Google Shopping ads can be a powerful revenue driver – but to get the most out of it, you need to master bid management.
Whether you’re an in-house marketer or working at an agency, effective bid management is crucial for scaling success.
However, understanding how to optimize and adjust bids effectively in Google Shopping ads can be challenging, especially with all the different settings and levers that can be pulled!
Google Shopping has come a long way since its original inception in 2022 – and up until 2012, Google Shopping was free!
It seems that every year, more is needed to win the bidding war against rising costs in the Google Ads platform and keep brands’ profitability in check.
In this article, we’ll explore the strategies, tools, and best practices that can help you win the bidding war and maximize ROI on your Google Shopping campaigns.
1. Understanding The Google Shopping Auction Model And Its Impact On Bidding
Before we jump into bid management strategies, it’s essential to understand how Google Shopping works behind the scenes. Unlike Search campaigns, Google Shopping doesn’t rely on keywords to trigger ads.
Instead, product listing ads (PLAs) appear based on a combination of your product feed data and the user’s search intent. Google uses a unique auction system, and your bids interact with factors like relevance, user behavior, and other competitors in the space.
The Role Of Quality Score In Google Shopping
Quality Score plays a role in Google Shopping bid management, but a bit differently from Search campaigns.
Factors such as the product feed quality, landing page relevance, and historical campaign performance can influence how often your ads appear and at what cost. Here’s how to ensure you’re optimizing for Quality Score in Shopping:
Product Feed Optimization: Ensure that your product titles, descriptions, and attributes are clear and relevant.
Accurate Categorization: Place your products in the most appropriate categories for better relevance.
Optimized Landing Page: Make sure the page that users land on after clicking the ad is optimized for a better user experience, and don’t forget about mobile!
How Bid Amount Affects Visibility
Higher bids don’t always guarantee visibility, and low bids don’t always exclude you from auctions.
It’s a balance of ensuring your product feed is optimized while bidding strategically based on the product’s potential to convert.
Bidding strategies should reflect the actual performance of your products and overall business goals related to those campaigns.
2. Craft A Strategic Bidding Approach
One of the first decisions you need to make when managing Google Shopping bids is whether to rely on manual or automated bidding.
Both approaches have advantages depending on your business objectives, campaign budget, and the scale of your operations.
Manual Bidding: This gives you more control, allowing you to adjust bids based on performance. For example, if you notice that certain products are underperforming, you can reduce their bids to allocate budget to higher-performing products.
Automated Bidding: Automated strategies like Maximize Conversion Value or Target ROAS (Return on Ad Spend) use machine learning to adjust your bids dynamically based on real-time auction signals. These can be ideal for large product catalogs or when performance data is inconsistent across different products.
Google has added more automated bidding strategies over the years, making it easier to effectively bid based on your business goals.
However, the added complexity of choosing Standard Shopping campaigns versus the newer Performance Max campaign type allows for different bid strategies.
If choosing Standard Shopping campaigns, you have the option of these two automated bid strategies:
Maximize Clicks: Helps you get as many clicks as possible within your target daily budget.
Target ROAS: Helps you maximize conversion value while reaching an average return on ad spend that you choose.
Screenshot from author, August 2024
If you choose to set up a Performance Max campaign with your product feed linked, you have the option of more bid strategies:
Maximize Conversions: Helps generate the most amount of conversions within your daily budget, regardless of conversion value.
Maximize Conversion Value: Helps generate the highest conversion value within your daily budget.
Additionally, Performance Max campaigns have the optional “Target ROAS” input to yield a little bit more control over your campaign bid strategy.
Lastly, you now have the option to choose how to bid for acquiring new customers – a very welcome addition to further maximize those ad dollars!
In Google Ads, you can choose to either bid higher for new customers than existing customers. Or, you can bid for new customers only.
Screenshot from author, August 2024
For Google Shopping campaigns specifically, you may want to choose to bid higher for new customers instead of excluding them altogether, especially if your brand is used to having repeat customers.
This essentially means you’re willing to pay more to get a new customer, knowing they will likely purchase again in the future, leading to incremental revenue.