The Ultimate eCommerce PPC Strategy for Profitability

Let’s be real. We all want to be #Winners when it comes to Google Ads and Shopping. But the struggle is real! Let me help you generate profit with the perfect eCommerce PPC management plan!

It took me more than 10 years to develop my strategy. Suffice to say it’s not perfect, and the landscape of PPC is changing faster than ever.

Nevertheless, I’ve found a solid PPC foundation for any small or growing e-commerce company. In fact, my platform has outperformed PPC agencies that are supposed to specialize in e-commerce!

If you’re struggling with how to manage a successful Ecommerce PPC strategy, read on!

Quick Overview

• My Background
• The Basic Theory
• Google Shopping Strategy for eCommerce PPC
• Google Ads Strategy for eCommerce PPC
• How To Implement Them
• Conclusion

My Background

In the mid 2000’s, I took over as the Manager of E-Commerce for a regional furniture company in Austin, TX. It’s fair to say I was in over my head a bit, and my main goal was not to break anything!

At the time, the company was dumping money into AdWords. We were easily spending over $1,000 a day, with a monthly Google AdWords budget of $50,000 to $60,000. It seemed obvious to me that I better figure out how to keep that cash cow alive!

I bought every book I could find on managing Google AdWords account (yes, books… this was a long time ago, kids!), read them over the course of two weeks, and then set to implementing changes I hoped would improve our performance.

During this phase, I learned the company had spent $200,000 over the previous 4 years bidding on the search query furniture. I also discovered they’d spent more than $10,000 on the search term modern wedding dress. To be clear: This company only offered a selection of low to mid end modern furniture. They did NOT selling wedding dresses!

As you can imagine, AdWords optimization and improvements were easy to come by! It turns out that managing PPC accounts 15 years ago was actually pretty easy.

Obviously, that’s not the case today!

Unfortunately, I also made a ton of costly mistakes before I finally hired an agency to handle the PPC management for my company. That’s when I discovered the final piece in a successful PPC strategy for e-commerce.

Obviously, developing an effective strategy to your PPC is crucial to any online retailer. It’s even more important when you’re just starting out, and awaiting the fruits of your Social Media and SEO labors.

The Basic Theory

I may have singlehandedly discovered every pothole on the road of Google Shopping. I piled up too many mistakes to count to finally uncover one very important truth:

Not all traffic is created equal.

I know. It’s not as eloquent as the Declaration of Independence. And, actually, I’ve known that truth for a long time. The “important truth” I discovered is how to deploy that mindset to maximum affect in your Google Shopping management.

To start, it’s imperative to understand how search queries translate to sales to craft a successful online marketing strategy for your Ecommerce business.

If you haven’t read about it, TrackMaven has a great article about the marketing funnel. Here’s their graphic:

Plenty of ink has been spilled on the subject, so I’m not going to re-hash it here. However, the basic approach to implementing successful Google Ads campaigns for eCommerce is to start at the narrowest end of the funnel (potential customers almost ready to convert), and then slowly work your way up the funnel towards “awareness” as your business grows.

It’s doesn’t take a rocket scientist to understand that someone searching “shoes” is looking for something entirely different from someone searching for “Adidas Adizero Size 11.” There’s lots of traffic for the former, but more more immediate sales for the latter.

So, with that concept in mind, let’s start talking about Google Shopping!

Google Shopping Campaign Optimization for eCommerce PPC

Tackling Google Shopping requires a two-pronged approach. To be more specific, successful Shopping optimization requires both an optimized campaign structure paired with intelligent bidding.

Why? Well, like I mention above – not all searches are created equal. Unfortunately, as you may know, Google Shopping isn’t keyword driven in the same way Search Ads are. You don’t get to pick and choose which searches your products are served for!

The only obvious control you have is with negative keywords. Which brings us to starting with the ideal campaign structure.

Credit where it’s due… This idea has been around a bit. The Ad•o•matic variation is based off Wordstream’s great article… with some tweaks.

I call the approach Sifted Shopping. Here’s the basic idea:

If you’re like most retailers, you have a core of reliable brands that make up a bulk of your revenue. These main brands get broken out into their own tiered Shopping campaigns.

• Your -RED Shopping campaign is set at the High priority, and includes products at a lower bid. The idea here is to get traffic to your site with the recognition of two facts. First, this campaign will probably convert at a lower rate. Second, it’s impossible to funnel out ALL undesirable traffic. Trust me, I’ve tried… (Did you know Google has a 10,000 limit on negative keywords?)
• Your -YELLOW Shopping campaign is set at the Medium priority. It includes the same items as the -RED campaign, and is set at a moderate bid.
• Finally, your -GREEN Shopping campaign is set to the Low priority. It includes the same set of items again, but with a relatively aggressive bidding strategy.

You create these three campaign sets for each featured brand, and leave the remainder of your catalog in a general campaign set. So, if you have five featured brands, you would have 18 Shopping campaigns – 3 each for each of the five brands, plus a set of three for everything else.

One featured brand campaign set would look like this:

It’s worth mentioning a few points here. This structure relies on having the same set of products in all three campaigns. Furthermore, the campaign priority level is very important. You’ll see why later.

Next, in addition to the tiered campaign structure, you need to create a complementing set of negative keyword lists.

• List #1 – The first list will be the brand name and branded product names. This list pairs is applied to your -RED and -YELLOW campaigns.
• List #2 – This will be a set of keywords and phrases that you know DO convert, but are NOT associated with your branded products. This list is applied only to your -RED campaign.
• List #3 – The third list will be general keywords that you know do NOT convert. This list is applied to all three Shopping campaigns.

The end structure maps out like this for each brand:

This combination of campaign priorities and keyword lists creates the ideal scenario for you. First, you’re going to be excluding traffic you know never converts. Second, you can bid aggressively on highly motivated end-of-funnel traffic. Finally, you can do all of that while controlling your overall traffic and ad spend.

Let’s put this structure into a very small example. We’ll pretend you carry three pairs of Adidas running shoes:

Following this strategy, you should have one campaign at each priority level: Low, Medium and High. In each campaign you would have all three pairs of shoes. Then you’ll create three negative keywords lists based on historical search query reports.

In our hypothetical example, the whole picture would look like this:

So… This can all seem like a lot of work. Believe me, I get it! But it’s worth it. To see how, let’s discuss what happens with the following search queries:

• Men’s running shoes – This query doesn’t trigger any of our negative keywords. Therefore, our highest priority campaign (-RED) is served with a low bid.
• Men’s Adizero size 10 – This query includes the branded keyword “Adizero,” which is on our branded negative keyword list (List #1). That list is pointed at the -RED and -YELLOW campaigns, so Google is forced to serve our lowest priority campaign with the aggressive bid.
• Running shoe size 10 – This query includes the word “size,” which we’ve (pretend) determined is more likely to convert based on our search query history. That word is on our positive keyword list (List #2), forcing Google to serve the Medium priority campaign at a moderate bid.
• Adidas Pureboost laces – This query includes a brand keyword, but it also includes a non-converting word “laces.” Since that keyword is blocked in all three campaigns (by List #3), your ad won’t show. Which is great because (in this example) you don’t carry laces!

As you can see, the above structure lets you funnel traffic to campaigns and bids that should more closely match the searcher’s likelihood of converting. That gives you the ability to put your products in front of the customers most likely to buy.

Furthermore, where you and your competitors might usually bid $0.40 for a pair of shoes, you can outbid them for that narrow slice of end-of-funnel traffic most likely to convert! Your average CPC for the shoes might still work out to $0.40, but you’re spending more for better traffic, and less for low-intent visitors.

To summarize, by creating a tiered campaign set with matching negative keywords, you focus your bidding on the best strategy for your business. For instance, you could just bid aggressively on high-intent shoppers, and bid $0.01 on everything else. Alternatively, you could also bid for more impression share in Google and, hence, acquire more traffic.

Speaking of bidding…

If you’ve ever gotten into fitness you understand the importance of pairing diet AND training. I won’t bore you, but either one without the other just doesn’t work!

Implementing the above campaign structure is step one, and it gets you headed the right direction. However, it has to be paired with intelligent bidding to really reap the rewards. I could elaborate, but trust me when I say bidding is exceedingly important!

Every business is different, so it’s impossible to touch on every specific approach to Google Shopping optimization. Personally, I’m a big fan of ROI when it comes to bidding.

Let’s get back to the example above, and talk about how the bidding might look in practice.

We’ll pretend we’ve been bidding $0.25 on all three pairs of shoes. Here’s some stats from our fictional Google Shopping campaigns after one month:

I suggest working off a product’s performance, and tailoring your bid around your ideal ROI. In fact, Ad•o•matic is designed exclusively to bid to ROI (or ROAS). I use the following formula:

BID = Average order / Desired ROI * Conversion Rate

Let’s pretend our “desired ROI” is 4… I have no idea what the margins are on shoes! So, our bid for the Adidas Pureboost Shoes based on the above stats would work out as follows:

BID = Average order / Desired ROI * Conversion Rate
    = ($925.32 / 14.02) / 4 * (14.02 / 782)
    = $66.00 / 4 * 0.0179
BID = $0.29 (Adidas Pureboost)

To take it a step further, I would also calculate the bids for the other shoes as follows:

BID = Average order / Desired ROI * Conversion Rate
    = $49.99 / 4 * (14.02 / (782 + 56 + 312))
    = $49.99 / 4 * 0.0122
BID = $0.15 (Adidas Men's Duramo)

BID = Average order / Desired ROI * Conversion Rate
    = $74.95 / 4 * (14.02 / (782 + 56 + 312))
    = $74.95 / 4 * 0.0122
BID = $0.23 
PENALTY = Actual clicks * (Conversion Rate * Cushion)
        = 312 * (0.0122 * 80%)
PENALTY = 3.172 
FINAL BID = Starting bid / Penalty
          = $0.23 / 3.172
FINAL BID = $0.07 (Adidas Adizero)

There’s actually a ton to digest here, so let’s dig into it a little bit.

To start, I made some assumptions on the final two bids. In this example data set, we’re pretending there’s no conversion data for those shoes. So… an element of guesswork comes in. For instance, without conversion data I don’t have an “average order value.” Instead, I’m assuming the average order will be the price of the shoes.

Next is the conversion rate itself…

Let’s start with the Duramos. I’m assuming that they will perform in-line with the campaign as a whole. Notice that I use all of the clicks from the campaign to estimate the conversion rate. This results in a lower conversion rate (1.22% versus 1.79% for the Pureboost).

The final pair of shoes is even more complex. Again, I know we haven’t tracked a conversion for them, so I make the same assumptions for average order and conversion rate. But I also see we’ve had substantially more clicks than our average conversion. Therefore, this bid includes a “penalty” for the underperformance.

It’s worth making a few other points here:

• By breaking out each pair of shoes into its own product group, we get a better much clearer picture of the performance. You can’t do that if they’re all clumped in a “shoes” group.
• Let’s pretend $925 in revenue on $258 in ad spend is good. (Again, I know nothing about shoes – these numbers are all made up!) $925 on $172 is surely better!
• Imagine the improvement in performance if we bid as calculated above for each individual pair, instead of just $0.25 for the whole bunch. Diverting just 110 clicks from the Adizeros to the Pureboost would have saved $2.20 in ad spend and driven 2 more sales for roughly $132.00!
• Now imagine that process applied to the tiered campaign structure already discussed, and then scaled to your entire catalog of hundreds or thousands of products!

Ideally, you would adjust these bids as product performance changes. As an example: Let’s say you sold three pairs of the underperforming Adizero’s as you hit 400 clicks. That would necessitate a new bid of $0.14.

If you’re not keeping your bids up-to-date, you would still be bidding half that. Obviously, that would negatively impact your ROI!

How to Optimize Google Search Ads for eCommerce PPC

If you’re old-school (like… not a Millenial!), you’ll remember when Google Search was it. Keyword research and bidding to position were the bread and butter of great campaigns! With the advent of Google Shopping, plain-Jane google Search has moved to second fiddle.

However, I’ve found it is highly effective to build out search campaigns based entirely on your Google Shopping feed. This methodology enables you to build out Ad Groups for every product you carry, bidding on the product’s name, SKU, even UPC.

Like our Shopping campaign optimization above, this technique gives you laser focus on traffic that’s most likely to convert. After all, you’re targeting keywords related to specific products. That means we’re talking about low-volume and low-competition keywords, that are highly likely to convert.

In my experience, you can expect these campaigns to convert 3x – 5x better than your Shopping campaigns!

Getting back to our shoes example from above, let’s game out how this works in practice.

Each shoe is given its own Ad Group, keywords, and ad variations. So, the Adidas Pureboost would look like this:

image here

If you can implement a process to tie your Google Search Ads into your Merchant Center Shopping feed, you can pull in tons of useful data. For example, you can pause Ad Groups for items that are out of stock, or no longer available.

How To Implement These Strategies

I’ll just be blunt here: For years I’ve struggled with ways to implement these strategies on a large scale. The three-shoe-catalog example above is pretty easy to deal with manually. But if your product catalog is in the hundreds or thousands… Well, manual processes just won’t cut it!

Suffice it to say that I created Ad•o•matic specifically to deal with this pain point. In other words, what I’ll demonstrate below are half-measures… Strategies you can implement to scale up and afford the full benefit Ad•o•matic offers!

With all of that said, let’s start with building the campaigns. You’ll need to download and install Google Ads Editor, if you don’t have it!

videos go here!

As you can see, implementing these strategies on a large scale is… well, difficult. Keeping them up-to-date is also an incredibly tedious endeavor.

A here’s the shameless plug: That’s why you need Ad•o•matic! Our solution runs seamlessly in the background of your Google Ads account. It does everything ad-o-matically: pulls updated search query data, updates your negative keyword lists. It synchs up your Google Shopping feed with your campaigns to maximize profitability!

Conclusion

Here’s the full TL;DR: Target profitable searches first and foremost. In Google Shopping, you can only achieve that goal with a tiered campaign structure paired with matching negative keyword lists. Target your Google Search Ads for product names and brands first, then converting keywords. Bid smart!

Let’s be real: PPC for eCommerce is a competitive space! I’ve spent more than a decade developing a strong PPC strategy, and years coding different programs to achieve them. I’ve also spent tens of thousands of dollars on PPC management.

The right PPC strategy for eCommerce requires focusing on high-intent searches, and gradually working your way up the sales funnel – for as long as you can remain profitable.

As you can see above, there are ways to manually implement the basic techniques. If you wants a hands-off Ad•o•matic (sorry!) approach, our system is designed to be the eCommerce PPC solution!

Leave a comment below and let me know what’s worked for you to optimize your eCommerce PPC!