When the rules of the game change, we turn to experts for advice and clarity. This is why we invited Brad Geddes to talk about Google Ads in eCommerce and what you can do to transform this channel into a source of revenue.
Brad Geddes has been doing paid search since 1998. During those 23 years (and counting), he has developed software, run agencies, overseen programs for resellers, work with every type of client there is, so he has a wide range of experience throughout digital marketing.
We invited Brad to share his point of view over the current digital marketing environment and how eCommerce businesses can adjust to it. We also asked him about creating and using custom audiences in Google Ads. Brad shared some tips about getting more control over rising CPAs and how to design ads in 2022.
Adjusting the Google Ads strategy to the current digital environment
Alexandra Panaitescu: How should eCommerce businesses adjust their Google Ads strategy to the current digital environment?
Brad Geddes: Tracking is always a tough subject. Digital marketing agencies and eCommerce companies have to track conversions and revenue to the traffic source, whether it be keyword or Google ads, or whatnot.
Right now, we have to adapt to a complex environment. People wonder what will happen, especially with Apple devices. At the moment, it’s not been a massive disruption for Google, just because of how many different products they have installed on our base. It’s a bigger problem in Facebook and other places.
No one should be doing manual bidding. In the last few years, ROAS bidding and automated bid systems have become so good that users should not manually bid, especially on thousands of SKUs.
With that tracking done correctly, you should get automated bidding so you can focus more on what users look are looking for. With COVID on – COVID off, openings, and reclosing is everything, the users have become used to seeing very timely messages in search.
Before the pandemic, you would have made some nice ads, let them run, you’d changed some discounts or promotions. Users are looking for real-time communication of what is going on now. “Do you have it in stock?” is the most frequently asked question. If you’re not updating your ads fairly frequently, you will have a miscommunication with users.
“Tracking should be done. The bidding should be automated. Then, it’s really about user communication, and, of course, you’re back into keeping products in stock, which might be a problem you can’t always solve.”
The Do’s and Don’ts when creating Google Ads campaigns
A.P.: Besides manually bidding, what are eCommerce companies’ biggest mistakes when creating Google Ads campaigns?
B.G.: The origin of most problems is not paying enough attention to ads:
- Choosing keywords and not always considering Google’s match types, especially if you’re uploading product catalogs;
- Not watching your search queries well enough to understand what you’re spending money on and what doesn’t work well.
- Checking through any errors in the feeds and making sure you have a well-optimized feed.
With eCommerce, you have a merchant feed that goes into the Google merchant center and then connects back to Google ads. You’ll have feed errors, you’ll have issues of products not showing, and they’re not front and center in Google ads accounts. This aspect is often overlooked because of the amount of effort involved and the detail of the work.
A.P.: Which are the best or the must-have Google Ads types for eCommerce businesses?
B.G.: You will have your product feeds and automated remarketing ads, which will just pull out stuff from users. Across the display network, we get into many carousel ads, while Youtube shows more product ads.
Ecommerce businesses should take advantage of the ad formats past search, especially on YouTube, which is, in theory, the second largest search engine.
Next June, we will see a sunset of expanded text ads and responsive search ads only. That’s going to be a big transition for everyone. You have full control if you want it. What everyone’s going to ask themselves is, “How much do we trust Google?” You could throw all your ad lines at them, let them do the work, or you could take control yourself.
A.P.: You mentioned YouTube earlier. What are your recommendations for this channel?
B.G.: I’m seeing more companies making “how-to” videos for people who want to understand the products before buying. For example, someone who wants to buy a new office chair might look for videos showing how to assemble it.
Video and non-video ads on YouTube help you gather people into the funnel even before they’re ready to buy. Then you can run your remarketing or your product ads across YouTube to reach those users. You can also make YouTube remarketing lists, and so people who watch a video could even see your ads across display networks.\
Creating custom audiences for Google Ads
A.P.: Could you share some of the best practices in creating Google Ads custom audiences?
B.G.: It’s not uncommon for a mid to large eCommerce site to have 100 plus audiences. That number sounds kind of daunting, but it’s not an uncommon number. If you’re a small site, you might have 5 or 10. It doesn’t have to be quite that huge.
For years, before this was a model, we would essentially make a matrix based on:
- How often does someone buy from us?
- How often is someone returning a product?
- What is their average order value?
Based on this matrix, you could identify the frequent,high-value, low return purchasers who are your number one customers.
Low buy, but high return, low monetary customers could cost you money buying from your store. You might include them in “other audiences” and reach them less frequently. People who only buy seasonally from you could be part of an audience for running a seasonal sales campaign.
If you set that matrix, then you can look to say, “Here are the different groups I want.” Now that’s based on your CRM system, of course, and what you can track and pull out. The matrix is the number one customer audience model used in remarketing and reaching repeat buyers.
You could also set up standard audiences based on people who added something to the cart but haven’t purchased yet or segment buyers based on the products they’ve purchased.
Then, you have the true custom audiences in Google, which are really useful on items people searched for and competitor URLs. So you could trigger ads on a custom audience based upon previous websites someone went to, which may not include yours, or previous searches they did.
A.P.: Could you explain the link between (RFM) segmentation, custom audiences, and ad relevancy?
B.G.: Ad relevancy is incredibly important. Who and why are you showing it to them should come before you design the ad. If you haven’t done segmentation, you’re writing an ad for everyone, which also means an ad for nobody.
Creating an ad compelling to a well-defined audience is key. Don’t pre-write your ads and then say, “Oh, what groups fit this?” First, say, “What groups are we targeting?” and then think, “How do we write ads that fit this group?”
Segmentation alone doesn’t cause someone to take action. The ad itself is what compels someone to want to take action on your site. What segmentation does is help you decide whether you show an advertisement to an audience or not.
For example, you have your group of people with high monetary value and high frequency.
This group could be segmented by the types of products they buy. That way, you can tailor your ads to what that group has previously purchased and suggest add ons for that group’s item. If someone bought suits from you, show them belts, ties, and shoes.
If you can’t go that granular, you can break this group into purchasers who don’t need discounts versus people who do need discounts. Some people only buy when it’s a sale, so show them ads only when running sales campaigns.
How far can we segment it reasonably? You can’t go too granular because running an ad per person is ridiculous, and that ad won’t show any way without enough users per ad type.
A.P.: What’s your advice on creating lookalike audiences for Google Ads?
B.G.: A similar audience is only as good as your original targeting was.
Lookalike audiences are reaching people similar to the list you created. So if you make a list of people who abandon your shopping cart and may be interested in the products, the new customers you attract will have a much lower value than if you used a similar audience to people who previously bought.
If you have a group of user abandoners, you don’t want to make a similar audience to it. The more likely someone bought from you at a higher price point, the better the lookalike audience will be.
If you’re focused on sales, take your high-value customers and create a lookalike audience around them. If you’re focused on increasing brand awareness, a good lookalike can include people who spend a lot of time on your website.
Using custom audiences helps you increase customer lifetime value. You can easily scale without changing all your keywords in ads. It’s pretty easy to make a couple of changes to switch an ad around customer audiences.
Another way is looking at your current ads and asking yourself what could transform your existing customers into loyal customers. Also, use display network campaigns where you’re specifically targeting a group to increase lifetime customer value.
How to optimize your Google Ads
A.P.: How can eCommerce businesses combat the rising costs per acquisition?
B.G.: What’s interesting is that we’ve seen costs go up significantly in the last five years, but the return on ad spend has been fairly static.
Much of that is because people got better at tracking things and realizing, “Oh, we weren’t attributing these sales, this margin, or these items.” The main question here is, “Are you tracking everything appropriately?”
Costs, in general, represent a margin problem. The better your margins, the more streamlined your business.
The Target’s, Walmart’s, Amazon’s of the world are selling at a lower ROAS, but having a large increase in total sales because they make enough in the end, and that’s the advantage of logistics.
This becomes a real issue for smaller companies because they can’t match those margins. You must differentiate with a unique value proposition when you can’t beat the other companies on straight margins.
If you have a higher conversion rate because the right people have clicked on your ads, you can afford a higher cost per click because your conversion rate went up, and that’s an important source. It’s not every click. It’s the clicks that are most likely to convert. You can combat rising CPCs is better conversion rates by using ads tailored to the correct audience type.
A.P.: What should eCommerce companies keep in mind while preparing their Google Ads in 2022?
B.G.: There are two things eCommerce companies have to watch out for in 2022.
First is how Google matches search terms.
The issue we’ve seen a lot of lately is that users do a lot of research or random questions, which may be like, “how much does the average TV worth,” or “how far should my couch be for my TV set.” This is someone who may just be actually placing TVs in their house.
Then Google will say, “Oh, look, you got the word ‘sony Brava, 63-inch plasma TV’ on the broad match over here. We’re going to match that query over to ‘how far my TV should be from my couch.’” Is that going to convert? Probably not. With all these “who, what, why, when, where” questions happening on mobile devices, we see an increase in poor clicks.
The second thing to watch for is responsive search ads.
You have a lot of options on control of them. If you have a medium to small traffic set, throw nine ad lines at Google and say, “go figure this out,” a responsive search ad could have well over 40,000 combinations, so it can take a very long time for a machine to figure that out. If you’ve been advertising for a while, you have an idea of what your customers want.
After June next year, when you can no longer make the current ad formats, you have to think about how you can help the machine while still using your knowledge of your customers, so they continue to buy from you.
Ecommerce companies should adapt to the current environment keeping in mind the evolution of Google Ads in the last few years: ROAS bidding and automated bid systems have become so good that users should not manually bid.
Before designing the ad, eCommerce companies should focus more on ad relevancy, starting with the “who” and the “why” in mind. Segmentation helps you decide what audience you will target, but a compelling ad is what causes people to take action.
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