In this video, you're going to learn how to do manual bidding
optimizations for your Google Shopping campaign.
This is the exact strategy that we use when we start new Google Shopping campaigns.
It allows us to get a good foundation of conversions until we scale them up to this,
this, and this.
My team and I, invented this exact strategy ourselves.
You'll find a link down below to the template that
we're going to use in this video, for this strategy.
So how does the strategy actually work?
Our manual bidding strategy means that we go into our Google Shopping campaigns,
and adjust the bids for our products on the product level.
So why would we do this?
This is because, when we start our Google Shopping campaigns, Google has no data about our products,
who would buy our products, and who to show those products to in the search results.
By adjusting our bids manually, we can tell Google to focus on specific products.
These are products that have
higher profit margins, more sales, and lower cost per conversion.
Or we can even focus on products that we have a lot of stock and we want to get rid of.
This means that we can save a lot more money that would otherwise be wasted by
Google, plus we can get results more quickly and focus on what's actually
working and generating profits for our store.
So, what's required to use this strategy?
You need four things:
1. Conversion tracking installed on your website through Google Ads.
2. Enough conversions tracked already.
3. Know your profit margins for your products, or for your entire store.
4. Switch over your campaign bidding strategy to manual.
Okay, so first you need to make sure that conversion data is set up in your account,
and conversion values and amounts are being pulled right into your account.
If you don't have it installed, and it's not pulling in accurate conversion data,
including revenue amounts, then go watch our video on how to set this up for Google ads.
We have a full guide.
I'll leave a link down below.
Go set that up, collect some conversions and then come back to this video.
Next, we need to have some conversions tracked for our campaign.
Yes, we can set our bids initially at the start, but this strategy works once we start getting
conversions, and we can start adjusting our bids based on how profitable each product is.
I recommend doing this for products that have at least 5 - 10 conversions each.
So, if you've only just started your campaign or you've only just set up conversion tracking,
that's okay, keep the campaign running until you get some more conversions.
Usually you can start this strategy about 1 - 4 weeks after starting your campaign,
depending on how many sales you've tracked.
If you don't have any conversion data you can still edit your bids right now.
Just go through your campaign looking at the product level,
and reduce the bids for products that are spending far too much, and still not getting a conversion.
What is too much?
Often, if a product has already spent 2 - 5X more than the actual product price,
then I'll reduce the bids by 10 - 20%.
I'll also increase the bids for products that aren't getting much traffic, to help them
rank in the search results, and start getting more clicks, and hopefully some conversions.
For these products here you can always reduce your bids later once you get that conversion data.
Next, you'll need to know the profit margin across your store, or for individual products.
If you're serious about running your ecommerce store, you should really know your margins.
No problem if you're still learning,
I have a full video guide taking you through calculating the profitability of your store.
I'll leave a link to that guide down below.
Lastly, you need to make sure that you set your campaign bidding strategy to manual
in your campaign settings.
If you've been using an automated bidding strategy, no problem.
Open up your campaign, go to campaign settings, go down to the bidding strategy,
and change this to manual.
If you've been using a Smart Shopping campaign,
that's unfortunate because we can't use any of that existing data,
so you'll have to create a new campaign from scratch, making it a Standard Shopping campaign.
We have a full video walkthrough on how to set up this Standard Shopping campaign.
I'll leave a link down below, so you can make sure that you set those settings up
properly the first time.
So now that we know the four things we need to run this strategy,
how does the strategy actually work?
We use our template here that uses your conversion rate,
your average cost per click, and your profit margin per product, to tell you how much we
should be spending to break even and be profitable with our shopping campaigns.
This strategy uses real data from your campaigns and tells Google
where to focus its energy based on what's been working so far.
This is pure profit driven marketing,
and the exact strategy that we've been using for years to scale up shopping campaigns.
If you've been running your shopping campaign for some time and had
some conversions, you'll have the data you need to use this strategy.
First, let's open up the template, like I said I'll leave a link to this template below.
It's a Google sheet and we're just going to open it up.
Go to file and click "Make a copy".
Pause the video, go grab this now, and come back.
I'm gonna keep going.
Next, open up your Google Ads account, click on the campaign, once it's open,
go to "Product groups" on the second left-hand menu.
Here you should see this row that says "All products", we're going to split this out,
so click on the pencil and scroll down all the way to the bottom, so you can see all your products.
Click the ✔️ box at the very top to select all of them, and click "Continue to edit bids".
Scroll down and click "Save".
This is going to spread out all your products individually,
so we can edit the products on an individual basis.
Now, we can actually see the performance of each individual product.
Now, we just need to unhide the columns that we need for the right metrics for our bidding system.
To do this just click on "Columns" and "Modify columns".
We'll see this window here where we can edit all the columns.
On the right-hand side, remove all the current columns.
Let's start from scratch.
Now, we want to unhide:
1. Average CPC
2. Clicks
3. Conversions
4. Conversion value
In that exact order.
You should see these exact columns on the right-hand side and only these columns.
Then click "Apply" and we can see the columns now showing up for each individual product.
The next thing we need to do is set the right date period.
Click on the date selector at the top here, and we want to select a significant enough period.
Here are a few caveats.
If you installed Google conversion tracking in Google ads sometime after starting this campaign,
do it from the date you properly set up conversion tracking.
This is because the data before that day, when you didn't have conversion tracking installed,
is basically useless.
The second thing is the more data we have, the better.
If you've never done this manual bidding strategy before, change the date to all time.
Lastly, if your product is seasonal,
do it for say the last 3 months or the same period for the last season.
In general I use 1 - 3 months, sometimes up to 6 months as long as I have a lot of clicks.
I usually want at least 500 - 1000 clicks if possible.
Of course this is going to depend on how many products you have for this store.
We have a lot of products, so even though we have 5 000 clicks they're spread out over a lot
of products so the top 20 products really only have 50 to 500 clicks, except for the top two.
Once you have selected your time period,
we're now going to download our data so we can add it to our template.
Click the download button, and then click CSV.
It's then going to download to our computer.
Open it up.
If you don't have Microsoft Excel you can just use a free Gmail account and open up drive.google.com.
Here you can drag it into Google drive and open it as a Google sheet.
Just right click and go to open with Google sheets.
Once open, we're going to ignore the top two rows here that are just information.
We don't need them.
We're going to select the data from this row here that has the column headers,
all the way down to the bottom right.
So I'm going to scroll down to the bottom of all the data, hold 'Shift' and select all the data.
Then I'm going to right click and select 'Copy'.
Now, go back to our Google Shopping bidding template sheet.
On the very top left-hand cell the campaign,
click that and then we're going to paste the data that we just copied.
This is very important. 👀
Only paste from this cell here A1.
It's then going to fill up the sheet.
These formulas are going to automatically calculate based on what's in these columns here.
That's why we needed to make sure we unhid the columns in Google Ad, in the right order.
Now that we have this data let's expand this sheet and look at the data.
Here you can see that it pulls in the data for our products for our Google Shopping campaign,
but scrolling across we can also see that it tells us some more metrics,
which helps us how much we should actually pay for our bids.
It shows us clicks until conversions,
meaning on average how many clicks do we need between each sale of this product.
For example, maybe we have a click this morning and then 24 other clicks happened today,
and we got another conversion.
For example, if we have 17.9 clicks per conversion, it means we had on average...
...a conversion this morning, and then 18 clicks later in the day, and then a conversion at night.
So every 18 clicks on average, we're getting a conversion.
Of course it's gonna change every time, but over time we'll have an average amount between
conversions that we can then use to actually calculate how much we should actually bid.
You can see that this is why, as you get more data in your campaign,
this strategy becomes more and more accurate, and more and more effective.
It then calculates the average conversion value, which is our average order value.
Of course this can be different from your actual price for this product,
because people will sometimes buy other products too, or more than one product at a time.
We then have our profit margin for this product.
This is a column you will need to edit yourself, right now.
It's basically the margin of our products without the ad spend.
Here, you can edit it for all your products as the same amount.
This is if you have an average for your entire store, or if you
actually know your margin on an individual product level, you can change that here.
I do recommend doing it on an individual level,
if you have a lot of variation between your products in terms of margin.
This allows us to know that we can bid much higher
for a product with a much higher profit margin, and be much more aggressive with our bids,
and potentially get a lot more sales for a profitable product.
We then have our max CPA, meaning maximum cost per acquisition.
This uses our profit margin for that product, and multiplies it by our average order value.
It tells us on average for this product that's clicked in our Google Shopping campaign,
what's the maximum we should be willing to pay, if we are trying to be profitable, on the first sale.
Of course, you're only going to see the data for products that have actually got conversions.
Next, we then have this column here "New Max CPC".
This then takes this maximum cost per acquisition,
and divides it by the average clicks per conversion.
Basically, this tells us if we want to be profitable
with each product here, how much should we pay per click, based on prior data.
It basically tells us how much to bid to just break even.
I think this is pretty cool. 😎
For example, this product here we could pay up to $2.07 per click,
based on the past data, and still break even.
This one here, is nowhere near as profitable we could only spend 42c per click.
See how there's so much variation?
That's because our products perform differently on Google Shopping,
and that's the real secret to this strategy, bidding on the product level.
Then we have this column here, which just allows us to filter
out and ignore the rows that are not actually products.
Then we have this last column here, which
actually tells us how much profit did we actually make for each of these products.
Now, the top row here symbolizes the whole
campaign so this campaign is actually making a loss of $800.
That's not good, but we see that there are some products here
that are actually profitable, and there are some here that are extremely unprofitable.
Obviously, the ones that are profitable have a much higher recommended max CPC,
something to keep in mind here guys this is incredibly important.
Just because there's a high max CPC in this column here,
it does not mean you should go into your account and set that exact max CPC.
It just tells you the maximum you could put if you are to break even, based on historical data.
If we take a look at our current max CPC column, it's actually much lower than this.
Yes, increasing our bids would increase the volume of clicks leading to more sales,
but our job with bidding here is to find the balance between profitability and volume.
The more we increase our bids the more clicks we get, leading to more sales,
but we end up paying more per click in our bids, meaning our costs go up.
This means the average profit per conversion is going to go down.
There's always going to be a balance between sales volume and ad costs in your account,
and you need to use nuance to find that balance.
So what do I do?
Here, I go through all the products, and note a new bid I want to put for each one.
First, let's look at the ones that are doing poorly.
These are the ones where the new max CPC is
significantly lower than what I've been bidding originally.
This is the system telling us that we need to lower our bids to be profitable.
Often, I'll lower my bids straight down to this exact new max CPC or something close to it.
Keep in mind that this new max CPC recommendation is just to breakeven, so obviously for products
that are performing very poorly we just want to start by getting them down to break even.
Secondly, we might have products that are close to breaking even but not
yet shown by our new max CPC being just a little bit below our current average CPC.
In this case I'll lower the bid to often between 10% - 20% below the new recommended max CPC.
This is because obviously I don't want to run my account just on breakeven, I actually
want to make profit, so I'm going to push the bid a little bit further than the breakeven.
Of course I don't want to push these bids too far.
For example, with this one here of 42c,
I'd probably decrease this down to 40c and watch how it performed in my campaigns.
I'm trying to push into profitability for this product
without taking a huge hit on the volume of clicks,
because as you reduce your bid you're going to reduce your ad rank in your Google Shopping ads.
This means you're going to have a lower position
in the search results, which is going to lead to a lower volume of clicks.
This is because obviously people click the first ads much more often than the ads lower
in position, but if that means that we can push this product into profitability, I honestly don't
care too much if we lose a lot of volume of sales, as long as we're actually making money,
because that's what this is about.
Now, before we talk about the profitable products,
I want to talk about all these other products here that don't have any conversions.
Now, if you're just starting with your campaigns,
you're obviously as well trying to optimize your website, and increase your conversion rate at
this point here you might actually spend a lot of money without getting a conversion.
This is when you definitely decrease your bids, until you actually get a conversion.
You do this to try and save some money,
so you don't waste a lot of money without getting any conversions.
So for a product like this one, that's lost $116 dollars so far,
I would decrease this bid maybe to 50c - 60c.
There is no clear rule of how much to decrease it, but I'm just going to fill this out,
but often I'm going to halve the bid, see if it still gets clicks, and go from there.
Lastly, if your products are already profitable meaning, the new max CPC like this one here $6.14
is well above the actual max CPC or the average CPC that you're actually paying
for your ads, sometimes I will increase my bids.
In this case I have a lot of room to grow from $1 all the way to $6 so I might increase
this by 50% - 100% and see if that substantially increases the volume of clicks for this product.
If this product is profitable which it is it's made me $138,
I want to get more sales, so increasing my bid is going to place me higher in the search results,
which is going to lead to higher costs, but more clicks because people are more
likely to click the products at the very top of the results.
Sometimes I'll even just leave the bids as they are,
you don't always have to change your bids, especially if it's chugging along profitably.
So this is why it's a little bit of an art, where you have to get used to your ads,
get used to the bidding process, and go from there.
Once you decide on what bids you're going to change, and how you're going to change them,
go back to your Google Shopping account and you can edit the bids directly right here.
Unfortunately, it's quite a manual process and you do it one-by-one.
You're going to go through, make these changes, and then come back and repeat
this process in a week or two weeks, depending on how many clicks you get.
After you've got the new bids you want to set, you'll now go back to your Google Ads account
into your shopping campaign, and click each product and adjust the bids.
Yes, I know this can be tedious, and if you have a lot of products it can take some time.
Once this is complete, don't touch anything else.
Let it be, watch the results over the next week or two weeks.
I'll often run this strategy on my account at least weekly, sometimes every two weeks,
sometimes monthly, depending on how much data I've got and the performance of the campaign.
The goal here isn't to use this strategy forever.
We want to use this strategy to help get those initial conversions as quick as possible,
get this campaign profitable and then start testing out some automated bidding strategies.
Usually, we'll run this strategy until we're getting about 50 - 100 conversions per month,
and then switch over to a target ROAS strategy.
This means going into your campaign settings,
going down to the bidding strategy, and changing this from manual to target ROAS.
You'll want to adjust the target ROAS goal to something above your breakeven ROAS,
but not too high that Google struggles to even come near it.
We usually recommend adjusting this to 20%-40%
above your breakeven ROAS, and watch how this performs for about a month.
If it's not working correctly after that time,
we'll decrease it to about 10% above our breakeven ROAS and watch it go from there.
Keep in mind that the actual ROAS you get and the profits you generate from this campaign,
is going to depend largely not just on the campaign but also your entire funnel.
This means your conversion rate, the profit margin on your products, and your repeat purchase rate,
is going to have a huge impact on the profits you can generate with Google Shopping.
A lot of people that struggle to get their campaigns profitable
don't have problems with their campaign strategy, but actually have problems
with their store, their funnel, and their conversion rate.
Now, I have some videos on what to do if your Shopping campaign isn't getting
any sales, or if your Shopping campaign isn't getting profits.
I'll leave a link to those two videos down below.
So that's how we do manual bidding for our Google Shopping campaigns when we start them out.
If you're watching this on YouTube,
this is actually part of our free Google Shopping course that's on our website.
It's 100% free, with no sign up required.
In this course we show you how to set up, optimize,
and scale your Google Shopping campaigns to make profits for your ecommerce store.
I'll leave a link below, go and check that out when you can.
If this video here was helpful, please hit the like button,
and let me know in the comments below.
Thanks for watching guys.
I'll see you in the next video.
Bye for now.