|EcommerceBytes-NewsFlash, Number 2866 - August 09, 2012 - ISSN 1539-5065 3 of 4|
Online sellers who wish to boost exposure on Google must pay for advertising through Product Listing Ads (PLA), since it is eliminating free traffic from Google Product Search. EcommerceBytes talked to three companies to find out what effect the Google Shopping changes have had on their clients and get advice on what sellers can do to adapt.
In Part 2, EcommerceBytes asked the panelists how merchants should decide which items to advertise to get exposure on Google Shopping and what merchants should know about getting exposure on Google Shopping.
Today in Part 3, EcommerceBytes asks our three panelists for specific advice about bidding for clicks on Google Product Listing Ads and how to manage their product feed to optimize their advertising efforts.
EcommerceBytes: How should merchants calculate the amount they are willing to pay for clicks? Are there any formulas they can use?
Larry Weeks (CI):Using a spreadsheet, back into a CPC (cost per click) by looking at the historical traffic on free Google per category. Then add an average CPC rate x that traffic, then divide the historical sales by the resulting cost the traffic incurs at that CPC rate you added and you will have an estimated ROAS (Return on Ad Spend). Then, adjust from there up or down based on the ROAS result you want to achieve. You will get at an estimated Cost Per Click you are willing to pay.
Frank Kochenash (Mercent): We recently published a blog post addressing this exact question. There is some valuable insight and advice here that retailers may find useful.
Mike Effle (Vendio): We suggest taking the average CPC from other comparison shopping engine campaigns, or from AdWords campaigns, to serve as a starting point. Merchants will be able to list items at bids as low as $0.01, which we recommend for visibility in a search and keeping as many of your products visible as possible.
EcommerceBytes: Do you recommend merchants create a set bid for each and every product, or should they be willing to pay different prices by grouping products by category, selling price or in some other way?
Larry Weeks (CI):All of the above could work based on the model or goal. We think a good granular sub category works well with CPA. For CPC we also bucket Adgroups and assign product bids based on product or category performance (ROAS) and dynamically change what products are in what Adgroups bids based on that performance.
Frank Kochenash (Mercent): We recommend they apply best practices we shared with attendees of our last Google Shopping webinar. In addition, they should structure campaigns into logical and optimized product targets and ad groups and bid at the ad group level (thatís the level you have to bid at for PLA).
Mike Effle (Vendio): Merchants will need to experiment with the structure of their AdWords campaigns to find the best performing approach. We suggest starting with brands and/or product categories for organizing campaigns and setting bids. Bidding per product requires extreme attention and monitoring, which may require more time than a merchant can provide.
To Be Continued
"How Google Shopping Changes Impact Merchant Traffic - Links"
In Part 1 of this series, panelists look at what changes merchants have been seeing over the past 2 months since Google's bombshell announcement and how they reacted to the news.
In Part 2, EcommerceBytes asks panelists how merchants should decide which items to advertise to get exposure on Google Shopping and what merchants should know about getting exposure on Google Shopping.
In Part 3, panelists offer specific advice about bidding for clicks on Google Product Listing Ads and how to manage their product feed to optimize their advertising efforts.
Part 4 wraps up the series by identifying the biggest challenge for merchants in coping with the changes and revealing specific strategies and tactics retailers are using as they go from free Google Product Search to the new Google Shopping platform.
About the author:
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to firstname.lastname@example.org.
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