Picture this: You’re running your Google Ads campaign, and everything’s going well. You’re pleased with your return ($2 revenue for every $1 you put in), so you decide to channel more of your marketing budget to Google Ads, and 2x your ad spend.
Overnight, your click through rate (CTR) and conversion rate nosedives. Your ROI drops from 100% to 50%, then to 30%. Taking your other costs into account, you’re losing money on these ads, and you’ve got no idea what you did wrong.
Sounds scary, huh? Well, you’re not alone. Plenty of eCommerce store owners have been in the exact same situation.
If you’re trying to figure out how to scale up your ad campaigns WITHOUT experiencing a drop in performance, you’re in the right place. In this case study, we walk you through how we scaled up our client’s ad budget by 4x to bring about 5.1x more conversions, and discuss the techniques we used to do this. Read on to find out more!
This case study involves Casely (how’s that for a tongue-twister?), which is an eCommerce company that sells fun phone accessories, including cases and phone rings. We love their products. Seriously, check them out.
About CASELY
Industry
eCommerce (phone accessories)
Services
Advertising platforms
Google Ads
What happens when you increase your Google Ads budget
If you’ve been running Google Ads campaigns for quite some time now, you’ll probably realize that it’s easier to get great results when you’re first starting out, but harder to maintain those results when you scale up your ad spend.
Here’s the thing: Google has a pretty good sense of which consumers are likely to buy your products/services, based on their browsing habits, search history, purchase history, etc. When you’re first starting out, Google serves your ads to your ideal customers (ie the folks who are MOST likely to buy), and that’s where you get your conversions.
What happens as you scale up your ad spend? Well, at this point, you’ve already “milked” the group of consumers who are most likely to buy. Assuming you’ve put in a frequency cap, Google can’t keep showing the same ad to the same group of consumers over and over again… so they start branching out, and showing your ads to other consumers.
To be clear, Google isn’t showing your ads to consumers that are completely uninterested in your product (unless you’ve got zero targeting set up). That said, the longer you run your campaigns, and the more budget you put in, the more Google has to serve your ads to consumers who aren’t 100% into your products.
In some cases, advertisers find that as they increase their budget, they experience lower click through rates and lower conversion rates. When this happens, your Cost Per Click (CPC) and Cost Per Conversion (CPA) shoots up as well.
Obviously, this is problematic. If the performance of your Google Ads campaigns decreases with every additional dollar that you put in, this basically gives you little incentive to focus on Google Ads as a strategy, and use these ads to drive more conversions for your store.
The good news? Scaling up your Google Ads doesn’t have to lead to a drop in performance. In fact, this typically only happens when you increase your budget without tweaking or optimizing your ads in any way.
Alright, now that you understand the logic behind why scaling up your budget potentially leads to lower conversions, let’s go ahead and dive into our case study👇.
[Case study] How to scale your Google Ads campaigns by 4x (and bring about 5.1x more conversions)
Casely was already profitable when they approached us, but they wanted to grow even more quickly. They were hoping to do this by investing more in Google Ads; more specifically, their goal was to grow their Google Ads account to a 5x spend in two months.
If you spotted the discrepancy there, nope, that’s not a typo.
Casely WANTED to increase their budget by 5x, but their campaigns ended up more profitable than they had imagined. Basically, we got them 5.1x more conversions with just a 4x increase in budget, so they didn’t have to spend the extra money that they had already put aside!
For those of you who are wondering how we did this, we basically analyzed their ad account and found areas in which they could improve. Our recommendations for Casely were:
- Increase revenue and conversion rate with dynamic remarketing
- Increase revenue and conversion rate with RLSA campaigns
- Protect brand by bidding on branded keywords
- Capture more conversions with higher search impression share
- Optimize shopping campaigns by experimenting with bidding, creating Smart Shopping Campaigns, and more
If you’re an eCommerce store owner (or you’re doing marketing for an eCommerce store), chances are you’ll be able to use these same techniques to optimize and scale your own PPC ads. Read on to find out more!
Strategy #1: Increase revenue and conversion rate with dynamic remarketing
What’s the difference between standard remarketing and dynamic remarketing?
With standard remarketing, you’re showing a static ad to a consumer who’s previously visited your site. With dynamic remarketing, you can personalize your ad to this consumer based on the specific product that they browsed, or added to their cart.
In other words: if Nicole looked at a Black Leather iPhone XS Case on your site, but didn’t purchase this, she’ll now see this product on your remarketing ads on Google’s partner sites. Pretty cool, right?
How to set up dynamic remarketing: To set up a dynamic remarketing campaign on Google Ads, you’ll have to create and upload your product feed, then create a new remarketing campaign in your dashboard. For step-by-step instructions, check out Google’s guide.
When you should set up dynamic remarketing: Dynamic remarketing is a great fit for most eCommerce store owners, but note that you’ll need to generate a decent amount of traffic before you can start remarketing to consumers.
If you’ve just launched your eCommerce store, and you’re getting, say, 20 hits per day, then focus on driving more traffic to your site before your launch your dynamic remarketing ads.
⚠️ Pro-Tip ⚠️
You can also look at your Google Analytics to figure out how effective remarketing (both dynamic and standard) will be for you. Here, look at your conversion rate for Paid Search, and compare single session vs multi-session users. The bigger the disparity in conversion rates, the more you’ll benefit from remarketing campaigns.
In Casely’s context: Casely was already running standard remarketing ads when they came to us, which was a step in the right direction. After analyzing Casely’s Google Analytics stats, we saw that their multi-session users (returning users) converted at a much higher rate of 9.04% (compared to non-returning users’ 5.23%):
To take Casely’s remarketing efforts to the next level, we set up dynamic remarketing for them.
Strategy #2: Increase revenue and conversion rate with RLSA campaigns
If you’re new to RLSA, this basically refers to Remarketing Lists For Search Ads. With RLSA campaigns, you can target your previous website visitors, and serve search ads to them while they’re searching for relevant products/services.
How to set up RLSA campaigns: Want to set up an RLSA campaign? You can either create a remarketing list, then set up a new campaign, or create the list and add it to your existing campaigns or ad groups. For step-by-step instructions, check out Google’s guide.
⚠️ Pro-Tip ⚠️
With RLSA campaigns, most advertisers simply target generic keywords that are relevant to their products/services. For example, an eCommerce store selling hiking gear might serve their ads to consumers who have previously visited their store, and are now searching for keywords such as “buy hiking gear online” or “online hiking gear shop”.
That said, another lesser-used strategy is to target consumers who are searching for your competitors’ branded keywords. Branded keywords are basically keywords that include a brand name, such as…
- {BrandName} shop online
- {BrandName} buy online
- {BrandName} product
Here, make sure that you directly or indirectly state why your products are superior to that of your competitors’, and give your customers a reason to revisit your store and convert.
For instance, you could bring social proof into play by talking about how a best-selling product has been purchased by 50,000 customers in 59 countries, or you could mention that you offer free 30-day returns, while your competitor doesn’t.
When you should set up RLSA campaigns: If you’re already running display remarketing ads, we recommend adding RLSA campaigns to the mix to supplement your efforts. 47% of internet users use an ad-blocker today, and while you won’t be able to reach out to these users with display ads, that’s where RLSA ads come in.
In Casely’s context: The RLSA campaigns that we set up for Casely performed exceedingly well; in fact, they were even more effective than the dynamic remarketing ads. All in all, these ads generated 10x ROI for Casely:
Strategy #3: Protect your brand by bidding on branded keywords
We’ve just explored a similar concept with the previous strategy, but this one revolves around bidding on your own brand instead of your competitors’ brand.
Now, some eCommerce advertisers think that it’s a waste of time bidding on their own branded keywords, because they’re likely to appear as the top organic result for these keywords anyway. But in some situations, appearing as the top organic result isn’t good enough.
Think of it this way: if you don’t bid on your brand keywords, and none of your competitors bid on your brand keywords, then everything works out well; there’s no harm done. But if you don’t bid on your brand, and your competitor does, this means that their ad will appear before your organic listing:
This could potentially lead to you losing clicks and conversions to your competitor. Yikes!
How to bid on branded keywords: Bidding on brand keywords is pretty straightforward. Simply create a new search campaign, and input the keywords that you want to target.
When you should bid on branded keywords: You should bid on your branded keywords if you’re getting less than 100% of the clicks for your branded terms (which is the case for most folks).
To check your brand’s CTR, log into Google Webmaster Tools’ keyword data section, and search for the relevant keyword. Search Scientists, for instance, only has a 71% CTR for our brand name “Search Scientists”. This means that 29% of clicks are going to other listings (these are likely to be paid ads that are appearing ABOVE our organic listing).
In Casely’s context: After embarking on the project with Casely, we started bidding on several brand terms. After creating a campaign for branded keywords, traffic to Casely site has increased month over month, and the store has also seen a significant increase in revenue via this source of traffic:
Strategy #4: Capture more conversions with higher search impression share
Simply put, Impression Share (IS) refers to the percentage of impressions you appear for a particular term. For example, if “Cute iPhone Cases” is searched 100 times a day, and you appear 56 times, this translates into a 56% impression share.
Now, there are two reasons why advertisers lose IS, and those are budget and ad rank.
First and foremost, if your budget is too low, you might run out of budget at, say, 6pm. This means you’ll lose out on impressions for everyone who searches for relevant terms from 6.01pm to 12am… not good.
Next, ad rank can also cause you to lose impressions. Your ad rank is determined by multiplying your quality score x your CPC Bid, so it’s important to ensure that your ads and landing pages are high quality and relevant to your consumers.
How to identify your impression share: from your Google Ads dashboard, look under the column “Search Impr. Share.’’ You can look at your impression share at campaign level, or drill down even deeper (to ad sets and ads).
Next to the “Search Impr. Share” column, you’ll also see a “Search lost IS (rank)” column. This shows the auctions that you’re missing out on because your impression share is too low. If your IS is 40%, your lost IS will be 60%. If your IS is 30%, your lost IS works out to be 70%. Pretty simple, right?
When should you strive for higher IS: As a general rule of thumb, if your IS is 50% or lower, then it’s likely to be a factor contributing to poor campaign performance. Here, you’ll want to bid higher, so that you can increase your IS, and get more conversions.
⚠️ Pro-Tip ⚠️
To boost your IS, don’t just go into your campaign and blindly increase all your bids. This kills your profit, and hurts your Return On Ad Spend (ROAS).
Instead, look at the specific campaigns or ad sets in which you’re already achieving a good ROAS. Then start to bid more aggressively in these areas, whilst maintaining your bids in other campaigns (with lower ROAS).
In Casely’s context: As you can see in the screenshot below, Casely was missing out on an average of 70% of their auctions before Search Scientists re-engineered their campaigns.
After we increased Casely’s bids on key campaigns, we generated more clicks, conversions, revenue and we increased the IS, maintaining a top-notch ROAS:
Strategy #5: Optimize shopping campaigns by experimenting with bidding, creating Smart Shopping Campaigns, and more
Apart from increasing bids on certain products to increase IS, and highlighting high priority products with price extensions, Search Scientists also optimized Casely’s PPC campaigns in several other ways. This includes:
- Reorganizing the shopping feed so we could better see what products were selling, and which weren’t.
- Segmenting out best-selling products into their own Smart Shopping Campaigns.
- Segmenting out best-selling as well as poorly-performing products into their own Smart Shopping Campaigns.
- Experimenting with manual bidding vs automated bidding.
There are several things to unpack here, so let’s go through these one by one.
Reorganize your shopping feed
Firstly, if you’ve got many SKUs and ads, you’ll want to start by reorganizing your shopping feed and coming up with a high-level overview of your best and worst-performing products. From here, segment out the best and worst products into their own campaigns.
Segment out poorly performing products
Remember: the key to nailing Google Ads is to make sure that your campaigns, ad sets, and ads are hyper-relevant to your target audience. Bearing this in mind, if a certain category or type of product just isn’t selling, it could be because your offer or messaging just doesn’t resonate with your consumers. Once you segment out these products, though, you can experiment with your offer and messaging until you find that sweet spot.
At the same time, you can also use Smart Shopping Campaigns to show your ads on multiple channels (Youtube, Gmail, Display and Search). This is what we did for Casely. Assuming your previous Display or Search campaign didn’t perform well, there’s still a chance that your ads and products will be better received on YouTube and Gmail.
Segment out best-performing products
With your best-performing products, there’s no need to fine-tune your offer or message, but you should still segment these out into Smart Shopping Campaigns. Since these products are getting great results on Display / Search, it makes sense to try out other channels as well. This way, you’ll maximize your profits, and ensure that you’re not leaving money on the table.
Experimenting with manual bidding vs. automated bidding
Does manual bidding or automated bidding work better? To be honest, this is a highly contentious issue that industry experts are constantly splitting hairs over.
Now, what we will say is that there’s no one size fits all solution; in some cases, manual bidding might work better, and in others, automated bidding might drive more results.
Bearing this in mind, the best strategy is to test out both approaches, and let the numbers speak for themselves. With Casely, we found that automated bidding was the better option; this gave us 77.17% more conversions and a 73.34% higher CTR.
A final word on how to scale your Google Ads account (without losing conversions)
If there’s one takeaway that we hope you get from this case study, this is it: it’s possible to scale your Google Ads account without compromising your conversion rate, and having the profitability of your ads nosedive.
How do you do this? Simple. Don’t just increase your budget and call it a day; instead, make sure you’re constantly tweaking and fine-tuning your ads.
As a recap, here are some of the strategies that we used in this case study:
- Increase revenue and conversion rate with dynamic remarketing
- Increase revenue and conversion rate with RLSA campaigns
- Protect brand by bidding on branded keywords
- Capture more conversions with higher search impression share
- Optimize shopping campaigns by experimenting with bidding, creating Smart Shopping Campaigns, and more.
These are tried-and-tested strategies that are applicable to most eCommerce stores, so go ahead and experiment with them. Now, remember to implement just ONE change at a time (so that you can attribute the increase/decrease in your conversion rate accurately!), and track all your numbers and key metrics while you’re A/B testing your strategies.
If you have any questions about how we implemented these strategies for Casely, or you need some help troubleshooting your Google Ads account, we’re here for you!
