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When Product Listing Ads (PLAs) first arrived on the AdWords PPC scene, many retailers were content with simply setting them up and letting them run. If this is still your outlook then it might be time to take a new approach because times are changing!
Regular PLA campaigns are retiring and are being replaced by shiny new Shopping campaigns. This post looks at why ecommerce businesses can no longer afford to ignore AdWords Shopping campaigns.
There is no denying that PLAs are now the most dominant ad format on product related searches. From the traditional PLA format on the right hand side of the screen, to top of page shopping results, PLAs take up the priority ad space in most product searches:
It’s natural for users to be drawn to these product-centric ads as it gives them more information than a standard text ad could, so if you’re not optimising this ad format pro-actively then your ecommerce site will be missing out on your share of this advertising space.
It’s not just about the advertising space though, as PLAs often convert at a higher rate and can be more cost effective. In my experience many ecommerce sites I work on are seeing around two thirds of their conversions coming via PLAs, and they are often the best value conversions (if their PLA campaigns are being optimised and well looked after).
Regular PLA campaigns are being retired at the end of August, and are being replaced by shiny new Shopping campaigns. There are many pros and cons to this change, but that is a whole different blog post so I won’t go into all of those those now. One of the key changes is the introduction of Benchmark CPCs – this means you really can no longer afford to take the ‘set up and leave them’ approach.
AdWords says Benchmark CPCs are based on the CPCs of other advertisers who are bidding on similar products. The issue with making this data visable within PPC accounts is that those less savy advertisers will assume this is what they need to bid in order to remain competitive and as a result PLA advertising costs will probably start rising at a faster rate than previous.
Be wise with this metric – it is a nice insight but it’s important to consider how honest Google are being with their ‘benchmark’ and what they consider to be ‘similar products’. When all is said and done you should bid based on that product group’s conversion rate, revenue and ideally profit margins. Never bid more than what is cost effective for your products.
Let Google Automatically Upgrade Your PLA Campaigns? Er No!
You might be thinking ‘it’s okay – if I don’t have time to do upgrade before the deadline they’ll just upgrade them for me’. This is a dangerous approach.
Depending on how your PLA campaigns are currently set up, you may lose some of your structure or targeting. For example, if you use AdWords labels in your product target or inventory filters, you need to update your data feed with custom labels which replace AdWords labels. If you don’t do this they may revert to more general targeting based on the attributes that are available.
When PLAs were new, many advertisers split out their campaigns based on the different brands they stock, or the category of product. This allowed them to create a bidding strategy based on those criteria which are part of your product feed as standard.
These days, many more advertisers are taking a more advanced and granular approach to their bidding strategy. They’re using custom labels (these were called AdWords labels in the old PLA campaign type) in their product feed, to allow them to split out their campaigns based on custom labels such as ‘high, medium or low revenue’ or ‘high, medium or low profit’. This means that when they segment their campaigns they can group their products and set their bids based on these factors which are the key elements we really need to be optimising for if we want to make our campaigns cost effective. Other examples of using custom labels to tailor your bidding strategy might be to label high or low stock products that you’re keen to push, or even products with high or low return rate – so you can see that even if a product is bringing in lots of revenue, you may actually have a 40% returns rate on it. This way you can set bids and allocate spend accordingly.
You need to start using custom labels if you want to make your campaigns truly cost effective in this increasingly competitive advertising environment.
There are some more advanced settings that come with the new shopping campaign format. For example, you can set campaign priorities to tell Google which of your shopping campaigns they should prioritise. This setting needs to be used carefully so that you don’t end up accidentally bidding on the same products within two campaigns (for example, a sale campaign and a regular campaign). Read up on the new settings and features and make sure you optimise them in-line with your strategy rather than just leaving them to default.
Product Listing Ad uptake is continuing to grow, with advertisers expected to allocate 33% of their entire paid search budget towards PLAs by the end of 2014. This staggering fact means that competition within this ad format is only going to become more fierce, which ultimately will drive costs up for those who aren’t using it strategically.
If all of this sounds a a bit daunting, or you simply don’t have time to upgrade or optimise your PLAs or Shopping campaigns, we are here to help! Whether you’re looking for a one-off audit to make sure everything is on-track since your upgrade, or ongoing PLA management, get in touch and we’ll soon have your shopping campaigns more cost effective than ever before!
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