Shopping Campaign Segmentation

June 17, 2015

By June 17, 2015insights

Shopping Campaign Segmentation

Google has made some dramatic strides in their Google shopping tab, since they first launched Froogle in 2002. The original shopping comparison section is gone, and a full-fledged ecommerce store now exists to help shoppers purchase whatever items they desire as they search online.

For businesses this is a tremendous boon, because as Google Shopping evolves the shopping campaigns to get traffic to your product do as well. Businesses now have the ability to sell their wares on the largest search engine in the world. Even better, Google Shopping now provides ecommerce advertisers with the ability to segment your market for improved search engine marketing campaigns. However, with all the options available for search marketers, it is best to understand more about how Google shopping campaigns work.

Understand how you want to promote your inventory on Google Shopping

Before you create your first campaign for Google shopping remember the following items.

  1. How much inventory do you have your on Google Shopping? Do you have 10 products? 1,000? 10,000? The number of products you have can influence your campaign, because it could determine what you promote.
  2. What is your inventory turnover? The products themselves are not the only concern. If you own a fashion company, then you have to remember that seasons can be a big factor in what you promote.

Therefore, understand the turnover that you face in your industry.

  1. Which products contribute the most to your bottom line? Most companies have a loss leader that they sell. They know those loss leaders entice buyers to check out other products.

A famous example of this is bananas at Trader Joes. In the history of the company, they have kept the price of bananas at $.19 per banana for the past 13 years. They know that while they might lose some money on the banana. However, Trader Joes make it up when customers visit their store to purchase a banana and a cart of other goods. While a loss leader is great, you only want to promote it if you know it leads to other sales. Otherwise, you might want to promote your profitable products first. That means you need to asses beforehand which products contribute the most to your bottom line.

  1. Will your campaign promote your entire inventory or specific subsets? Generally, specificity is good. While it is great to think that you have 10,000 products out there bring in revenue, do not waste your time on 10,000 when the top 100 bring in 80% of revenue.

Again, assess which products work best. You can start with a campaign for your entire inventory, and then shrink that down rapidly as you determine your best-sellers.

Segmenting your campaign.

After you review your inventory, it is time to start segmenting your campaign to increase your conversion rate. You can segment by brands, categories, and products:

Brands– The first thing you probably want to segment on a Google Shopping campaign are brands. If your store sells multiple brands, then you might want to determine which brands are popular at the moment. For example, if you sell smartphone accessories, you might want to break down the brands by Android, iPhone, or Windows phone. If you want to get more granular, see whether Samsung, HTC, or Motorola brands perform best in your campaign. By breaking down pay per click campaign by product lines, you can increase the click through ratio, and thereby decrease your costs per sale.

Categories & Types– Often you might not find it easy to segment your products by brand. That is why Google allows you to also segment your shopping campaign by categories. To continue with the previous example, you might want to use categories when a brand might not be as prominent as the category. For example, the smartphone category get more attention than Samsung. Even though Samsung is the largest smartphone maker in the world, it might not be the strongest word to use for obtaining new clients through search. That is because many people break down their searches for smartphones by Android and iPhone. This means that your customers might miss out on your offers, if they are not exclusively looking for Samsung keywords – Category segmentation helps you avoid that conundrum.

Just be aware that the downside to this is that you might not segment the market enough. If you just use smartphones, and only sell Android or iPhone equipment you could also get wasted clicks from Windows users.

Product ID- If you want to get the highest level of segmentation then you might want to use the product id. We discussed above finding the top performing items in your Google Shopping store. Obviously, when you do a campaign around a specific product you can be very specific in your marketing. This means that you have the opportunity to target exactly who you want to purchase your products. Maybe you want to only sell Samsung Galaxy S6, because it is the hot product right now. By segmenting by product id you can avoid bringing in prospects interested in Samsung TVs, tablets, laptops, or netbooks- Why waste valuable advertising money on the wrong product?

The biggest drawback of this approach is that you might need to run a lot campaigns to get enough sales. After all, if you run campaigns on your top performing products then you might need anywhere between 10-100 campaigns running simultaneously. That can be a lot to manage. You might need help and a good organization to do that properly. However the additional targeting is generally worth it.

Final Thoughts

Google Shopping campaigns provide a great way for ecommerce stores to extend their marketing. By having companies pay for products directly from search, you can remove steps from the process.

Placing ads on Google Shopping can increase your share of the revenue. However, you need to know how to segment your market. Let us know at Shout if you have any further questions how to segment your shopping campaigns or you need further assistance with Google Adwords Management.