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How google shopping bidding and ad allocation works?

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

I am confused as to how google shopping works. I will explain my thoughts and would really appreciate if someone could please clarify for me at the end. From my understanding in google shopping you bid on products to get them shown in front of customers. My question is how am I able to buy any traffic at all when my bids are equivalent to a 5x roas when my competitor is bidding for as much traffic as he can spend at a 4x roas. I dont understand why large retailers are not able to buy all of the traffic is they are allocating all of their budget towards certain products and bidding higher. Economically I do not see how someone else would be able to buy clicks? If someone could please explain how this works and why a large retailer would not just buy all of the traffic up that would be great. Thanks

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Re: How google shopping bidding and ad allocation works?

Top Contributor
# 2
Top Contributor

- the bid is not the only factor;
- there are a large number of auction slots available within google-shopping;
- ad results are based on an auction -- not a direct purchase of traffic;
- importantly, having the highest bid does guarantee winning the auction:
https://www.youtube.com/watch?v=PjOHTFRaBWA

other factors include the quality of all data submitted, click-through-rate --
historical clicks and impressions -- the ad's relevance, and the overall
landing-page experience, combined with other factors such as time-of-day,
ad-extensions like ratings and reviews, a user's search-terms, device type,
language-preferences, location, search-history, etc., and their related
campaign details and the related attributes in the submitted data (feed).

generally, the bid strategy should focus on the overall business-goals
and advertising-objectives with respect to product-groups -- such as
bidding higher on seasonal items, or bidding lower on types of items,
or changing bids based on time of day, margins, or sale tactics.

improved quality and best-practices -- such as using negative-keywords
or improving submitted data quality -- are the main counters to high bids;
but there are few, if any, easy or fast shortcuts to better results.

perhaps slightly antithetical, but somewhat importantly, the
return-on-advertising-spend does not measure profitability.

Re: How google shopping bidding and ad allocation works?

Follower ✭ ☆ ☆
# 3
Follower ✭ ☆ ☆
Not sure this helps, but, I had a Google employee call me and basically told me to match ALL of the Benchmark Max. CPCs. So, why would he do that if cost wasn't an important factor. We cannot afford what the larger retailers are spending. Especially when one has no control over how the money is spent. For example, who wants to spend £1.50 on a word that means nothing?! There is no way to protect yourself from crap being thrown at your account on daily basis (am I missing something??). My two pennies worth...

Re: How google shopping bidding and ad allocation works?

Community Manager
# 4
Community Manager

Hi Ian,

 

The bid you set is still important. If you set a $0.05 bid, for example, you would be unlikely to enter the auction at all. But it depends entirely on your industry and competition.

 

As far as not paying for non-relevant searches, you can exclude those in your account by adding negative keywords, just like you would in a search campaign. If you click into your campaign and go to the Keywords tab, you can add negative keywords or view the search terms report to exclude terms that have previously triggered your ad.

 

Hope this helps,

Cassie

Re: How google shopping bidding and ad allocation works?

Visitor ✭ ✭ ✭
# 5
Visitor ✭ ✭ ✭
Ok so essentially what is the best 3 things to do to buy as much or more traffic as your competitors on google shopping?

Re: How google shopping bidding and ad allocation works?

Follower ✭ ☆ ☆
# 6
Follower ✭ ☆ ☆
Thanks Cassie. So, are you saying, depending on what industry your in, if you cannot bid at a certain level, then don't bother? As I keep being told, this is a biding system, right? So, if you're a larger retailer, why not price out the little guys? Makes sense to companies in that position, one would think. So, no matter how you look at it, the little guy struggles? I know, a little black and white, but, born from frustration.

Also, yes, I understand negative keywords. I have over, don't know, 100,000 of them. All of which cost us money. If there was a way of preventing rubbish hitting your account, before paying for it, that would of course help. REGULAR EXPRESSIONS would help me, a lot. I'm sure Google could find a way to make this happen. Forgive me if I'm wrong here, but, wasn't there a way to turn off spelling mistakes with the original or text based Adwords system? If so, why not with Shopping?

Lastly, it would also be great if when a negative keyword/search term was added to one's list and a competitor from the same industry actually took more than one sale, with that keyword, one could get a nudge. "Hey, this keyword works!", kind of. A little like Search Impr. share / Search Lost IS etc. Now, that would be handy too.

Re: How google shopping bidding and ad allocation works?

Follower ✭ ☆ ☆
# 7
Follower ✭ ☆ ☆
Good question Daniel.

Re: How google shopping bidding and ad allocation works?

Community Manager
# 8
Community Manager
Hi Ian,

I think we're boiling this down to something too black-and-white, like you mentioned. Ultimately you need to do what's best for the business and your ROI. That's not going to be the same for every industry, or for many businesses within the same industry.

What I've seen advertisers successfully do in the past when they have competition from much larger companies is to be very targeted and strategic in their shopping campaigns. So rather than listing the hundreds of products they had in their inventories on shopping, they chose to only make shopping ads for their highest profit margin items. They could afford higher bids on these items because of the higher margins, and they avoided advertising products which had low profit margins, and on which it was difficult to get a positive ROI.

Other things you can look at too are adjusting your mobile bid depending on that platform's profitability, setting up ad scheduling to better control the budget, and narrowing the scope of your location targeting. But it sounds like you're quite savvy and have likely already explored those as well!

There is no longer a way to turn off misspellings/other forms of a word (called "near match") in any part of AdWords, but I will give your feedback on that to the AdWords team.

Cassie

Re: How google shopping bidding and ad allocation works?

Follower ✭ ☆ ☆
# 9
Follower ✭ ☆ ☆
"...but I will give your feedback on that to the AdWords team."

Thanks Cassie