. The same idea applies for excluded locations: people may be in your target country searching for the product to buy in another country. You can review geographic reports when optimising the account to see if it’s worth changing this setting.
Strategy and Structure
When you create your first shopping campaign, you have one ad group that holds all products. Unless you have one product, we want to avoid such clustering.
The structure of shopping ads can be broken into three levels:
- Ad Groups
- Product Groups
Multiple shopping campaigns are done with prioritisation settings or negative keywords. Doing this lets you make a product not appear, or lets you bid less, for keywords of your choice.
Below the campaign level, we have ad groups. There are two reasons we build multiple ad groups in a shopping campaign. One is to see the search terms generated by the product(s) in the ad group. This lets you add negative keywords at an ad group level to filter queries towards other products. The second reason is these queries give you insight into the keywords you can add, subtract, or priortise in the titles and descriptions of those products.
Below the ad group level, we have product groups. There are two reasons we divide ad groups into product groups. One is the ease of reporting when looking at the division. The second reason is to customise bids based on feed attributes you setup when building your feed. If you divide by product type, you do so with the intent that the product types should have different bids because they will vary in performance. If you sell white goods, a product type of “refrigerator” should have a different bid than a cheaper “toaster”.
When considering the segmentation of your account, be mindful of the strategy covered earlier in the guide, how you setup your feed, and the three levels of a shopping campaign. Did you use custom labels to group products in low margin, medium margin, and high margin categories? Are product types impacted by seasonal trends so you included a custom label with their most popular season? Does weather affect what you sell? Do you stock a wide range of brands? A clear strategy saves you time and energy on a bloated, difficult-to-manage campaign. It helps you zoom-in on core products and what feed data you’ll need to alter to meet those goals.
I usually recommend the most important attributes (meaning, their affect on sales) be the first level of division at the campaign level. The attribute you use to divide multiple campaigns is best done on data collected from ads running for several months. At the ad group level, we divide products by an attribute we want to see search terms to help optimisation of those products. Then at the product group level, we divide to get the bid control to meet our advertising profit goals.
You can divide an ad group up to seven levels. How far you go is a balance of management time and control needed for performance. A tiny number of advertisers have an ad group for each SKU, which involves a lot of work upfront and is cumbersome (and possibly unnecessary) to manage if you have 100s of products.
To help you segment campaigns well, let’s delve into four of the most popular segments we use for Shopify clients and when each can be appropriate for your business.
Large brands with an instantly recognisable name and product offering are easily wed into a product or ad group or even their own campaign.
Advantages to this method include budget allocation, custom bid strategies, and search-term prioritisation. Brands and models will typically convert better than generic searches so dividing a campaign by brand (using prioritization and negative keywords taught in the next section) can help sales. Remember you’d divide by brand at the ad group level if you wanted to see the search terms triggered by a brand.
With this in mind, like all segmentation, you need to adjust your bids as the data comes in. We have several clients who stock known brands yet queries for these brands convert no better than unbranded searches.
Disadvantages in segmenting first by brand can come in areas such as seasonality of products where off-season inventory might get lost behind the inventory that moves all year round. When the time comes to push seasonal inventory, the budget could be too heavy towards perennial products that seasonal inventory might not get their day in the sun. You can get around this of course by dividing the “brand” into a custom label of “season”. You may find dividing by “season” then “brand” better meets your goals.
Category and Product Type
At Digital Darts, the most common segment we use for client ad groups is the product type. The Google category for taxonomy in the feed is often built from the product type in DataFeedWatch, so it is redundant to then segment by category.
You can create clean, clear separation for shopping campaigns where you may not have a strong brand offering from a widely-known manufacturer. I like separating by product type at the ad group level for the reason we build out ad groups—to see search terms for products in that ad group to help optimisation. Another reason is product types usually have similar prices to each other which makes it easier for me to eye bid management to hit ROAS goals.
If your products have an inaccurate Google category, they may appear for irrelevant searches and waste money. If your products have an inaccurate category or product type, return to the previous chapter to optimise your feed. A refrigerator categorised as a toaster will be bid on as if it were a toaster. Your products may still show for the right searches, but you will be blinded from reality—potentially wasting money and skewing campaign results
A great feature of the Google Ads platform is the option to subdivide products with your own category that is the custom label. By assigning a label, you are able to use it as a filter when reporting, monitoring, and optimising. In the previous chapter I gave you the idea of using labels for the price range, profit margin, season, promotion, sell-rate, and priority. What you set them as is up to you. They have no impact on the ad and cannot be seen by the searcher.
This method of campaign set up lets you split campaigns by specific products. It is useful when a product might have variables (for example shoe size or dress pattern) that fit search demand.
Individual product targeting can lead to better return on ad spend. Segmenting by product ID also allows you to see exactly what products in the inventory sell well. For example, size 10 dresses in red are flying out, but the same colour size 8 dresses aren’t selling so well. Use this data to allocate more spend on the items that are working to get more sales.
The downside of product ID campaigns is the high level of variables to monitor. A selection of clothing in all sizes and colours is great for the consumer but requires a good deal of time and effort for you to manage in the campaign. Try to keep the ID’s as closely aligned as possible rather than having thousands of individual ID’s which could cause a data headache for you and make tracking success a daunting task.
If your inventory is seasonal, or high volume and fast moving, you might also run into difficulty with the amount of IDs. Your shopping campaigns need to be carefully planned for maximum efficiency and, of course, to improve your revenue.
The King and Peasant Strategy: An Overview of Priorities and Negative Keywords
You’ve learned the biggest difference between search and shopping ads is the lack of keyword-targeting to run shopping ads, which relies on the feed. You may think then that whatever searches Google chooses to show your products for—aside from feed alterations—there is nothing you can do about it. That is wrong.
The King and Peasant Strategy lets you treat the precious few keywords that drive the most profit in your Google Ads kingdom, different to the majority. To grow your Google Shopping ads, you want to pay more for keywords that are Kings and less for peasant keywords, rather than treating every keyword as equal.
The first part of the strategy uses the campaign setting of priorities. This determines what campaign should appear for the eligible keywords. Let’s say for example, you have a sale campaign. The chances are some of your products will overlap between campaigns. By setting the sale campaign as high priority, you are telling Google that you would prefer this campaign to show instead of items in the other campaigns. In this case, the sale campaign is your King. By bidding more in your sale campaign compared to the lower priority campaign, you aggressively advertise products on sale.
The second part of the strategy is negative keywords. A negative keyword stops an ad from showing for that particular keyword. Much like the campaign setup, you can add negative keywords to help products show for the most relevant search terms.
When you apply a negative keyword to one shopping campaign that has a high priority, but not another that has the same products at medium or low priority, you can pay more for your best search terms and less for your lower performers. The end result is more sales and savings on wasted ad spend. The King and Peasant Strategy is taught in-depth within the optimisation chapter. The strategy is best done using conversion data after your campaigns have run for sometime.
Spending time analysing the best structure for a Google Shopping campaign is an important step that can save you time and heartbreak compared to charging in to try everything at once. Constant maintenance and analysis of ad data in an effort to make continuous improvements leads to reduced ad spend and more revenue. By carefully segmenting the campaigns for your store, you will see results that can be quantified, data that can lead you to selling smarter, and ad success that ensures your customers find the right product for their needs every time.
Let’s dig into other optimisation strategies for your Google Shopping campaigns. I will go more in-depth on the King and Peasant Strategy.
- 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