Google Ads for Ecommerce
Updated: Sep 8, 2023
When everything goes great, advertisers double down on what works. But when the ship is close to hitting the sand, businesses want to aim to diversify. Unlike service companies and B2B companies who Google Ads serve as their main source for traffic, eCommerce (Specifically websites that sell physical products) relies mostly on social media. I think the best way to describe it is that Google is where you find what you need, and Facebook is where you buy what you like. Now more than ever, businesses that relied heavily on social media ads to generate revenue for their business, are looking to manage their risks by adding alternative paid traffic sources that can take some weight off their main paid advertising platforms which in most cases is Facebook and Instagram.
The problem is, no other social media platform has anywhere close to the efficiency and performance rates of the Facebook advertising platform and as a result, they are stuck between the need to find alternatives and the inability to find alternatively profitable paid advertising channels. If you don’t know which horse is going to win the race, then just bet on the biggest and strongest horse, right? Slowly, Google Ads has been building up and trying to position itself as the leading alternative for eCommerce businesses that advertise on Facebook. From a somewhat boring and technical PPC platform that is mostly designed for businesses who want to appeal first on Google search, Google has released many different products designed to attract eCommerce companies that sell products and want to promote their products visually across different spaces on the web.
It’s important to note that Youtube ads were always a part of Google Ads, but for many advertisers who did well on Facebook ads, they couldn’t translate the same success over on youtube.
Let’s look back for a second…
Google Ads historically have been segmented into 5 main areas.
Google Search. This includes people who search directly on Google & can link their google maps location if they want to promote their business and link it to Google search or promote it on Google maps.
Google Shopping. Google shopping offers a more attractive solution for eCommerce companies that sell physical products as it lets customers browse through product images and click only on what they like after they saw the product. The main difference between viewing a product on google shopping vs on social media is that on Google shopping it’s a direct intent search which means you are searching for that specific product. This means that Google shopping will offer a wide variety of alternatives and price comparison will play a huge role. If on Facebook, for example, I can reach someone who might be interested in Nike shoes without putting my ad right next to my competitors. On Google shopping it’s different. On the majority of searches, people know what they are searching for which on one hand is great since they are ready to buy, but on the other hand, it drives up the price per click and makes it harder to compete especially against the bigger brands.
Like on Google search, if you have existing traffic and sales on your website, many of the conversions will be based on your brand terms. People who search back for your brand and will click through a google shopping ad to get back to your website. Unlike Google search, Google shopping doesn’t offer the option to target specific keywords. It only offers the option to add negative keywords which are keywords you don’t want to appear in.
In other words, you can choose what keywords not to appear in but can’t select what specific keywords you want to target. When you dive into your search terms, you will notice that many of the conversions you thought were coming from new traffic, actually include people who search back for your brand and get to it through clicking on Google shopping. Analyzing from a purely prospecting environment (bringing people who have landed on your website for the first time) is for the most part challenging on Google shopping as users more often search with an intent to find something specific and price compare, and less likely are browsing to discover something new. If they happen to just be browsing, in most cases, it’s hard to translate that campaign into a profitable business model as the cost per click is usually high or the conversion rate is low. In other words, it’s hard to scale these types of campaigns like you could potentially do on Facebook.
Display ads are the ads that you see everywhere across the web. Ads that are placed across more than 3 million websites want to earn more revenue by placing google ads on their website. For the most part, this placement is considered to be the lowest-performing placement on Google ads in terms of performance. The cost is much lower but the quality is nowhere close to what you get on Google search or google shopping. One of the main reasons here is quality control. When you advertise on Google or Facebook you advertise on their website directly. On Display ads, you advertise on partners’ websites who make money only when your ad is clicked on. The placement of a specific ad holds extreme value. There is a reason companies like Nespresso choose very specific locations of where they open stores or very specific areas or locations that they advertise in. Where your ad appears and what’s next to it make a massive difference. On Google display, you will find low-quality traffic and poor results for the most part. It takes a massive amount of research and analysis to filter through all these partner websites to find exactly which ones have the potential to perform well and which should be terminated. It’s extremely time-consuming and ineffective and usually, most conversions come here when you target existing users and use it for remarketing campaigns. It’s a good tool to reach people outside of major social media platforms and Google but isn’t an effective placement to drive sales and growth. In this placement, you have a wide variety of targeting tools including keywords, audience targeting, website visitors, and many different types of exclusions. On Display ads, businesses that host your ads make revenue only when your ad is clicked on. So they have an incentive to make sure it gets clicks. That means that the location that they position your ads on their website some of the clicks on it may be questionable and done in favor of their interest and not yours.
Gmail ads. I think that it’s a placement that is less talked about. It might be because many advertisers haven’t found much success using it, or the fact that some targeting capabilities are only open to vetted advertisers to prevent spamming. Gmail ads are billed based on a pay-per-click model and are a great way to interact mostly with customers who are in the process of buying or haven’t visited your website in a while. Using targeting tools like an email list or the Google tracking pixel to define who to target and when offers you the chance to reach them directly in their inbox. It could be in the form of offering them a special offer, or just an opportunity to reconnect and bring them back to your website.
Youtube ads. Youtube ads can be a great platform for advertisers, but I think a big difference here is the clear borders between industries of where Youtube ads can be effective or not. How many times for example did you purchase a gadget or a shirt from an ad that you’ve seen on Youtube? And how does that compare to Facebook? Off the bat, you would expect Youtube ads to perform similar to the way Facebook ads perform but there is one big difference. It’s the when and where. Youtube ads appear before or in the middle of the videos and in most cases the only thing you want to happen is for the “skip button” to appear as most people feel the ad is just a disturbance to whatever they are watching now. On Facebook ads, (great) ads blend into your newsfeed as regular posts. When we are not aware that we are being sold to, we are more likely to be interested. Youtube ads offer all the targeting capabilities you can ask for since they could be based on whatever people search on Google, and simply target these users when they get to youtube with relevant content. The main issue is the timing.
Youtube ads generally are harder to succeed in if you are selling low to mid-cost products as the cost per acquisition is higher than what it is on platforms like Facebook. This is usually because the cost to get someone relevant to your website on youtube is higher and the conversion rate is usually about the same or lower. Because Youtube is the main place for “How To” tutorials and “know-how” videos, companies that sell information products tend to do well on Youtube. Their ads blend naturally and they can target exactly what users have been watching or searching for. The main issue is the cost per action (conversion) is relatively high so it requires that they either sell a high ticket product or have a very high strong customer retention to support paying more for a single view click or conversion.
Historically, these have been the main domains for eCommerce owners for Google ads, but that wasn’t enough. Google ads was been looking enviously at what Facebook has become for the Ecommerce world and to figure out how can they get a bigger market share. They understood that the current options help brands target back their own customers, but the struggle to get new customers and build a strong traffic channel using Google ads was still the same. I imagine there been some kind of high-level board meeting where someone basically suggested, “Hey, why don’t we be a little more like Facebook ads. Instead of being a keyword-based platform that instead of letting them choose the keywords and showing them what people searched for, let’s just offer to automate everything and just pick where and when to show their ads. Then, advertisers can just measure the conversions and ROAS (return on ad spend that we report back).
So they released more ad formats and features to combat that.
Smart , Discovery & Performance Max.
It’s important to note that these new formats don’t offer a new placement or ad space to reach your customers, but a more simple way to create and manage your campaigns. Google still offers the same placements for your ads, so even if you choose these objectives, the ads will still appear on their 5 main placements (Search, Shopping, Display, Gmail & Youtube). The ads will appear across these places differently depending on how you customize the ads. It doesn’t really matter what Google calls it, it’s more about them rebranding the way they package the ads, and not about new ways or placements that your ads will reach users. This rebranding of ads is part of Google’s effort to follow the Facebook lead and make advertising based on your goals and not based on which keywords you are targeting or what keywords customers search for. In terms of the actual work, it does make the process easier. Just throw in a bunch of creative assets such as your product feed, videos and images, and a bunch of copy variations, and Google will shake and bake some variations to find winning formulas. In some formats like Performance max, you can throw in “Audience Signals” which are some targeting selections that will “guide” the algorithm towards finding your future customers but in most cases it will just revolve around their automation. Yes automation, the favorite word that advertising platforms like to use. I find it concerning that advertising platforms are always trying to shortcut the way of creating ads so you can get to the ad spending part faster. Side note: In my opinion, it won’t be anytime soon a copy and paste or a template-based advertising environment and I think rushing to uploading creatives is never in advertisers’ best interest. So in simple terms, these new ad formats are designed to make the ad creation process more simple and more automatic. To give you less control over who sees your ad and when and where, and have you focused on the number of conversions and ROAS Google reports back to you.
The concerning lack of transparency.
The more power we give advertising platforms, the less power remains in our hands. One of the biggest changes that have evolved along with all these new ad formats, is the lack of transparency to the data origin of these results. If on search and display campaigns you select the keywords and on shopping, then you have access to see exactly what search queries account for all your results. Smart and performance max campaigns don’t include that information. Aside from insights, you are unable to view what search query a user searches for when seeing your ad, or in most cases on which website or URL that click took place. Google might argue that it’s the exact same thing as Facebook ads. Facebook ads don’t show you which search term a user searched for or where exactly the ad appeared but there is one big difference: Facebook is not a search engine and most conversions coming from Facebook ads come on Facebook or Instagram directly. Google ads have partners, has Youtube, and has a lot of different placements areas. Showing what the user searched for or where the ad appeared when a user clicked on it in my opinion is something that they should automatically include since they offer it on other ad formats and they have that data. In my opinion, it’s designed intentionally so advertisers focus solely on the conversions reported and on the ROAS and not on where that conversion came from. This opens up the door for conflicts of attribution where a business already has existing sales and traffic, ads on Smarts or performance max campaigns, and has no way to verify the true contribution and must rely on Google’s own reporting to decide whether or not the campaigns are profitable or not. Again, Google can argue that there is no difference between these new features and what Facebook offers, but I would stress that the main difference is that Facebook is known to be the main traffic channel for the majority of eCommerce brands used for driving sales and Google is a secondary source. Letting platforms tell you how they are performing without giving you the exact details of each conversion is like letting your employees report back on how many hours they worked and how much you need to pay them. In both cases, you really have to trust them. If you don’t see the work they did helping the company overall, then you will start suspecting that perhaps that work doesn’t provide the necessary value you were looking for. This is especially true when you are currently advertising on a platform like Facebook and trying out Google ads as an additional traffic source. If you can’t verify where these transactions came from and don’t see a difference in your overall revenue or sales when adding it, then reconsider your strategy.
Lift Test: The only way to move forward.
Some of my readers sarcastically enjoy commenting back and saying that I mostly just alert and put everything in a negative light without offering a solution and they are totally right. But here is a solution that I recommend using if you are already using one advertising platform and are adding on another advertising platform that isn’t very transparent about how and where it delivers its ads: Large marketers use a lift test when they add a new type of marketing promotion. A lift test is a relatively difficult experiment if you want to be scientific and have a statistically significant difference but there is a more simple way that I recommend that I still think is worth using.
Let’s say that you are advertising on Facebook and decide to try Google ads. Instead of adding Google ads right away to all your potential customers, select a small audience pool and A/b test it first. If for example, you are selling a product worldwide, select one county first. Randomize the zip codes or audiences based on something random into two groups. One group will be targeted with Facebook ads only and the second group will be targeted with Google and Facebook ads.
Measure the difference between the groups and deduct the added spend by Google ads and find the true return on ad spend of this added advertising investment. If it makes sense, then expand the test or run it on all your audiences. It’s that simple. The same process is also recommended for any other advertising platform that you are considering. Even if you are not running any ads but have a lot of organic sales on your website, then I still recommend using this method before investing money into ads. Large advertising platforms are counting on the fact that small advertisers won’t go through this trouble and will rely on the results that they report. Don’t be one of them. If Google ads are the only platform that you are looking to use and don’t have any traffic or sales, an a/b test won’t be necessary. You can go straight into advertising and if it’s effective, you will see the results and the impact on your sales or conversions.
Google ads is slowly changing its advertising platform to mirror Facebook’s algorithmic approach. Where you could previously choose a placement such as Google Search, Shopping, Display, Gmail, or Youtube, Google automatically distributes your creatives between these placements. The new ad experience streamlines the marketing experience but takes away from Google’s transparency. To combat this, take things into your own hands by running a ‘lift test’ prior to experimenting with a new advertising platform.