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Advanced Strategies to get your Google
Shopping Campaigns to the Next Level
Andreas Reiffen – CEO @ crealytics
Prague, Czech Republic
January 30, 2018

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Topics we‘ll cover today …
• Show how Google steadily
increased the share of
product ads
• How will Shopping develop
in the future?
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Semantic Advertising TechnologyEcommerce Expo Prague 2018
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• Taking a variety of factors
into account makes bidding
on Google Shopping difficult
• What do you have to
consider to successfully
optimize your bidding?
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• Advice on Google Shopping
campaign structure
• What is the right way to
structure your Shopping
campaigns?
Google Shopping
global market insights Advanced strategiesGetting the basics right

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Google Shopping – Global Market Insights
Semantic Advertising TechnologyEcommerce Expo Prague 2018

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Google Shopping spending already surpassed
text ads in in all markets
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DE
spending share
US
spending share
UK
spending share
58%57%
H2 16
43% 42%
H2 17H1 17
55%
45%
H1 16H2 15
67%
45%
55%
Text Ads Shopping
H2 15
48%54%
52%
36%
H1 16 H1 17
38%
60%
66%64%
H2 16
40%
H2 17
46%
H2 17
31%
68%
35%
H1 16
69%
H1 17
32%
H2 16
65%
H2 15
63%
37%
49%
51%

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UK: 74% of mobile PPC budget is spent on
Google Shopping
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63%
37%
26%
74%
Shopping
Text Ads
Desktop Mobile
Mobile is much more profitable
in Google Shopping which
leads to higher spending
Shopping was the main reason
for mobile surge in 2016/17
Spending shares in H2 2017 Insights

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More clicks for cheaper CPCs
Is Google Shopping getting even more attractive for advertisers?
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CPC decreased by 21% while paid clicks expanded
by 55%
Shift to mobile is reason for declining CPCs as mobile
CPCs are still less expensive
The deflation of CPC also indicates that there is
temporary excess of auctions where advertisers can
lower their CPC and still are able to spend their
budgets
This sounds like a great story for advertisers, you get
more valuable clicks for cheaper CPCs
However, this would be only true if you don’t pay for
clicks that have been free in the past and if you don’t
pay twice for the same users
https://abc.xyz/investor/pdf/2017Q3_alphabet_earnings_release.pdf
Lorem ipsumAlphabet investor report Excess of auctions leads to lower CPC?

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In 2013 product ads were displayed underneath
the top text ads
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SERP layout Screen shot
http://www.cpcstrategy.com/blog/2013/07/google-16-product-listing-ads-serps
http://www.business2community.com/online-marketing/google-shopping-merchant-center-step-by-step-setup-guide-0371869#

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In 2014 Google made a big change and placed
product ads on top of the text ads
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SERP layout Screen shot
https://www.searchenginejournal.com/breaking-google-changes-serp-images-king-ppc-holds-key-kingdom/80455/

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In 2015 Google started to show eight product ads
in the right side rail
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SERP layout Screen shot
http://certifiedknowledge.org/blog/the-complete-adwords-audit-part-12-google-shopping-campaigns

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In 2016, Google eliminated text ads from the side
rail
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SERP layout Screen shot
https://ambergreeninternetmarketing.com/blog/what-the-adwords-just-happened-to-googles-serp

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2017 developments show nine even larger
products on the side
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SERP layout Screen shot
https://ambergreeninternetmarketing.com/blog/what-the-adwords-just-happened-to-googles-serp

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Google‘s rationale: Product ads are more
attractive for the user and generate more revenue
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3 product ads have roughly the (pixel) size
of one text ad or organic listing
More than double the revenue for Google
per pixel ad space (mobile example)
= RevenueCPC
+28.0%
+126.0%
Aggregated CTR
+77.0%
Google still puts the “user first” and promotes search
results that he likes. Images are more attractive
Those are paid results with high CTR

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Getting the Basics Right
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Google Shopping account structure
The optimal account structure depends on your size and your goals
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We usually use brands as campaigns
Product categories/types become ad groups
Products are grouped in a single product group within
an ad group
We split out products once they hit a certain threshold
of clicks (e.g. 10 clicks)
Lorem ipsumDifferent account levels How does it work?
Product
Group
Product
Group
Product
Group
Product
Group
Product
Group
Product
Group
Product
Group
Product
Group

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How to optimize your product feed
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Comply with Google Shopping
guidelines
Check your product feed regularly
Enable notifications
If products get disapproved, check
the disapproval reason to identify
mistakes in your data
Increase the relevance of your
product feed to improve your
Google Shopping performance
Name products in a way people
search for them
Do not “over-optimize” titles to
avoid they differ too much from the
landing pages
Use the available space
Differentiate your products from
competitors’ products
Include product ratings
Never stop optimzing you product feed!
Highlight your USPOptimize feed contentAvoid disapproved products

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Introduction to Audience Targeting
Targeting the right consumers will save you a lot of money
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Why targeting? Targeting possibilities
Allows you to adjust bids according to conversion
probability of audiences
Possibility to align campaign specifically to a distinct
target group
Reduce wasted ad spend
Performance improves as chance for conversion
increase
With increasing specification the amount of
people/traffic declines
Situation of usage
• Device (Mobile, Desktop, Tablets)
• Language
• Countries/Location
• Time/Day
Targeting group
• Former interactions (visits, cart abandoners,
purchases)
• Demography (age, gender)
• New Customers
• Existing Customers

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RLSA & Customer Match
Increase profitability by targeting a well-known user group
Semantic PPC Advertising Technologycrealytics presentation
Target customers based on previous interactions
with your website
Create remarketing audience groups in AdWords
• You need to add the remarketing tag on every
website, it collects users and adds them to a
certain list
Common RLSA strategies
• Probability – bid higher on audiences which are
likely to convert / lower bids for non-converters
• Keyword strategy – bid on terms that are
performing well in general
• ‘Head Term’ Campaign – to reach users who have
been on your site already, you can bid on generic
terms like ‘fashion’ or ‘sale’
RLSA (Remarketing Lists for Search Ads) Customer Match
Target (or exclude) people based on their email
addresses
• Advertisers have to upload customer email lists
into AdWords that can be matched against
signed-in Google accounts
Top Strategies for using Customer Match
• Profitability – reduce bids for customers with a
low average basket value
• Reach – use similar audiences to target
additional prospective customers
• Reactivation – promote a special offer to
customers who have gone cold as an incentive
for re-engagement
• Upselling – use complimentary product
information to upsell to customers who have
already bought

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Advanced Strategies
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Impressions before / after Key insights
0.6 0.7
bid = 0.50
5.4
2.1
1.3
bid = 1.50
0.4
4.3
designer only termdesigner termsgeneric terms
On Google Shopping, you bid on
products, not keywords
When you raise bids, a product
starts to behave like a broad
keyword
The designer-only term, chi chi
london, is stable in impressions
CPC for the same queries
increased by +186%
Spike in generic queries affects
traffic quality and ROI
CPC
0.22
0.09
0.40
0.85
0.63
0.25
(k impressions)
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Increase of all Chi Chi London bids by 200%
What happens after increasing bids by 200%?

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Birkenstock
Arizona Black
1,127
0.50 1.50
1,018 +11%
0.750.36
204
5,534
0.50 1.50
+2,613%
200
1,500
+650%
0.50 1.50
0.720.28
CPC
0.760.29
Impressions
Bids
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We raised bids by 200% and evaluated traffic
Chi Chi London
Lace Midi Prom Dress
Diesel
(Designer)
These results do not seem
consistent at all. And now?

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740,0
4,400
204
actual
increase
cannibalised
impressions
+363%
5,140
nominal
increase
baseline
0.720.28 0.30
Net impression increase (after cannibalisation) Explanation
Higher bids attracted the
generic query, birkenstock,
that matched to other products
before.
A large part of traffic increase
was internal cannibalisation.
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Impressions increase on the product
… but cannibalize search query impressions of other products

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Budget
Revenue
Bidding
Bandwidth
Overbidding
Search
Shopping
Shopping - specific bid management
Shopping Efficiency Curve Explanation
Crealytics uses machine
learning to identify the ideal bid
range for each product listing
From a certain bid level, traffic
increases very quickly – at very
high bid levels, traffic will
plateau
The challenge for bid
management is to stop bidding
up when you reach the plateau

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Optimize for the right KPIs
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Ineffective, short-sighted budget allocation
Optimizing campaigns for new customer acquisition yields better results
10
13
3
First purchase
revenue
Repeat purchases Total revenue
after one year
9
15
6
Repeat purchases Total revenue
after one year
First purchase
revenue
Short-term Focus (ROAS) Long-term Focus (CLV)
Advertisers who focus on LTV make about 15% more
revenue in the first year.
$1M
Advertising
Budget

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To optimize your advertising campaigns you
require an advanced set of target KPIs
Ecommerce Expo Prague 2018
Every order is treated
equally, no matter
whether the order value
is high or low, margins
and new customers
estimated based on
averages
Focus on revenue without
taking into account that
different products have
different margins
Products with high
margins are promoted
more aggressively,
repeat purchases from
new customers are
ignored
Lifetime Value
optimization takes into
account exact margins
and repeat purchases
from new customers
Low Data Quality High Data QualityHigh Data Quality
Semantic Advertising Technology
CLV
CLV ROI
Profit
ROI
Revenue
ROAS / COS
# Orders
CPO

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Search Query Segmentation
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Shoes
Nike
+
Shoes
Nike
+
Mercurial
Typical differentials
Nike Mercurial Superfly V FG
Sportswear Men Platine
Nike Mercurial Superfly V FG
Sportswear Men Platine
$202.99 from Nike
$202.99 from Nike
Soccer Shoes
Nike Mercurial Superfly
B)
A)
$1.00
Campaign segmentation
With Google Shopping money is wasted on generic queries
Identical product search, but different query
intent Compare conversion rates by specificity
1.4x
Brand
+
Category
Category
2.5x
Brand
+
Name

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Chanel
Timeless
Purse
Product Names
Brand/Designer
Names
Generics
N/A
High
Medium
Low
Catch All
Generics
Designers
Purse
Chanel
Purse
Chanel Timeless
Clutch
Varies
Automated Campaign Segmentation
Crealytics automatically funnels traffic into campaigns based on intent
Product PriorityCampaign Bid AmountNegatives

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Incrementality
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What is the true value of RLSA campaigns?
Google‘s retargeting campaigns are barely incremental
Do not believe the numbers until you have challenged
them!
Excessive use of RLAS
• Results look good on paper and nobody likes to
challenge the data
• Even if RLSA is not explicitly done, website
visitors are always automatically being retargeted
• Some smart advertisers bid low on RLSA
Inflated value attribution
• Overestimating the contribution value of
remarketing campaigns
• We expect incrementality to be at about 20%
Understand that segments which show the
highest efficiency are usually the ones with the
lowest incrementality
Test the results of your RLSA campaign to see the
actual value contribution
Common mistakes Strategies for improvement

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The Role Of Price
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0
20
40
60
80
100
120
0
5
10
15
20
25
30
35
40
45
50
55
Price
+5%
clicksown price
Days
Clicks
Price
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Google Product Category:
Apparel & Accessories > Shoes
> Sneakers
Brand:
5% price increase coincides
with a 60% decrease in clicks
Price as an algorithmic signal
Changes in pricing can massively impact your PLA performance
Clicks drop off after product price increase Chart Info

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Products priced 5% lower than
market average
Products priced 5% higher
than market average
1826
2047
134% 135% -29%
61% 280%
Impression
Volume
Clicks CPO
Conversion
Rate
Conversions
To succeed include price as a signal
Google includes price competitiveness as an algorithmic signal
Pricing compared to
market average Lower priced products drive performance
Bidding high on products which are not priced
competitively is a waste of money.
(# products)

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Crealytics incorporates pricing information into
bidding