Goal:
To determine the right bid strategy and optimize the cost and performance of your shopping campaign.
Ideal Outcome:
The key is to find the best bidding strategy for your business and continually monitor and adjust it as necessary to achieve the best possible results.
Prerequisites or requirements:
Before using this SOP, you need to:
- Set up a Google Merchant Center (SOP 213 – web version)
- Set up a Google Ads account (SOP 014 – web version)
- Link Google Merchant Center with Google Ads (SOP 219 – web version)
- Prepare your Google Merchant Center feeds (SOP 218 – web version)
- Claim and verify your website on your Google Merchant Center (SOP 214 – web version)
- Set up shopping campaigns in your Google Merchant Center (SOP 216 – web version)
Why this is important:
Bidding strategies are crucial to efficiently spend money based on your selling products and your available capital. Bidding too low can mean your ads are not delivered, and bidding too high can be a losing business model. When you have all the different campaigns prepared, the optimal bidding strategy will help you achieve your objective campaign goal with the maximum result while staying cost-effective.
Where this is done:
In Google Ads.
When is this done:
Whenever you launch a Google shopping ads campaign.
Who does this:
Digital marketers or advertising professionals who are experienced in using the Google Ads platform.
Where to set up and edit bidding for your Google shopping campaigns in Google Ads
1. Sign in to your Google Ads account here. Choose the appropriate Gmail account and log in with your password. Click “Next”.
2. In the page menu on the left, select “All Campaigns”.
3. Next, if you are new, you will have to set up a new campaign. Click on the “+New campaign” button. A mini pop-up will appear where you can select “New campaign”. If you already have a new campaign set up halfway, proceed to select “Resume campaign draft”.
4. Next, select “Create a campaign without a goals guidance” when choosing your objective for the campaign.
5. Select “Shopping” as your campaign type and hit “Continue”. At this stage, ensure that your Google Merchant Center has successfully linked to your Google Ads account.
6. Next, set up your conversion goals by clicking “Add goal” and selecting the country where your products are sold, as seen below.
7. For new users, it is recommended to select “Smart Shopping campaign” for Google to automate your bidding strategy. For users who want to pick their own bid strategy, go for the “Standard shopping campaign”. Hit “Continue” to proceed.
8. Next, after filling up the campaign's general details, such as name and other additional settings, go to the “Bidding and budget” section and place your bids here.
Depending on the campaign objective and type, different bidding strategies are available. You may refer to the following bid strategies listed below:
Strategy 1: Smart Shopping or Performance Max (Automated by Google) Strategy 2: Target ROAS Strategy 3: Maximize Clicks for brand awareness or new campaigns Strategy 4: Maximize Conversions Strategy 5: Manual CPC Strategy 6: Manual CPC (Enhanced)
9. Alternatively, if you already have existing campaigns, go to “Campaigns” on your left navigation menu and click on the selected campaign title.
10. Next, go to “Settings” on the left, scroll down to the “Bidding” section on the right, and hit “Change bid strategy”.
From here, you can adjust your bid strategy for your existing campaigns.
You can choose what to focus on by clicking on the drop-down menu depending on the campaign objective and type.
In this case, a conversion bid strategy was selected. Tick the box to set a target for your cost per action. You will be prompted to input the cost.
Alternatively, if you want to set a manual bid strategy such as “Manual CPC” instead of an automated bid strategy, click “Or select a bid strategy directly”. Click “Save” to proceed.
Lastly, you can view your bid strategy status under “Campaigns”.
You may adjust your daily budget directly by clicking on the pencil icon on the campaign page. This may affect the bid strategy report.
The status column will inform you whether Google Ads has optimized your new bid strategy here. If it's Eligible (Learning), it means you've recently created or changed a campaign, and Google needs time to learn how to serve your bidding strategy, given the new change. This only applies to the automated bid strategy and not the manual bid strategy. Click here to check for the definition of other statuses.
Hoover your mouse to the status name. You can “View bid strategy report” calculated by Google Ads. Make sure to change the date range on the right corner of the screen to view your bid strategy report accordingly.
Strategy 1: Smart Shopping or Performance Max (Automated by Google)
Recommended for: New businesses or consultants who do not have time or expertise to optimize bids for their shopping campaigns.
Strength of Recommendation: Low to medium.
Objective: To automatically optimize shopping campaigns and drive maximum conversions while minimizing the cost per conversion.
Advantages: Saves time and effort to set up a bid strategy.
Disadvantages: Data on the shopping campaign performance, search query, and product performance will not be provided for further analysis and future optimization. The addition of negative keywords is not permitted. Overall, an automated bidding strategy will not let you know what is working and what isn’t working.
Bid strategy(s): Smart Shopping uses automated bidding strategies to optimize for the best possible performance. Smart Shopping combines manual and automated bidding. To take one step further, you may consider running Performance Max with SOP 216 (web version). Performance Max uses machine learning to optimize for conversions and brand awareness, lead generation, and other business goals using exclusively automated bidding.
In bid settings:
Following the steps in Where to set and edit bidding for your Google shopping campaign in Google Ads, choose “Smart shopping campaign” under the campaign subtype. If you have a specific performance goal, add a target return on ad spend (ROAS). The campaign will use it once it has enough conversion data.
Enter your daily budget.
Select a bid strategy in the drop-down menu. This includes either maximizing conversion, maximizing conversion value, or maximizing clicks.
[Recommended] Add a targeted ROAS. To calculate your ROAS and campaign profitability, go to the Google Shopping Campaign Profit Calculator.
Strategy 2: Target ROAS
Target return on ad spend (ROAS): This alters your bids to get the best conversion value. With this option, you will set an average return on ad spend that you would like to achieve, and Google will work toward this goal.
Recommended for: E-commerce businesses that sell products online and want to maximize the value of their advertising spend. It is particularly useful for businesses that clearly understand each conversion's value and want to achieve a specific return on ad spend.
Strength of Recommendation: Medium to High.
Objective: To maximize the conversion value while achieving the target ROAS set by the advertiser.
Advantages: Enables advertisers to optimize their ad spending for maximum profitability. By setting a specific target ROAS, the algorithm will automatically adjust bids to ensure that advertisers achieve their desired return on investment. This can help businesses maximize their conversion value and increase their profitability.
Disadvantages: It requires a clear understanding of the value of each conversion or previous data on conversions. If a business does not accurately track the value of its conversions, it may be difficult to set an effective target ROAS. Additionally, the Target ROAS bid strategy may not be the best choice for businesses focused on other goals, such as maximizing click-through rates or building brand awareness. In such cases, other bid strategies may be more appropriate to build brand awareness before the Target ROAS bid strategy, such as Strategy 3: Maximize Clicks and/or Strategy 4: Maximize Conversions. This is so that you can have enough conversion data (at least ~50-100/month) for Google Ads to adjust your bids automatically.
Bid strategy: The Target ROAS bid strategy is an automated bidding strategy based on a target return on ad spend. Advertisers set a target ROAS, and Google Ads uses machine learning to automatically adjust bids to maximize the conversion value while maintaining the target ROAS. Consider giving the bid strategy 15 days to run before you evaluate its performance.
In bid settings:
Following the steps in “Where to set and edit bidding for your Google shopping campaign in Google Ads”, choose “Smart shopping campaign” under the campaign subtype. Add a target return on ad spend (ROAS) under “Bid settings”.
Enter your daily budget.
Select a bid strategy.
Add a targeted ROAS. To calculate your ROAS and campaign profitability, go to the Google Shopping Campaign Profit Calculator.
Strategy 3: Maximize Clicks for brand awareness or new campaigns
Maximise Clicks: This sets your bids to obtain the maximum amount of clicks possible for your target spend.
Recommended for: Businesses focused on driving website traffic and increasing the number of clicks on their ads. It is particularly useful for businesses with a limited budget who want to maximize the number of clicks they receive within that budget.
Strength of Recommendation: Low to medium.
Objective: To generate as many clicks as possible within the budget provided by the advertiser.
Advantages: Help businesses get more ad clicks without manually adjusting bids. This can save time and effort for advertisers who don't have the resources to manage their bids daily. Additionally, it is a good option for businesses with a limited budget because it helps them maximize the number of clicks they receive within that budget.
Disadvantage: It does not consider the quality of clicks. While it can help businesses get more clicks, it does not necessarily guarantee that those clicks will lead to valuable conversions or sales. Additionally, it may not be the best choice for businesses focused on other goals, such as maximizing conversion value or achieving a specific return on ad spend.
Bid Strategy: An automated bidding strategy designed to increase the number of clicks on ads. Advertisers set a daily budget, and the algorithm adjusts bids to maximize the number of clicks within that budget.
In bid settings:
Following the steps in “Where to set and edit bidding for your Google shopping campaign in Google Ads”, choose “Smart shopping campaign” under the campaign subtype followed by “Bid settings”. Under “Bidding”, select “Maximize clicks” in the drop-down menu and set a maximum cost-per-click bid limit.
Strategy 4: Maximize Conversions
Maximize Conversions: This sets your bid strategy to generate as many valuable conversions as possible within a given budget.
Recommended for: Businesses focused on increasing the number of valuable conversions on their website.
Strength of Recommendation: Medium to High.
Objective: To generate as many conversions as possible within the budget provided by the advertiser. This bidding strategy automatically adjusts bids for each auction in real-time to increase the likelihood of getting more conversions.
Advantages: Help businesses to get more valuable conversions without manually adjusting bids. This can save time and effort for advertisers who don't have the resources to manage their bids daily. Additionally, it is a good option for businesses with a history of successful conversions because it can help them maximize their return on ad spend.
Disadvantages: It may not work well for businesses new to advertising or don't have a history of successful conversions. In such cases, it may be difficult for the algorithm to optimize bids without enough data. Additionally, businesses with a limited budget may not be feasible because it prioritizes conversions over budget constraints.
Bid Strategy: An automated bidding strategy designed to increase ad conversions. Advertisers set a daily budget, and the algorithm adjusts bids to maximize the number of conversions within that budget.
In bid settings:
Following the steps in “Where to set and edit bidding for your Google shopping campaign in Google Ads”, choose “Smart shopping campaign” under the campaign subtype followed by “Bid settings”.
Enter your daily budget.
Select “Maximize conversion value” in the drop-down menu.
[Recommended] Add a targeted ROAS. To calculate your ROAS and campaign profitability, go to the Google Shopping Campaign Profit Calculator.
Strategy 5: Manual CPC
Manual CPC (cost-per-click): A bidding strategy offered by Google Ads that allows advertisers to manually set their maximum CPC bids for their keywords or ad groups.
Recommended for: The Manual CPC bidding strategy is recommended for advertisers who want full control over their bids and are comfortable adjusting bids manually. It is particularly useful for advertisers who understand their conversion data and are looking to optimize their bids based on that data.
Strength of Recommendation: High.
The best bidding strategy setup:
- Gain at least ~50-100/month conversions with Strategy 4: Maximize Conversions
- Followed by Strategy 2: Target ROAS
- And lastly, to go for Strategy 5: Manual CPC or Strategy 6: Manual CPC (Enhanced)
Objective: To give advertisers complete control over their bids, allowing them to set maximum and minimum bid limits for each keyword or ad group. With this bidding strategy, advertisers can optimize their bids to achieve their desired ad positions, maximize clicks, or achieve a target CPC.
Advantages: It gives advertisers complete control over their bids, allowing them to set maximum and minimum bid limits for each keyword or ad group. This can be particularly useful for advertisers who want to optimize their bids based on their conversion data or who have specific ad position targets. Additionally, it can be a good option for advertisers with a limited budget, as it allows them to set strict bid limits and control their costs.
Disadvantages: It requires advertisers to set their bids manually, which can be time-consuming and require significant data analysis to optimize bids effectively. It also may not be the best option for advertisers who are not experienced with bidding strategies or do not have the resources to manage their bids manually.
Bid Strategy: Manually set their bids for each keyword or ad group. This requires advertisers to have a good understanding of their conversion data and to be comfortable with adjusting bids based on that data.
In bid settings:
Following the steps in “Where to set and edit bidding for your Google shopping campaign in Google Ads”, choose “Standard shopping campaign” under the campaign subtype followed by “Bid settings”. Select “Manual CPC” under the drop-down menu. For Enhanced CPC, go to Strategy 6: Manual CPC (Enhanced)
Strategy 6: Manual CPC (Enhanced)
Enhanced cost-per-click (ECPC): This is designed to help boost your conversions for manual bidding by altering your manual bid if Google thinks it is more likely to result in a sale. This is more favored by retailers because it focuses more on the end sales results than driving traffic.
Manual CPC and Enhanced CPC are two different bidding strategies in Google Ads. With Manual CPC, advertisers manually set their maximum CPC bids for their keywords or ad groups, giving them more control over their budget and campaign performance. On the other hand, Enhanced CPC is an automated bidding strategy that adjusts bids in real-time based on the likelihood of a click leading to a conversion.
Recommended for: Advertisers who want some level of automation to optimize their bids based on historical conversion data while still maintaining some control over their bids.
Strength of Recommendation: High.
Objective: Optimize bids to increase the number of conversions.
Advantages: It uses historical conversion data to automatically adjust bids in real-time to increase the likelihood of conversions while maintaining a target CPA.
Disadvantages: It requires some manual adjustment of bids and may not be as efficient as fully automated bidding strategies. Additionally, it relies on historical conversion data, so the bidding adjustments may not be accurate if a campaign has limited data. Finally, this strategy does not consider external factors, such as changes in the market or competitor behavior, which can impact the performance of a campaign.
Bid Strategy: An automated bidding strategy that adjusts bids in real time based on the likelihood of a click leading to a conversion. The bid is automatically adjusted to maximize the chances of conversions while maintaining the CPA. It allows for more efficient bidding as compared to manual bidding.
In bid settings:
Following the steps in “Where to set and edit bidding for your Google shopping campaign in Google Ads”, choose “Standard shopping campaign” under the campaign subtype followed by “Bid settings”. Select “Manual CPC” under the drop-down menu. Tick the box to activate “Enhanced CPC”. We recommend selecting “Optimize conversion value” to maximize the total conversion value, considering the revenue generated by each conversion rather than just the number of conversions (Optimized conversion).
