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Rocco Alberto Baldassarre

5 Profitable Bidding Strategies for Google Shopping Campaigns

Rocco Alberto Baldassarre
5 Profitable Bidding Strategies for Google Shopping Campaigns

More than in any other business, bidding strategies impact the profitability of e-commerce businesses that run Google shopping campaigns. In contrast to other businesses, margins are relatively fixed and volume matters. Here are five proven bidding strategies that exploit bestselling products, reduce budget drainers and boost the volume where it matters most.

Bid Higher on Products That Perform Well Elsewhere

The average e-commerce store has around 50-60k item IDs in shopping campaigns and retrieving the top twenty percent of bestselling products can be difficult to execute quickly on such a large scale. If your e-commerce site is getting traffic from sources besides Google shopping campaigns (such as shopping comparison sites), chances are that the same products will sell well via both mediums.

This assumption is a shortcut to choosing what item IDs should have custom bids or higher bids because Google Analytics shows what sources the profit is coming from per item ID. That serves you a large portion of your most profitable item IDs on a silver platter without any manual work whatsoever.

Bid Higher Where You Can Get Volume

The most profitable products are not always the ones that deserve the higher bid because the business can be overall a lot more profitable by getting more sales of less profitable items instead of only a few sales of highly profitable items. The idea here is that volume beats margins which is the case for the vast majority of e-commerces.

Here is a neat trick to identify item IDs that add volume while providing a reasonable cost per conversion and cost per click estimate: Look for items where the CPC is a maximum of two cents under the current bid. This is a strong indicator that volume goes up if the bid goes up.

Exclude Unprofitable Item IDs

Not all products might be profitable with Google Shopping campaigns due to high competition or other reasons. Instead of only raising the bids of profitable products and lowering the bids or unprofitable products, exclude item IDs that have never been profitable. Some unprofitable products go unnoticed because they are in categories that include products that are profitable and therefore compensate for any revenue loss. The category would show up as profitable - but it is not as profitable as it could be.

Raise Bids During Promotions

Increasing bids for product categories during promotions such as free shipping, two for one, 10% off for purchases of $50 or more, or holiday specials are a great way to temporarily increase the volume. Typically, conversion rates go up for products with special offers which results in a lower cost per conversion.

The trick here is to have an account setup that allows for custom bulk bidding per product group, meaning every product group should have its own category in Google shopping campaigns.

Custom Bids For Bestsellers

In order to use custom bids for best-selling products, the respective item ID needs to be identified. There are several ways to retrieve the most profitable products or the ones with the highest volumes. One way is to use item ID reports. Instead of generating the item ID report for more than one product category at once, create one product group per product category. The product groups can then be broken down with item IDs. Instead of having default bids for entire categories, the performance of item IDs is displayed and bids can be customized.

Any other tips? Let us know in the comments!

Rocco Alberto Baldassarre is the Founder and CEO of Zebra Advertisement, a results-oriented SEM consulting firm. Rocco consults companies with up to $5 million in PPC advertisement budgets, speaks three languages and was shortlisted as a Young Search Professional of the Year by the 2014 U.S. Search Awards.

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