Product Listing Ads [Gifographic]: How to Increase ROAS & Sales

When it comes to paid online advertising, more of the same—even if it’s worked for you in the past—doesn’t work anymore. 

According to the Interactive Advertising Bureau’s (IAB) latest report, internet advertising hit an all-time high of $32.7 billion during the first half of 2016. Just for a bit of perspective, that’s a full $5.3 billion more than the first six months of 2015. Not surprisingly, the lion’s share belongs to two camps: search (27%) and mobile (48%).

Those are all big numbers and none of them are surprising. So what do they mean for you as an ecommerce merchant?

Two things: (1) the competition for online advertising is fierce and (2) simply investing in search and mobile isn’t enough. 

Enter product listing ads (PLA).

There’s nothing jaw-droppingly fresh about PLAs. They’ve been a part of Google Merchant Accounts for years. A simple search of any high-intent keyword (e.g., “dress shoes for men”) reveals exactly what we’re talking about.

What you might not know is the chance that you’ve clicked a PLA and moved directly to a purchase is far higher than other PPC and CPC methods. One study from earlier this year discovered that “revenue from Product Listing Ads (PLAs) grew by 52% year over year in the first quarter of 2016.” And that’s not all. In keeping with the domination of mobile, during that same timeframe, mobile PLAs alone experienced a:

171% lift in both clicks and orders
23% rise in return on ad spend (ROAS)
45% overall bump in site wide revenue, and a
164% increase in sales

Numbers like that are why PLAs should be your go-to tool for connecting prospects with products as quickly and profitably as possible. In other words, shortening the funnel from search to sale.

How?

I’m glad you asked.

To answer that question, Shopify Plus and I partnered up with the team over at KlientBoost to create the world’s first Product Listing Ads Gifographic. Here are the five easiest ways to increase your clicks, ROAS, and sales all with PLAs.

1. Go Negative with Keywords

Because Google Channel campaigns don’t let you target specific keywords but instead are based solely on your product itself, you have to go negative.

That doesn’t mean you can’t control the relative “intent” of each search -- i.e., how serious the person looking for certain products is about buying.

You can do this by creating three different campaigns for each PLA:

(1) Generic Campaigns: “Sneakers”

If you want to target broad queries, exclude (1) common brands associated with your product type and (2) the names of specific products.

(2) Brand Campaigns: “Nike”

To zero in on brand searches, this time eliminate (1) specific product names as well as (2) any generic terms that will only serve to dilute the brand you want to feature.

(3) Product Campaigns: “2016 HyperDunk”

To get down to a single “make and model” (i.e., one specific product), use negative keywords to exclude (1) all generic terms and even (2) the brands themselves.

Create separate campaigns governed by negative keywords to ensure relevancy and optimize your bidding. You can also use negative keywords to discover what campaigns -- generic, brand, and product -- have the highest conversion rates as well as the lowest CPA.

And knowing that is the key to dramatically improving your ROAS.

Naturally, what you’ll usually find is that product campaigns perform the best. After all, these are the searches with the highest intent. In contrast, a generic campaign tends to yield the lowest conversion rate and highest cost per conversion. Anybody Googling “sneakers” is far from ready to buy.

As a result, your bidding structure should start out as a reflection of that logic:

• Product Campaign: Highest Bids
• Brand Campaign: Competitive Bids
• Generic Campaign: Lowest Bids

2. Get Detailed with Your Feed

To match searches to ads, Google uses four parameters, all of which are housed in the product feed of your Google Merchant Center account: (1) a product category taxonomy that’s organized by presets Google provides; (2) the product type, which is similar to taxonomy but created by you; (3) the product title; and (4) the product description. Mess up any of these parameters and the whole campaign falls apart.

(1) Product Category

While expansive -- clocking in at just under 5,500 options of which you get to pick one -- thankfully, Google’s taxonomy is straightforward. You can download the entire spreadsheet here and use Ctrl + F to search for the best option. You may be tempted to go broad, thinking that will increase how often your ad is displayed. That’s true, but the more detailed you get with your selection, the higher the relevancy of your PLA will become -- increasing conversions and decreasing costs.

(2) Product Type

The same principle is true of your product type. Get as niched as possible to ensure you match the intent of the search that’ll trigger each ad:

(3) Product Title

Like the name implies, product title is the first thing that appears in your PLA:

Onsite, it makes sense to get creative and have fun with your product titles. After all, the majority of your visitors are repeat customers already familiar with your brand’s style. For PLAs, be clear, not creative (and certainly not clever).

Both Google and Shopify’s own Ultimate Guide to Google Channel by Brett Curry, CEO of OMG Commerce, stress a short-list of best practices:

• You get 150 characters for your product title. Don’t waste nor leave blank a single one.
• Front load the most important information (users will see only the first 70 characters).
• Use keywords like the product’s full name, brand, gender, size, color, and differentiating factors: e.g., “Nike Flex 2016 RN Men's Water-Resistant Running Shoes, Size: 9, Black.”

(4) Product Description

Because your product description is rarely viewed in a PLA, the temptation here is to ignore it and opt for a quick cut-and-paste from something like the manufacturer's listing. Don’t. Google uses the description to determine if your ad matches search queries and -- for people who use the Shopping platform exclusively -- it’s the only pitch you get.

So again, get detailed. This ad -- if you haven’t picked up on our theme yet -- strikes a perfect balance between relevant keywords and real, human copy that’s conversational, easy-to-read, and compelling.

3. Divide and Conquer with Product Groups

Complexity is a killer. It’s like Pete Seeger says, “Any darn fool can make something complex; it takes a genius to make something simple.” That’s true in life, business, and especially PLAs.

How do you make your PLAs less complex?

Tight-knit product groups.

Google lets you divide your product groups “using product attributes like category, product type, brand, condition, item ID, and custom labels.”

The smaller your product groups, the easier it is to adjust bids at the individual product level. And as tip one stressed: that’s the key to ROAS. In addition, tight-knit product groups also give you greater control over the search term triggering your ads.

CPC Strategy explains it like this: “Most Shopping advertisers have their campaign structured as one ad group for one campaign, breaking out with product groups to get more granular from there.”

In 17 Reasons Why Single Keyword Ad Groups (SKAGs) Always Win, Johnathan Dane goes to great lengths to prove that this “approach isn’t just for AdWords, it works for social (Facebook, Twitter, LinkedIn, etc.) and display networks.”

Why? Because SKAGs meet search intent head-on. They give you granular control over exactly what appears and allow you to tailor each and every ad at a near-personalization level. Here’s an example of what that looks like applied to AdWords:

With PLAs, the fewer products you sell, the closer you should get to one-to-one: one product, one ad. If that’s not possible, creating individual ad campaigns based on tight-knit product groups still gives you full control over a host of Google options:

• RLSAs for remarketing (i.e., retargeting)
• Auction insights for competitive analysis
• Mobile control to separate device types
• Group breakouts to divide by brands, products, types, GPCs, and custom labels.
• Negative keywords as outlined above
• Geo-targeting for localization

This is optimization at its best. But what exactly should you be optimizing for?

4. Balance Your Bidding with ROAS

Ecommerce comes down to one metric: cost versus profit. Once you put Google’s revenue tracking into place, the lure will be to optimize based on “cost per conversion.”

Instead, make your return on ad spend (ROAS) the be-all-and-end-all by factoring in your margins over time. For example, a 2.0 ROAS might be great, but only if the cost per sale in addition to the cost per conversion doesn’t offset your margins.

Here’s how the smart folks at KlientBoost handle the issue: Create two columns in your AdWords account once you have revenue/transaction tracking in place:

1. Total conv. value = total revenue generated from that campaign, ad group, product group.
2. All conv. value / cost = Your revenue generated divided by your ad spend cost (this is your ROAS/ROI).

Knowing your true ROAS for PLAs -- as well as all your online advertising -- is the only way to ensure your bidding is balanced. Otherwise, you run the very high risk of falling for lesser metrics and sinking your money into campaigns that look great when it comes to vanity and revenue but don’t make you money.

If you hire a PPC agency to run your ads for you, this is quite possibly the most important lesson to take away: insist that they report ROAS as outlined above.

5. Bring ‘Em Back with Retargeting

No doubt you know about retargeting (also known as, remarketing). But just in case, here’s a description from AdRoll:

“Retargeting converts window-shoppers into buyers. Generally, 2% of shoppers convert on the first visit to an online store. Retargeting brings back the other 98%. Retargeting works by keeping track of people who visit your site and displaying your retargeting ads to them as they visit other sites online.”

And that 98% isn’t just fluff. As Shopify Plus reported in How to Execute an Effective Ad Retargeting Campaign That Works: “retargeted ads led to a 1046% increase in branded search and a 726% lift in site visitation after four weeks of retargeted ad exposure.”

And it’s especially powerful for ecommerce. Dynamic retargeting allows you to remind and recapture lost visitors -- visitors who clicked your PLA, but never converted -- by building ad sets that automatically update with the exact product in which they showed interest. AdWords, Facebook, AdRoll, Perfect Audience, and others all contain remarketing tools that make this easy.

Once you connect your product feed to one of those tools, set a budget, and select a rotation schedule, retargeting takes care of the rest.

Image Source: Quartic USA

In addition to staying top of mind, you can also create custom sequential ads with incentives -- like discounts -- to display based on the amount of time that passes between the initial visit and the ads themselves.

Best of all, the cost per acquisition (CPA) of a dynamically retargeted campaign is far less than the original PLA.

Cut to the Ecommerce Chase

Remember the big numbers we examined? $32.7 billion in total online advertising just during the first half of 2016 alone. Competition is fierce. And simply investing in search and mobile advertising -- more of the same -- won’t cut it.

What will cut it, however, is shortening the funnel from search to sale.

PLAs do exactly that. Be sure to (1) go negative with your keywords, (2) get detailed with your product feed, (3) divide and conquer with tight-knit groups, (4) balance you bidding with ROAS as the supreme metric, and (5) bring ‘em back with remarketing.

Follow those tips and your clicks, ROAS, and sales will thank you.