How to maximize ROAS on Google Shopping ? – Guide to Managers

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How to maximize ROAS on Google Shopping ? – Guide to Managers
Ramesh Karki | January 26, 2022
|READ 12 MIN
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Google Shopping Ads are a crucial channel for e-commerce stores that drive tons of traffic and sales. This type of ad shows the product image, product title, and price alongside special offers, reviews, and other google shopping ad extensions & annotations that make it easier for a customer to find the right offers they are looking for. Certainly, customers in their messy shopping journey refer to Google to find products they are searching to purchase. Google also gives this important space in their SERP results for this ad type for customer e-commerce-related search queries. Around 85% of eCommerce search query ads of this ad type are seen above the fold. Therefore, this ad type is very popular among customers and retailers can expect consistent returns from this ad type. Due to this high level of effectiveness, all online retailers including e-commerce giants like Amazon and Walmart have spent huge dollars on this platform making this a super competitive retail e-commerce advertising option hence difficult to maintain a good average ROAS.

Never Settle for Benchmark ROAS

There is no clear answer for what is good ROAS in Google Shopping. As Google is such a huge market and an ultra-competitive and dynamic ad platform; 2:1 ROAS is the suggested benchmark on this platform. But the way to move forward on this platform is to have the intent of progressive ROAS in mind based on your campaign goal, sales target, and gross margin. The extent of competition in this channel kept fluctuating on this platform by country, region, city, postcodes, devices, and time hour, so it is very important to be a smart operator to score high ROAS on this platform. There are also plenty of opportunities for retailers who operate with a higher degree of intelligence in the market.

While Google gives many reports, automated functions, and features in this platform for advertisers to optimize their ad performance. Features like Growth focused smart bidding to reach the Target ROAS or Target CPA is advised for higher conversions, and improve Google Shopping ROAS with a lower cost of their campaigns. But Marketers lack granular and in-depth insights into the competitive landscape & factors affecting their ad performance. With GrowByData Marketing Intelligence marketers can get a deep understanding of various factors saturating your ROAS. The in-depth visibility and analytics of your and your competitor’s ads from various macro and micro dimensions give you solid marketing strategies to find shopping optimization factors in current campaigns, surface new opportunities and reduce the cost to boost ROAS.

How to improve Google Shopping ROAS?

Here are various steps to optimize your Google Shopping Feeds and maximize ROAS.

1. Deep Visibility Analytics Along with Your Competitors

As a manager, the first step to improving your ROAS is knowing and understanding your brand’s visibility in the marketplace. You need to constantly analyze your and your competitors’ visibility on several levels to optimize your ROAS:

  • Understanding Geo-Visibility Analysis
    Understanding your visibility by country, region, city, or at a postcode level tells you where you should and shouldn’t be spending your advertising budget. You can also analyze your competitors’ geo-visibility which can help you decide on which country, region, or area to spend on your ad campaigns.
  • Seasonal Visibilities i.e., Understanding Keyword Demand
    This is a crucial step to understanding what keywords to run Google Shopping ad campaigns on during a certain time of year, month, or day. Marketing Intelligence analyzes the keyword demand trends and helps you optimize your visibility by providing insights on the right keyword to spend on during the optimal time to maximize your ad spend. For example, the graph below shows the different seasonal trends of various shoe types. Ad campaigns should be run accordingly to maximize Google Shopping ROAS.
    seasonal online demand of shoes
  • Intent-Based Visibility
    To maximize ROAS on Google shopping, your visibility across the shopper journey is imperative. As a brand, showing up on the interest, consideration, and conversion stage keywords increase your chances of winning sales, thus optimizing your ROAS. The table below shows that if there are attributes like sale/cheap on the search then over 85% of the listings were in the lower price range ($0-$50) but searches with best had only 15% of the listings in this range and over 50% of the listings were in the highest price range.
    Intent Based Visibility to Google Shopping keywords
  • Analyze all Dimensions of Visibility by Product & Product Categories
    Marketing Intelligence allows you to see which product ads are performing well on what SERP features. It also provides insight on what keyword or product has the most competition for visibility to help you make more informed decisions for Google Shopping ad campaigns.
  • Analyze New Market or Potential Market Based on Existing Customer Location
    Managers need to keep analyzing visibilities and audiences to smartly optimize google shopping and mobilize your ad budget and boost your ROAS. If you dig deeper into the market, find new opportunities & optimize the existing market you can keep optimizing your ROAS. Analyzing your competitor’s visibilities in potential areas can provide you with insight on whether to invest in that market or not. It could also let you know what the currently existing keyword demand is in an area providing you a leg up going into new markets.
  • Analyzing Anomalies and Threats in the Market
    Just like its mentioned in the previous point, a possible outcome of understanding your and your competitor’s visibility in the marketplace can provide opportunity areas, it can also warn you of threats in the market.
  • Analyze Audiences and Audit your Visibility
    Insight on your visibility allows you to adjust the budget for over and underperforming markets. It also allows you to adjust your budget on specific keywords based on organic performance. For example, if your ads on a certain keyword are already above the fold (organically) you might want to mobilize budget to gain other high-value SERP space. That budget will be more fruitful on other underperforming ad campaigns.

2. Understand Gaps in Click-ability Factors

Having optimized ads for your Google shopping campaigns will help you improve your click rate and increase your chance of sales, thus optimizing ROAS. Here are a few ways to improve the click-ability of your Google Shopping ad campaigns.

  • Ensure Most Attractive Offers in Auction Matched to Shopper’s Intent
    As a manager, it is paramount to make sure you are using shopping ads extensions, labels, and annotations on your ads to get the maximum benefit on the Google marketplace.
  • Focus on Improving Quality Score
    Ad Intelligence provides you with information and insight to boost your ad performance and improve your quality score which helps you reduce your Average Cost of Sales (ACOS). Insights on your ads as well as your competitors’ ads regarding the title, image, attributes, landing URL, price, extensions, labels, special offers, etc. All the factors that help you improve quality scores and optimize google shopping feed and maximize ROAS. The graph below shows the effect of quality scores on CPC and ad rank.
    Read Our Articles on Why Quality Score is Important and its impact on Ads:
    average ad position and cpc by quality score range
  • Monitor Changes in Google SERP and Bid High for SERP Position where Google Shopping Ads appear above the fold
    The Google SERP is always changing so; SERP monitoring is very important as to know what feature is gaining popularity to not miss out on current trends. Insight into this type of data also allows you to bid higher for the SERP position where the shopping ads appear above the fold. The image below shows the above the fold google SERP components on jeans-related keywords.
  • above the field google shopping ads

3. Audit your Buy-ability Factors – Competitive Product Experience Analysis

Once brands are easily visible and you have optimized your ads for clicks, then you have to focus on the buy-ability of the product ads. This means making sure you are providing the right information to entice or influence people to purchase the product. Below are a few ways to make sure you do not lose out on sales.

  • Measure your Product Detail Page
    Product Intelligence analyzes your ads as well as your competitors and provides you a score for each product attribute. Use these scores to improve your product contents that are falling behind to improve your product experience and optimize ROAS. The images below show the PDP (product detail page) scores of the top 5 sellers of Jeans products. Data like this makes it easier to see what content you need improvements on compared to your competitors.
    pdp score comparison of Top 5 Sellers of Jeans
  • Competitive Price Intelligence to win Primary Seller Spot amongst your Exact Product Competitors
    Price is always one of the main selling factors for shoppers. Price Intelligence allows you to keep track of your prices as well as your competitors’ prices and makes sure your prices are optimized and competitive in the market.
  • Optimize Your Google Shopping Feed with Smart Product Feeds
    Make your product feeds smarter based on these buy-ability factors and build focused advertising campaigns. E.g., If your product is cheaper in the market then look to push its PLA Ads & monitor Retail Prices to find the opportunity to optimize its price.

Get our Complete Guide on Competitive Product Experience Management

In Summary

Considering the above steps, managers can take better decisions and build strategy to set up the campaigns in google shopping for analysts that meets business objectives. For retailers who are ready to take their brand to the next level, our team of experts can help you with a better feedback system to increase visibility, improve clicks, get more sales, and optimize your Google Shopping ROAS.

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