AdWords + E-commerce: How To Make It Work
Last week I was lucky enough to present for SEMRush, covering best-practice tips to get your e-commerce campaigns performing without having to ‘spend the world’. For those who missed the webinar, here are my top tips for boosting your AdWords e-commerce performance.
1. Campaign Structure
The structure of your campaigns is perhaps the most fundamental aspect of any paid search account, meaning it needs to be done right from the get-go. If your overall account structure is not sound, your campaigns are likely to underperform.
What Not to Do:
Don’t group all your products, keywords, mediums and geographic locations under a single campaign. This severely limits control over your account due to the inability to adjust bids and budgets in relation to seasonality and online trends. This also limits your ability to prioritise performing areas, customers and product categories.
Granularity is key! Split your campaigns out by objectives, themes and geographic locations where applicable.
If you’re running Google Shopping campaigns, this tactic can be replicated here. Google Shopping has 6 key attributes that you can break your products out by within Adwords (see below). By splitting your product groups out by attributes such as Product Type, Brand, ID or custom labels, you can influence the control you have over budget allocation or the amount you are willing to pay for certain products within your feed.
2. Determining the ideal spend
Your campaign spend will determine what percentage of your target market you will be eligible to reach (i.e. show ads to) with your campaigns. Your aim here is to achieve maximum exposure while being cost-efficient.
The basic rule of budget allocation is to allocate your available spend where performance or overall contribution is strong (low CPA, high return) and where these campaigns are limited by budget. However, if you wish to get a little more granular with your spend tactics, here are some advanced tips.
It is important to look at how your AdWords campaigns are working together with your other marketing channels to determine their value to the overall marketing mix. Run the Google Analytics Assisted Conversion Report to gather this insight. An assisted conversion occurs when a user clicks through from the medium in question at some stage during the purchase cycle before later returning through another medium to finally convert on your website. To access this report, navigate to Conversions > Multi-Channel Conversions > Assisted Conversions. Follow the below setup guide to ensure you are removing any duplication in the report.
The outcome of analysing attribution data is that you can now begin to make informed decisions as to how to improve your e-commerce performance. Some actionable examples may include:
- Increase budget allocation towards AdWords if the medium is generating a high volume of additional conversions through other mediums
- Increase bids across keywords that may not be generating a high volume of direct conversions but are critical in introducing customers to your brand or providing valuable information during the research process that eventually leads to a conversion
- Increase bids across non-branded terms that may be driving your branded searches and transactions for both paid and organic results
- Increase budgets and bids across campaigns and keywords that are generating value over longer periods of time through last-click remarketing transactions.
Look at what impression share is most profitable for your brand and use this to benchmark your maximum spend. Looking at the example below, the account CVR and CTR increase when the search impression share increases. Using the following formula, you can make a carefully estimated calculation as to how much spend you may require to maximise your exposure while also boosting your products.
Required Spend = Current Spend/(Ideal search impression share – Current Search Impression Share)
Use Day Parting
Just like physical retail stores have operating hours where customers visit and purchase items for sale, so too does your online store. You will generally find that there are certain time periods or days of the week where your website is likely to see higher traffic and online transactions. It therefore makes sense that your campaigns are tailored around these times. Gather this data by navigating to the ‘Dimensions’ tab of your AdWords account or campaign. Under the View dropdown menu, select Time > Day of the Week or Hour of Day.
When considering traffic, always be sure to think quality over quantity. This will be the fastest way to boost sales and drive down costs. Avoid over-investment in research terms (e.g. generic terms) and focus on building out keyword lists for product- and brand-related terms. Users who type a specific product name or model are more likely to be nearing the end of the buying cycle, which means they may be more inclined to buy from your website. The revenue that these terms may generate for your brand is likely to offset the low traffic volumes that these types of keywords often attract.
Also, include your own brand name as a keyword within your campaign. If you’re running additional marketing activity, customers are likely to search you out directly. By the end of the buying cycle, users may be more inclined to return to your website through a branded search.
4. Optimisation and Achieving ROI
The ROI of your campaigns will depend heavily on the rate at which you are converting your traffic and how much you are paying for each of those conversions. No keyword performs the same. As you begin to collect data across your campaigns, you will begin to notice that each keyword costs your business a certain amount and produces a certain profit for your business.
Set ceiling bids for each keyword within your account to ensure you’re not paying more than you can afford. For cost per conversion/transaction (CPA) e-commerce accounts, use the following formula to determine what your Max CPC bid should be:
Max CPC = Conversion Rate of Keyword X CPA Goal
Example: You run an online clothing store and have a set CPA target of $50 per sale of shorts-related products. You have two keywords in your account targeting this category that convert at different rates:
- ‘Buy Shorts Online’ converts at a rate of 2.53%
- ‘Shorts Sale’ converts at a rate of 0.67%
Based on this data, you can bid up to $1.26 for the keyword ‘Buy Shorts Online’; however, for the latter you should be bidding no more than a Max CPC bid of $0.33 in order to maintain your CPA targets.
For ROI-based e-commerce accounts, use the following formula to determine what your Max CPC bid should be:
Max CPC = (1/ROI% Goal) X (Avg. Order Value of Keyword X Transaction Rate of Keyword)
Example: Let’s look at the same store and product category above. However, this time, let’s factor in the average value per sale that each keyword is generating for your brand and assume the company operates on an ROI target of 180%.
- ‘Buy Shorts Online’ converts at a rate of 2.53% and records an average sale value per transaction of $25.00
- ‘Shorts Sale’ converts at a rate of 0.67% and records an average sale value per transaction of $97.00
Based on this data, you can only bid up to $0.35 for the keyword ‘Buy Shorts Online’. In comparison, you can bid up to $0.48 for the keyword ‘Shorts Sale’ given that this term is worth more per sale for your brand.
There you have it: 4 tips on how to boost your e-commerce campaign performance. Want to clarify a point or discuss something here in more detail? Get in touch with our team for a chat.