How to Improve Google Shopping Ads ROAS with Priority Bidding

​​Congratulations! You’ve gotten through the tough part of Google Shopping: getting your account and your shopping feed running. But are you getting the most out of your campaigns?

Today, I’m going to show you a strategy that will help you to get the highest return on your ad spend. It’s called the priority bidding structure.

It’s a bit involved but I’m going to walk you through it. We’ll cover:

• How the priority bidding structure works in Google Shopping campaigns.
• How to use it to optimize your bids and negatives.
• Specific tips and examples to help you apply this to your own account.

So if you want to save on spend without sacrificing growth, read on.

What is the priority bidding structure?

Let’s say that you’re a sneaker company. You’ll want to capture users who simply search “sneakers” without specifying a type or brand—as this will expand your brand awareness and capture top-of-funnel traffic. However, there’s much more competition on the Shopping SERP for generic terms—which drives up the price for clicks that don’t always result in a conversion.

So you’ll want to adjust your bids and negatives to keep your costs in check, but that will look different for different stages of your funnel. With the priority bidding structure, you’ll have your campaigns split out so you can raise and lower your bids and apply negatives unique to each campaigns.

With this structure, you essentially structure out your Shopping feed based on priority and the type of searches you want each campaign to attract. This allows you to control your bids and only have high spend on clicks that bring in a high return.

Here’s what it looks like:

Now there’s a lot going on here, and we’re going to walk through it in this post. First, you need to understand these three bidding strategies.

Quick note: If you’re unsure about your Google Shopping costs, you might find our Google Shopping benchmarks helpful.

Google Shopping bidding strategies for priority bidding structure

Unlike Search and Display, there is no keyword or group bidding available, so Google Shopping best practices are a bit different.

However, the beauty of the priority structure is that it guides you on how you should be adjusting your bids. And, these are the three bidding strategies that you’ll want to adjust:

Manual bidding

If you feel more comfortable with Search and Display PPC campaigns, manual is a safe bet as you dip your toes into Shopping. Tried and true, manual bidding allows you to dictate how much you’re willing to spend per click—in this case for products of a specific product group.

As you’ll want to adjust your bids based on priority, you’ll have full control over this to make a priority bidding structure (more on this later) as effective as possible. The drawback, of course, is depending on the size of your Shopping account, you’ll have to carve out time to tediously manage bids.

How to adjust for priority bidding account structure: This may feel self explanatory, but it’s easy to capture the magic of priority bidding with the manual strategy since you can adjust your lower or higher bids as needed.

Maximize clicks

Maximize clicks is great for Shopping because it focuses on that end goal of driving traffic to your ecommerce site. In comparison to manual bidding, maximize clicks has the option to layer on a max CPC bid limit at the campaign level—which helps keep the automated strategy a bit more in control while saving you time on individual bids.

The option to set a bid cap is a game changer for Shopping campaigns on max clicks, because Google’s algorithm is solely focused on pulling in as many clicks as possible within your budget—even if it means that the cost-per-click for a click that leads to a conversion is unusually high.

If you want to leverage max clicks on your Shopping campaign, the trick is to set a max CPC bid, but set one realistic to where your current CPC is at.

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How to adjust for priority bidding account structure: While you may not be able to adjust individual bids, you can still make priority bidding work on Max clicks by tweaking your Max CPC bid according to each campaign priority.

Target ROAS

Note: As of April 2021, the automatic bidding strategy, target ROAS, has been reorganized into the max conversion value strategy. We tell you all the details on what that means for your tROAS campaigns here.

I saved the best for last! Target return on ad spend (or tROAS) is one of the most common Shopping bid strategies because it focuses on a popular Shopping metric: ROAS.

ROAS is somewhat more relevant to shopping than CPC because it takes into account the value of a purchase, rather than just the path to the purchase itself. For example, you could have a low CPA due to a high conversion rate in relation to your CPC, but if all those purchases are below $5 you’re most likely not pulling in a healthy return.

However, tROAS has now been folded into the max conversion value strategy. Your best bet is to select max conversion value as your Shopping bid strategy, and selecting to set a tROAS with that is a must. Similar to setting a max click bid cap, you’ll want to set a target ROAS in a healthy spot above where your current ROAS lies, but also where your priorities lie.

How to adjust for priority bidding account structure: For tROAS and priority bidding, you need to think about how the algorithm bids according to your target. When the target is higher, it will bid lower to maximize your return (therefore, applying to your high priority/low bid campaign) and vice versa.

How the Google Shopping priority bidding structure works

So let’s revisit our diagram:

You essentially want to optimize your product feed by splitting it into three campaigns.

• Campaign A: This first campaign has certain negatives set up to only attract general traffic resulting in a low-risk, “wide net” functionality.
• Campaign B: This one acts as your control where you bid competitively and attract your most common traffic.
• Campaign C:  Lastly, this campaign will most likely have lower volume since it’s attracting spot-on searchers that are ready to convert—which is worth the high bid but not worth a ton of effort or time since its targeting is so specific.

Those three campaigns will be set up to attract different traffic across the funnel allowing you to adjust your bids accordingly. If you have a massive feed, you could repeat this advanced Shopping strategy multiple times across different product categories.

You’ll notice that the key differentiator between the campaigns is your product subdivisions and your negatives.  Think of subdividing as an opportunity to bid more specifically on groups of products in your inventory based on priority and appeal.

Start by identifying which products in your inventory are the most important or that would drive the most revenue. From there, you can start subdividing by product type within each campaign to set a higher bid with your priority items and a lower bid with your lower margin products.

How to make negatives work for your Google Shopping priorities

We know that, since Google Shopping relies on product attributes over keywords, a negative keyword list can make or break your shopping campaign. However, you don’t want to only jump at the chance to add irrelevant keywords as negatives. A thoughtful negative keyword list will help direct your Shopping searches to the correct priority campaigns.

As you can see with the priority structure above, you want to funnel your product specific terms down to the high intent, bottom campaign by negating those terms out of the top-of-funnel campaign.

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Your Google Shopping negative keywords could also vary by your goals and specific situation. For example, there may be some competitor brand names that you don’t want to show for because those auctions are more expensive and may cause you to have a lower click-through rate.

Negating out your own brand name is another common practice in the priority-based Shopping structure. This is because people who search for you specifically may be repeat customers or have a high likelihood of converting—which are worth a high bid.

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Should you use the priority bidding structure?

If you’re already running Google Shopping and are unsure if you should try out a new campaign structure, it’s time to take a step back and audit your account. Evaluate your month over month performance. This way, you can see trends of a decline.

More importantly, the best indication of a Shopping campaign in need of a makeover is the Google Search Terms Report. While it doesn’t give us the full picture anymore, you can still get an idea of the types of searches you’re showing for and whether your SERP results are too broad or too narrow.

How to bid in Google Shopping: priority account structure recap

We covered a lot in this post so let’s recap:

The priority bidding structure is helpful for maximizing ROAS by prioritizing where your valuable bids should go.

There are three common bidding strategies that can work with this model, but here’s how you’ll need to adjust them:

• Manual: Adjust your bids accordingly for each product.
• Max clicks: Lower or raise your max CPC bid limit depending on the campaign priority.
• Target ROAS: Raise your target when you want to bid low, lower your target when you want to bid high.

Finally, make sure you’re using negative keywords strategically to compliment your priority structure.

So, are you going to try out a priority-based campaign or updating your Shopping bidding strategy? Let us know in the comments!