By: Heidi Hammond

How to Increase your Shopping Campaigns’ ROAS Overnight

August 10, 2016

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Your first attempt at tackling a shopping campaign may have you thinking, “This is too easy!” After all, compared to certain other campaigns everything seems pretty straightforward—subdivide your categories, optimize your bids, and presto! You’re set.

But while shopping campaigns may seem inherently simple, they belie a secret complexity—one that savvy users can take advantage of. Simply put, if you’re enjoying the simplicity of setting up your shopping campaign, then there’s a good chance that you’re missing out on some huge opportunities. Well, don’t worry; we’ve got you covered. As you get going on your shopping campaign, try these advanced strategies, and see what it’s like to take your account to the next level.

Switch to Automated Bidding

As soon as you have enough conversions, you should try switching to an automated bid strategy targeting a certain return on ad spend (ROAS). This is extremely helpful when you have hundreds or thousands of products to manage. The system uses historical revenue data and can fluctuate bids much more quickly and efficiently than a person ever could. I’ve found that with this system, within a few days we were hitting our ROAS goals—and the results weren’t half-bad, especially considering that the account was brand new, and had not yet hit profitability.

Total Revenue Increase = 17%

ROAS Increase = 25%

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Make sure you are aware of the following when switching to an automated strategy:

  • Don’t set a goal too high above your current ROAS. If you make the mistake of setting your goal too high, the system could shut down your bids while it calibrates to your request. Instead, set your goal about 20–40% higher than your current ROAS, the when you hit that goal, jump another 20–40% from your current performance.
  • Don’t combine strategies. Be careful when setting multiple Ad Groups under the same ROAS strategy. When doing so, I’ve found that the system would target the median ROAS between all Ad Groups, meaning one group could hit 200%, while another would hit 100%. As a result, the system would call it good for the goal of 150%. Because of this, setting a different strategy for every Ad Group is a more-accurate approach.
  • Set proper expectations. If you were previously spending more than you were making, you will most likely see revenue go down, while achieving a higher ROAS. You can see in the target efficiency graph below that there is a sweet spot for profitability, so don’t be upset when you’re losing revenue—this is the first step to making your money back. You can focus on scaling your campaigns later.

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Set up Campaign Priorities

Setting up campaign priorities is by far the best Shopping strategy I have used. The idea is that you want to bid more for certain keywords than for others, right? But in Shopping campaigns you can only bid on products. You can find your way around this using multiple campaigns and negative keywords.

Start with your original campaign, which is most likely set to a ‘high’ priority. Then, set up a campaign with a ‘low’ priority, and add your highest converting search terms (we used branded terms) as negatives to your high-priority campaign. Those search terms will funnel to the low-priority campaign where you can then set higher bids. This strategy can save you as much as 20% on costs, and allows you to bid more on your high-converting keywords.

Results? We were impressed. Our branded campaign’s ROAS more than doubled our generic campaign’s ROAS right from the start.

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Campaigns such as this can be time-consuming and meticulous to set up, but the results are amazing. Here are some tips to help prevent any mistakes:

  • Do Your Research. Don’t just assume certain keywords convert better; you don’t want to set up an entire campaign, just to find out that those searches don’t actually perform as well as you are expecting.
  • Be Careful with Negatives! If, prior to this, you’ve added many negative keywords that you don’t ever want to show up for, remember that now all those negatives are heading to this secondary campaign and receiving an even higher bid. Copy all your original negative keywords to the ‘low’ priority campaign before going live.
  • Use Manual Bids. Don’t use automated bids for your secondary campaign. The whole point is to bid more than your original campaign, and you can’t risk letting automation bid too low. In the above example, I set a very high manual bid and achieved fantastic results.

Since implementing these strategies, we haven’t looked back. If you haven’t tried these yet, do it now! You will be sure to impress your clients, while also undercutting the competition.

Written by Heidi Hammond on August 10, 2016

Heidi Hammond is a PPC Analyst at 97th Floor.

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