For higher-ticket items that users may only purchase once every few years, it may be worthwhile to choose ‘bid for new customers only’.
At the end of the day, make sure to choose the customer acquisition strategy that aligns with your business goals.
Segmentation And Granularity In Bidding
A key component to effective bid management is to segment your campaigns and ad groups properly. This allows for more granular control over bids and enables better performance optimization.
Product-Level Bidding: Rather than bidding at the campaign or ad group level, product-level bidding allows you to adjust bids based on each product’s unique performance metrics. Products that generate more conversions or revenue should receive higher bids, while underperforming products can have bids scaled back.
Segment by Profit Margin or Price Point: Grouping products based on their profit margins or price points can help you adjust bids based on the product’s value to your business. High-margin products may justify higher bids since they offer better ROI.
Seasonality and Time Sensitivity: Adjust bids based on trends in user behavior throughout the year. For instance, products may perform better during certain seasons or promotional events, requiring temporary bid increases.
3. Use Your Own Data & KPIs To Inform Your Bid Management
Knowing which metrics to monitor is critical for making informed bidding decisions. Below are the core KPIs to watch closely:
Cost Per Conversion (or CPA) and Return On Ad Spend (ROAS): These two metrics provide insights into your campaign’s efficiency. You want to identify which products or campaigns have the highest ROAS and optimize bidding for those.
Impression Share and Click-Through Rate (CTR): These metrics can give you a sense of how your bids are affecting visibility. If you’re seeing low impression shares on profitable products, it may be time to increase your bids.
Conversion Rate: Analyze conversion rates to identify which products are most likely to turn clicks into sales, then adjust your bids accordingly.
Lifetime Value (LTV) and Customer Acquisition Costs (CAC): If your business has repeat purchases, focusing on lifetime value can give you an advantage when bidding on products that may have lower immediate returns but higher long-term value.
Knowing these KPIs for your business can help shape your bid management strategy and make strategic changes based on your Google Shopping performance in comparison to your business’s set KPIs.
For example, if you have an average conversion rate of 4% as a whole, but your Google Shopping campaigns are only providing a 2% conversion rate, that may tell you something needs to be optimized.
You may need to take a look at the keywords your products are showing up for and do some negative keyword management. Additionally, maybe your ads aren’t reaching the right users and you need to further refine audience targeting within your campaigns.
Another example of using your own data is knowing your profit margin for products. If you have a subset of products that have a high-profit margin, you can add a custom label into your product feed that denotes those products.
From there, you can segment your campaigns to have a higher priority on those particular products or choose to bid higher on them because they’re worth more to you and your business.
Leveraging Bid Simulators And Other Tools
Google also provides several tools that can help inform your bid decisions:
Bid Simulators: These help you understand how different bid levels would impact your impression share, clicks, and conversions. You can use this data to adjust your bids in a way that maximizes your return without overspending.
Custom Labels: By using custom labels in your product feed, you can segment your products by performance, seasonality, or promotion. This way, you can quickly adjust bids based on these factors.
Scripts and Third-Party Tools: Tools like Optmyzr or custom Google Ads scripts can automate bid adjustments based on performance data, allowing you to focus on strategy rather than manual labor.
4. Optimize Your Bid Management For Long-Term Success
Bid management is not a “set it and forget it” exercise. Continual testing, analyzing, and adjusting are necessary to maintain and improve campaign performance over time.
Bid management should also not be used for daily volatile changes at the campaign level.
If you’re micromanaging performance each day and changing bid strategies too often, you may end up with sub-optimal performance because you’re not giving Google enough time to learn and optimize based on performance.
It’s about finding a healthy balance between “set and forget” and “over-optimizing”. Going back to point #3, knowing the values of your core business metrics and goals makes it easier to react to performance swings and know when to take action.
Some ways to optimize for long-term success include:
A/B Testing on Bids: Running A/B tests on bid adjustments allows you to assess the impact of bid changes without risking your entire budget. Test different bidding strategies on subsets of your campaigns or products to see what delivers the best performance.
Seasonal Adjustments: Stay ahead of trends by adjusting your bids before key periods like Black Friday or holiday shopping spikes. Predictive adjustments can help you capture market share before your competitors ramp up.
Monitor Competitor Behavior: Keep an eye on your competition. If you notice that competitors are aggressively bidding on certain products, you may need to adjust your strategy to compete, either by raising bids or adjusting product listings.
Prepare For Future Changes In Google Ads
Google Shopping is constantly evolving, and as machine learning models become more sophisticated, the way bids are managed will continue to change.
Staying informed about new features, tools, and best practices will help you maintain a competitive edge. Subscribe to updates, attend industry events, and engage with the community to keep your knowledge fresh.
Summary
Google Shopping bid management requires a balance between data-driven strategies, an understanding of the auction system, and a willingness to experiment and adapt.
By leveraging the tips and strategies discussed in this article, you’ll be better equipped to navigate the complexities of Google Shopping and drive profitable growth for your brand or clients.
Keep refining your approach, test new strategies, and stay on top of Google Shopping developments to stay competitive and ahead of the bid war.
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