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Google’s automated ad types are becoming practically required for eCommerce brands to retain their competitive edge in PPC. Google is moving toward automation for a few reasons:

  1. As more people use Google’s search engine for shopping, Google wants to find the relevant ad type to show depending on how somebody is searching.
  2. To accomplish this, they are using their machine learning AI to figure out which ad type is “relevant” to a given search.
  3. As a result, advertisers who use Google Ads (formerly AdWords) automations tend to get their products in front of a broader audience who they may not have necessarily targeted manually.

We often encourage our clients to adopt these newer Google Ads types to help prevent being left behind as the competition starts to use them. We’ve already used automated campaigns to expand traffic, boost awareness of our clients’ brands, and improve efficiency.

This graph shows the growth in both traffic and transactions that we have accomplished using Google Ads automations. There is a spend increase of 115% due to the success, and Transactions are up 323%, Revenue is up 182% and ROAS is up 31%:

A graphic showing Google Analytics: Transactions are up 323%, Revenue is up 182% and ROAS is up 31%.

What can Google automate in terms of PPC? 

Quite a lot, and more is likely on the horizon. The Google Ads automation features we have seen some of the most client success thus far are:

  1. Automated bidding
  2. Smart Shopping
  3. Smart Display Ads
  4. Dynamic Search Ads

Below, we’ll illustrate how these Google automation capabilities play a big role in how we manage our client accounts and some crucial things to keep in mind when using them.

Want us to automate and optimize your eCommerce store’s paid search and PPC campaigns? Get in touch to see if we can help.

1. Google Ads Automated Bidding Campaigns

For larger accounts such as enterprise eCommerce stores, there usually isn’t enough time in the day for manual bid management to adjust the max CPC of individual keywords (and in doing so, optimize the campaigns).

Automated bidding takes care of optimizing the max CPC of keywords for specific goals, using strategies that Google has built into their AI.

Google’s automated bidding strategies and their goals are:

Goal and Bid Strategy

Note: Target CPA, Target ROAS, and Maximize Conversions are part of a subset of automated bidding strategies called Smart Bidding.

Which automated bid strategy should you use, and when? 

It depends on your business objectives

What KPIs are you focusing on?

  • If conversions are your primary goal, then you may use the Maximize Conversions bid strategy in order to focus on maximizing conversion volume.
  • If you want to get more conversion value out of your budget: Maximize Conversion Value.
  • If it’s traffic, then Maximize Clicks and Target Impression Share may be the best bid strategies. We have also used Target Impression Share to ensure we are maximizing impression share on brand. And we have leveraged this bid strategy to target and outrank specific competitors.
  • Often, our clients have a target ROAS and conversion rate in mind. We’ve found that Target ROAS and Target CPA are useful in reaching their goal numbers because these 2 KPIs tend to be more directly correlated to profitability.

Keep in mind, there are some other things to note about using Target ROAS and Target CPA:

Target ROAS

Target ROAS is useful if your goal is to increase the return on investment (ROI) and/or ROAS from PPC.

For example, one of our clients was struggling to hit their strict ROAS goal. We had refined a tiered Shopping campaign strategy to segment search queries and prioritize bids based on different performance buckets for those search queries. This was very successful in directing search queries to these different tiers, but we were struggling to hit their strict ROAS goal.

We tested adding a Target ROAS bidding strategy and saw a gradual, but steady lift in performance. With the ROAS goal set at a higher number than what we typically see, we assumed this would limit our targeting. However, automated bidding was able to find efficiency without decreasing our traffic.

For Target ROAS to work: It’s important to adjust the Target ROAS up toward the goal in increments. You want to “massage” the campaign by gradually increasing the Target ROAS. In our experience, Google’s machine learning algorithm will better adjust to this as opposed to a large jump.

Additionally, Target ROAS requires existing conversion data (such as 30-50 conversions within a 30-day window) in order to work well. We have seen that this is also true when using Target CPA.

Target CPA

If a client wants a specific return, or if they are concerned about specific margins and don’t want to invest too much, Target CPA may be the right approach.

Margins become a concern when selling higher-priced products because marketing them via PPC can sometimes (but not always) be more expensive from a keyword perspective. Higher priced items have longer conversion and lead times, so CPA can be more efficient.

For example: A home heater priced at $2400 may very well have a margin of $150. Anything over that is a straight loss, and if the sales cost $150 in ad spend that break-even amount simply went to pay for a conversion. For a successful campaign, ROAS in this case would be 16x or 1600%. In most campaigns, that ROAS would be incredible! But that’s why margins are so important to consider in any strategy.

We’ll usually work with clients to determine what the Target CPA and Target ROAS will be. Target CPA ads have also been good for generating leads at a cost that makes sense for our clients to acquire them.

For Target CPA to work: Like Target ROAS, Target CPA bid strategies require existing conversion data so that Google’s artificial intelligence has a model from which to spend your ad budget.

Note: Target CPA and Target ROAS can work especially well If you have a competitor with a manual CPC and yours is automatic. In our experience, Google seems to be more incentivized to hit target CPA or ROAS for the automatic campaign when one competitor is not using it.

Is there still room for manual bidding?

Automated bidding may be the future of PPC marketing overall, with algorithms that will rely on conversion data more than ever for its improved efficiency, better budget spend, and opportunities to pursue more fresh and broad targeting opportunities.

That said, it may not work across all campaigns. Depending on the competitor landscape, manual bidding will still be useful when the AI doesn’t work.

Strategically, manual bidding makes sense in certain cases. Such as campaigns that do a “scorched earth approach” of Maximizing Impression Share to dominate a search query or category. Or, to run a manual campaign that gathers the minimum conversion volume needed to run an effective automated campaign.

Smart Shopping Campaigns

Smart Shopping automates bidding and ad placement in a combination of Standard Shopping and remarketing Display Ad campaigns.

Google Search Results for "Red New Balance Sneakers"

An example of a Shopping Ad (which could be either a Smart or a regular Shopping Ad)

We like to use Smart Shopping campaigns to fill in the gaps our Standard Shopping campaigns leave open.

For example: One of our clients had a very efficient Standard Shopping campaign that was performing well, but wasn’t bringing in the transaction and revenue volume they wanted. Although this campaign was converting well, we were struggling to find growth for it.

When we introduced a Smart Shopping campaign, we immediately saw a boost in transaction volume without sacrificing our efficiency. The Smart Shopping campaigns allowed us to increase spend and discover new pockets of relevant traffic. This also increased our year-over-year revenue by 200% while maintaining the account’s ROAS.

As another example: We started using Smart Shopping in another account last Fall. This was one of the first accounts we had tested this campaign type on and we were unsure if this would boost performance. However, we began to see results almost instantly.

Within a month, shopping ROAS had doubled. By the third month, we broke our ROAS record at 1500%. Revenue has also consistently been up 200-300% year over year. 

Best Practices for Smart Shopping Campaigns

An optimized product feed is important for both automated and manual shopping campaigns. For SMART shopping in particular, you really need a highly optimized shopping feed to give Google the signals it needs to find your product relevant to a search.

For example, we especially look at titles, descriptions, and keywords, making it relevant to the product. If it’s a yellow T-shirt then we need the size, color, and material of it in the product feed.

Because of the nature of smart shopping campaigns, you don’t have any visibility into which search terms are triggering products to display. Optimizing the data feed will help ensure that search terms remain relevant and accurate to the product they trigger.

With that said, certain businesses need a lot of control over the search terms and audience that they’re targeting.

For example, large name brands may decide not to go in the automated direction because they need to know how their brand terms are being used or associated. They also need to have control over what they are targeting and what audiences based on specific brand guidelines and user demographics. Certain campaigns like Smart Shopping take away that control and insight.

Smart Display Ads

Smart Display is another automation type we have begun incorporating into our overall account strategies. Smart Display campaigns use automated bidding, automated targeting, and automated ad creation based on information about your products and their performance. Google displays the ads across the Google Display Network to reach customers outside of your manually targeted campaigns.

Smart Shopping Campaigns: Search, Display, YouTube and Gmail.

Smart Shopping Ads are also shown as Smart Display Ads in the Display Network.

We have used Smart Display campaigns primarily as a branding play to increase awareness and attract users to our client’s sites whom we might not typically target. It has been a powerful traffic driver, and we have capitalized on this increased volume by utilizing remarketing lists to continue re-engaging people who have visited a client’s website. This has enabled us to nurture these top of funnel, less targeted users into potential conversions by reaching that at multiple points in the buying cycle.

Smart Display campaigns are based on a Target CPA strategy that continually optimizes for conversions (and it’s another case where your store’s performance data is integral). So make sure to set the Target CPA at a rate that would get a viable return.

Dynamic Search Ads

Dynamic search ads have been helpful in our accounts. It seems that Google has larger eCommerce stores with a wide inventory in mind for this ad type.

What’s interesting about how they work is that Google uses a landing page from your website to create the copy for the ad when someone searches for a keyword that is relevant to that landing page. It’s “dynamic” in that it pulls information from your website to create the text ads within search results in real time. These ads are also dynamic in the keywords they match and target.

For example, if someone searches Google for “rain jacket women” and you have a landing page for women’s jackets, they will see your Dynamic Search ad with the headline “rain jacket women” if Google’s algorithm finds it relevant to the search and decides to display it:

Dynamically created headline based on the Google search: "rain jacket women"

An example of a dynamic search ad.

We frequently use this campaign type when launching new accounts to ensure we have coverage on all relevant keywords. We also use it to identify new pockets of traffic in existing accounts that we are trying to expand. Not only is this a good keyword mining tool, but we also find that it may foster strong performance when paired with a target ROAS or target CPA bidding strategy.

To make Dynamic Search ads work: First, think of them as a very basic ad type. We like to look at them as research tools because these ads frequently look at areas you aren’t necessarily targeting.

Second, understand that they revolve and change. These ads will continue to target new keywords and new ad copy and thus they fill in temporary gaps, but they will not necessarily continue targeting any one keyword.

Above all, Dynamic Search ads are an ongoing strategy. As Google creates these ads and you see what resulted in conversions, you can use that information to expand your thinking for other campaigns.

Conclusion

We hope this has given you some insight into several main automated strategies that Google provides. In our view, it can’t be overstated that using these strategies are a requirement to stay competitive in the eCommerce PPC landscape.

If you don’t use these automated strategies, chances are that your competitors will…and their stores may benefit from the increasing opportunities these strategies open up instead of yours.

To recap:

  • We have used Google’s automated ads to both expand traffic as well as increase efficiency for our eCommerce clients. The ad types we’ve seen the most success with are:
    • Automated bidding
    • Smart Shopping
    • Smart Display Ads
    • Dynamic Search Ads
  • We have also used these campaigns to boost brand awareness and build a wider funnel for a more holistic marketing approach that takes a broader consideration in what and who to target (thanks to Google doing that targeting for us).
  • Maybe most importantly, these automated bidding strategies have helped us to improve our PPC metrics and divert time toward higher-level strategic initiatives that may normally be spent on granular adjustments to the campaigns.

Your turn: The first step and key for any eCommerce business to begin using automated strategies effectively is to gather their conversion data. With that, Google’s AI can effectively target a broader audience than manual ads will allow.

Wondering what you could be automating in terms of PPC? If you’re interested in getting started with these automated strategies, please get in touch to see how we can help you with them as a marketing agency. Or, take advantage of our other growth-focused eCommerce SEO, SEM, PPC, and CRO services.