In this video, you're going to learn what to do if your Google Shopping campaigns aren't profitable.
We'll cover three main areas that can cause this issue:
1. Your Google Ads account
2. Your product page conversion rate
3. Business model
First, let's start with your Google Ads account.
Basically, you're likely paying too much for your traffic and we need to reduce your cost.
In our free Google Shopping course, we show you how to optimize your Google Shopping campaigns.
I'll basically be summarizing this right now in this video,
but if you haven't joined the course yet, go and check it out.
It's 100% free, with no signup required.
So here's what we do for the stores that we work with.
One, we cap the budgets of our campaigns until they're profitable.
We like to keep the budgets of our campaigns to 50 - 100 maximum, until they're profitable.
Then once we're confident in their profits, we'll start unleashing that budget to scale.
If you don't yet know if your campaign is profitable,
go watch our video on calculating the profitability for your store.
I'll put a link to that video down below.
I'll also put a link to a video showing you how to unhide
our recommended columns in your Google Ads account.
The next thing you'll want to do if you're not profitable, is to strategically lower your bids.
When a campaign isn't profitable especially at the start,
we like to focus on manual bidding, especially at the product level.
We'll adjust our bids based on how profitable each product is, in our Google Shopping campaign.
For example, if a product has an average CPC of $1.50 and it's below
our break-even ROAS, we'll lower our bids.
We'll then watch how it performs, and see if it goes up above our breakeven ROAS,
meaning it's now profitable.
Of course by doing this you're going to reduce your position in the search results,
meaning you'll get less clicks and less volume of conversions, but this can then mean that that
product then becomes profitable, even though you're getting a reduced volume of sales.
To learn exactly how we do this process, and to get our
free template giving you the calculations for your bids, check out the link below.
We have a full video guide taking you through everything we do there.
The next thing we want to do is make sure that we're adding negative keywords into our campaign.
Adding negative keywords helps us tell Google which search queries we don't want to show for.
This helps us avoid paying for clicks for people that aren't going to convert on our store.
Over time as we add more targeted negative keywords,
our campaign performance is going to improve.
This means we'll spend less money on wasted clicks that are irrelevant,
and aren't going to lead to a sale.
We have a full guide on adding negative keywords.
I'll leave a link to that down below.
You also want to improve your product feed.
This is huge ‼️
Google doesn't use keywords to figure out who to show your products to.
Google looks at your product feed, looks at the product information,
and tries to guess what your products are, and who to show them to.
If you haven't yet optimized your feed this is going to really hurt you.
Google is going to start your campaign by showing to more general people.
This means you'll waste more money as Google tries to figure out what your products are.
Do yourself a favor, and go through our videos on optimizing your product feed.
I'll leave links to that down below.
Lastly for Google Ads, we want to add bidding adjustments.
This is one of the last things you should be doing to optimize your
shopping campaign, but it's still very helpful.
Bidding adjustments means telling Google you want to bid differently, depending on
what device the person is using, their location, and their time of day and day of the week.
This allows you to get much more granular with your bidding for your campaign,
but honestly focus on the other optimizations first.
They're going to have a bigger impact on your profitability.
Too many people rush in and start making these sort of bidding adjustments,
when their campaign just doesn't have enough data.
They're the main things to work on in your Google Ads account if you're not yet profitable,
but even with a highly optimized Google Ads account this means
nothing if your store can't convert your customers.
So let's look at that right now.
Your conversion rate makes all the difference.
You're paying for your traffic with Google Shopping.
If you can convert more of this traffic without increasing your ad costs,
you're going to make more profits.
It's simple math.
You should be constantly testing and improving your store,
and your product pages, to convert more and more customers.
This means making sure your store looks fantastic,
it builds trust, and solves the problems of your customers.
A common mistake I see people making when they start with Google Shopping,
is they focus all their time on optimizing their account, when their product pages look like this.
A basic page with just a product title, an image, and a short description.
Compare that to a product page like this.
A product page that is engaging, clearly demonstrates how amazing this product is,
explodes with social proof, and walks through all the features and benefits in great detail.
This type of product page is called a long-form product page, and it converts
way more than just a regular simple product page.
When we set these up for our clients we see them getting conversion rates in the 3-10% range.
It's absolutely insane. 🤪
Imagine increasing your conversion rate from 1% to even 3%.
You're now converting three times as many customers, for the same cost, because obviously
your Google Ads cost doesn't increase, but the number of customers that you're converting does.
Getting this right gives your campaigns rocket fuel, and allows you to scale like crazy.
Now, I have a full free course on how to set up these long form product pages.
I'll leave a link to that down below so go and check that out.
Lastly let's talk about your business model.
Yes, you need to have an optimized account.
Yes, you need to optimize your product pages for conversions,
but if you don't have an optimized business model, it's going to be hard to scale.
Let's start with the lack of margins.
Your profitability depends on how much you're selling your products for,
and how much you need to pay to your supplier in cost of goods sold, as well as your expenses.
If you sell a product for $50, but all your expenses and cost of goods sold, equals $45,
then you only have $5 in profit to spend on acquiring your customer.
That's almost doomed to fail.
Let's break down the math.
Say you have an awesome conversion rate of 3%,
that means on average every 33 clicks you get a sale.
Well with a maximum of $5 in profit per conversion,
you can only spend a maximum of $5 every 33 clicks.
This means 15c per click.
If you've ever run any Google Shopping campaigns before, you'll know that 15c per click is almost
unheard of, unless you're in a very specific geographical area, or have minimal competition.
But if you increase your average order value to $100, and keep your expenses
at $60 dollars per order, then you now have $40 per conversion to acquire your customer.
With the same conversion rate, you can now spend up to $1.21
per click, which is much more reasonable.
So what do we learn here?
Increase your margins by having higher product prices, and lower product costs, so you can
increase the margin that you can spend to acquire customers, and also the profits for yourself.
How can you decrease your expenses?
Negotiate better deals with suppliers, cut unnecessary spending, and systemize,
and improve your operations with automation.
How can you increase your prices?
It's easier said than done, but generally if you increase your prices
you're generally going to see a decrease in your conversion rate.
The key here is to test while at the same time increase the perceived value of your products.
If you can show that your products and experience is way better than
your competitors, you'll be able to charge more.
This goes hand-in-hand with improving your conversion rates and with many
of the clients we work with, optimizing the product pricing is a whole exercise.
I recommend starting by testing out changes to your pricing and see how the market reacts.
The last thing I'll say about the business model, is that many stores I've worked with
weren't profitable, because they were focusing on just generating profits
from the first order from their customers.
They would get their Google Shopping traffic,
generate sales, but barely break even on that first sale, but once
they focused on getting repeat customers, that's when things drastically improved.
You've already spent all this money on Google Shopping to acquire the customer.
If you can get them to come back and purchase again through remarketing,
email marketing campaigns, the added cost is marginal compared to the increased revenue
and increased profits you're going to generate.
This is called focusing on the customer lifetime value.
If you're building a brand and a long-term store,
I recommend keeping this in mind as it supercharges your ads.
If you know that over the next 3-6 months you're going to make much more money from your customers,
then you can be much more aggressive with your Google Shopping campaigns,
because you know you're going to make that money back.
The stores that win with digital marketing are those that can spend more to acquire customers.
So that's what you need to do if you're not generating
profits from your Google Shopping campaigns.
Now, this video here is actually part of our free Google Shopping course on our website.
It's 100% free, with no sign up required.
It teaches you everything you need from setting up,
optimizing, and scaling your Google Shopping campaigns.
I'll leave a link down below, so you can go and check that out.
If this video was helpful, please give it a like, and let me know in the comments down below.
Thanks for watching guys, I really appreciate it, and I'll see you in the next video.
Bye for now.