What do you do when you don’t know where you are going? You open Google Maps.
ACoS is like Google Maps for Amazon Ads. It tells you if your advertising strategy is on point and scaling toward your business goals.
But how do you calculate ACoS for your business? And what parameters affect it?
This blog gives a quick overview of Amazon ACoS, how to calculate it, and strategies to reduce your ACoS to maximize profits.
Let’s jump into it!
A quick peek into the article:
What is Amazon ACoS and How to Calculate It?
What is ROAS?
ACoS vs. ROAS: What are the Differences
How to Find the Break-even ACoS?
How to Find Your Target ACoS?
What is a Good ACoS for Your Business?
What is TACoS (Total Advertising Cost of Sales)?
4 Advanced Strategies to Lower Your Amazon ACoS
Final Thoughts
What is Amazon ACoS and How to Calculate It?
Before jumping into strategies, let’s first understand what Amazon ACoS is!
By definition, Amazon ACoS, or Advertising Cost of Sales, measures the efficiency of your advertising campaign.
It is the percentage ratio of the total amount spent on advertising to the total amount of revenue generated from those ads.
Here’s the formula:
ACoS = (Ad Spend / Ad Revenue ) x 100%
In short, ACoS tells you how much money was spent on advertising for every dollar earned from the ad campaign.
For example, if you spend $100 on ads and generate $200 in revenue, your ACoS is 50%. This means that for every dollar you spend on ads, you earn two dollars in sales.
We always advise you to keep a low ACoS, which indicates that your advertising cost is lower for the revenue generated.
However, the ideal ACoS for your business depends on many factors, such as:
Factor #1: Your Product
The first factor that influences your ACoS is your product itself.
The quality, price, demand, and competition of your product will determine how well it sells and how much you need to spend on advertising to attract customers.
For example, if your product is unique, high-quality, and in high demand, you can achieve a low ACoS because customers will be willing to pay a premium price and buy from you without much persuasion.
On the other hand, if your product is generic, low-quality, or in a saturated market, you might need to spend more on advertising to differentiate yourself from the competition and convince customers to buy from you.
Factor #2: Your Keywords
The second factor that affects your ACoS is your keywords. Choosing the right keywords for your advertising campaigns is crucial for reaching the right audience and keeping your ACoS low.
For example, if you sell dog toys, you might want to use keywords such as “dog toys,” “dog chew toys,” “dog squeaky toys,” etc.
These keywords are relevant to your product and have a high search volume.
You might face high competition and high bids for these keywords. This results in a high ACoS.
On the other hand, if you use long-tail keywords like “dog toys for aggressive chewers,” “dog toys for large dogs,” “dog toys made in the USA,” etc., these keywords are more specific and have lower search volume, meaning low competition and low bids.
This can result in a low ACoS because you pay less for each click.
Factor #3: Your Bids
The third factor that impacts your ACoS is your bids.
Having the right bidding strategy is essential for controlling your ad spending and maximizing your return on investment (ROI).
For example, if you bid too high on a low-performing campaign, you might get comparatively more clicks and sales, but your profit margins will be low, thus increasing the ACoS.
On the other hand, in a high-performing campaign, even if you don’t bid high, you’ll get relatively more sales on these campaigns, thus reducing the ACoS.
However, both scenarios could be better because both limit your growth potential. The optimal bidding strategy is to find the balance between clicks, sales, ad spend, and profit margin. This will result in an optimal ACoS that maximizes your ROI.
Now, it would be impossible to discuss ACoS without mentioning ROAS, so let’s take a look at how these two are related:
What is ROAS?
ROAS (Return on Advertising Spend) measures how much revenue you make in sales for each dollar you have spent on ads on Amazon. It helps you evaluate the effectiveness and profitability of your advertising campaigns.
It is the ratio of the total ad-attributed sales to the total ad spend. For example, if you spent $100 on ads and earned $500 in sales from those ads, your ROAS would be 5.
A higher ROAS usually means a more successful ad campaign.
Here’s the formula:
ROAS = (Ad Attributed Sales / Ad Revenue ) x 100%
ACoS vs. ROAS: What are the Differences
Not much, actually! They’re essentially two sides of the same coin.
ROAS and ACoS both measure ad effectiveness and profitability by analyzing the relationship between ad spend and ad revenue.
Imagine you run an Amazon ad campaign, and you spend $200 on advertising and generate $1,000 in ad revenue.
To calculate ACoS, you would divide your ad spend by ad revenue:
ACoS = $200 / $1,000 = 0.20 or 20%
This means that for every dollar in ad revenue, you spent 20 cents on advertising.
Using the same example, with $200 in ad spend and $1,000 in ad revenue, ROAS is calculated as follows:
ROAS = $1,000 / $200 = 5.0
This means that for every dollar you spent on advertising, you earned $5.00 in revenue.
These metrics help you assess the efficiency and profitability of your Amazon advertising campaigns. ACoS focuses on the cost aspect, and ROAS emphasizes the return aspect.
You can choose to go with either or both based on your preferences.
Now, let’s delve into how to make the most of these metrics in your Amazon advertising strategy.
How to Find the Break-even ACoS?
The break-even ACoS is the point where your advertising costs are equal to the profit margin.
In other words, it is the maximum ACoS you can afford without losing money on your ads.
To calculate your break-even ACoS, simply divide your profit margin by your product price and multiply by 100.
Let’s say you sell a product for $200, and the total costs associated with that product, including manufacturing, shipping, and Amazon fees, add up to $150 per unit.
Then your profit margin is ($200-$150)/$200*100= 25%.
The break-even ACoS for a product is equal to your profit margin, which, in this case, is 25%.
As long as your ACoS remains below 25%, your Amazon ad campaigns are profitable.
How to Find Your Target ACoS?
While break-even ACoS ensures you’re not losing money, target ACoS goes a step further.
Your target ACoS is where you’re not just breaking even but also achieving a specific profit margin after accounting for advertising costs.
Target ACoS = Profit Margin Before Advertising – Target Profit Margin After Advertising
It may be lower or higher than your break-even ACoS, depending on whether you want to maximize profitability or growth.
For example, if you are launching a new product or entering a new market, you may be willing to accept a higher ACoS to gain visibility and market share. On the other hand, if you have an established product or a competitive advantage, you should keep target ACoS lower to increase your profit margin and ROAS.
Let’s continue with the same product example. If you want to maintain a profit margin of 10% after advertising, your target ACoS would be calculated as follows:
Target ACoS = 25% – 10% = 15%
So, your target ACoS, in this case, would be 15%. This means that if you want to keep a net profit margin of 10%, you should only spend 15% of your revenue on advertising.
Note: There is no one-size-fits-all formula for finding your target ACoS, but a good starting point is to use your break-even ACoS as a reference and adjust it according to your goals and situation.
What is a Good ACoS for Your Business?
There is no such thing as perfect ACoS. It depends on the business’s profit margin, industry, and other specific factors.
However, as a general rule, a low ACoS is considered good. However, it may change according to your business goal.
For example,
Goal: Generate Brand Awareness
If you’re in the initial phase of your business, your primary goal is to build brand awareness. In this phase, you’d want to get as many impressions as possible for your brand without losing money.
So, keep your Advertising Cost of Sale (ACoS) at break-even in this stage to maximize your impressions without incurring a loss.
Goal: Product Launch
If you’re launching a new product, your primary objective is to increase sales velocity, get more reviews, and push the product up on Amazon SERP.
In this case, you can go beyond the break-even ACoS to get the initial traction on your product. Even if you run into a loss, the initial traction and sales will give you a better return on investment in the long run.
Goal: Advertising Profit
If your goal is to achieve a certain profit margin, then calculate your target ACoS and work towards achieving that.
However, it’s important to note that Amazon ACoS only considers the revenue you generate through Amazon PPC. It may not be the right metric to track if you want to understand the true profitability of your business.
That’s where total ACoS comes into the picture!
What is TACoS (Total Advertising Cost of Sales)?
While ACoS measures the relationship between ad spend and ad revenue, TACoS takes a more holistic approach and shows you the relationship between ad spend and your total revenue (organic + ad-attributed sales).
TACoS = Ad Spend / Total Sales (Ad Sales + Organic Sales) * 100
The most common TACoS use cases are:
Analyze Business Profitability After Advertising
Track the Total Advertising Cost of Sales (TACoS) to understand the overall profitability of your business.
For example, if your monthly ad spend was $1,000 and your total sales were $10,000 ($7000 organic & $3,000 ad sales),
then even though your ACoS is ($1000/$3000)*100 = 33%, which is on the higher side,
the total ACoS would be ($1000/$10000)*100 = 10%, indicating overall good profitability for your business.
Analyze Profitable Products
If you track the TACoS of each product in your portfolio, you can easily pinpoint products that are heavily dependent on Amazon.
For example, if you see a few products having a high TACoS, it can indicate a high dependency on ads.
Rework the product listing, optimize them with keywords, and get more reviews to increase the CTR and conversion rates, increasing both ad and organic sales for the product.
On the other hand, a low TACoS suggests lower ad spend and more organic sales compared to other products. In that case, you can increase your ad budget to get more ad sales and improve the bottom line.
4 Advanced Strategies to Lower Your Amazon ACoS
Getting your ACoS below break-even is the key to Amazon PPC success. Here are some ways you can do this.
Prioritize Your Best ASINs
Not all products in your portfolio are equally profitable. So, give a quick scan through your product portfolio and find the best-selling products with high CTR and CVR.
Focus more ad budget on these high-performing products, and avoid wasting money on the low-performing ones.
With the SellerApp Advertising dashboard, you can easily identify the high-performing ASINs in your campaigns.
Keyword Harvesting From Auto Campaigns
Auto campaigns are excellent for discovering new keywords relevant to your products. Amazon automatically matches your ads to new and unique search terms based on your product information and category.
Run automatic campaigns for a minimum of two weeks, and use the Search Term Report to find the keywords in your automatic campaigns, driving more clicks and sales.
Move these keywords to your manual campaign for better control and to reduce your ACoS.
Also, audit your manual campaigns and find high-converting keywords in your broad match and phrase match campaigns. Move these keywords to exact match for fine-tuning reach and improving conversions.
The SellerApp Advertising dashboard streamlines the process by showing you your best-performing keywords. With one click, you can also move them to your manual campaign. Here’s how:
Use Negative Keyword Targeting to Reduce Ad Budget Waste
Analyze your existing automatic and manual campaigns for search terms with low CTR or sales.
If a search term has a good amount of clicks but no sales, they’re essentially draining your budget. Exclude these search terms as negative keywords to conserve your ad budget and reduce ACoS.
Also, check for duplicate search terms across different targeting options like phrase, broad, and exact match. Find the targeting option with the best conversion and stick with it. Remove the others for better results.
It also saves ad spend and enhances your campaign efficiency.
Set Different Budgets For Different Conversion Windows
Utilize Amazon Marketing Stream to identify high conversion hours and days in a week for your products.
Shift your ad budget from low-converting times to high-converting time windows to boost sales and lower your ACoS.
This is just the scratching of the surface. If you want to learn more strategies to optimize your PPC and reduce ACoS, read the complete guide.
Final Thoughts:
In the end, Amazon ACoS is definitely an essential metric to gauge the success of your advertising campaigns. But it should always be seen through the lens of your business goal.
If you want rapid expansion of your business, a high ACoS is inevitable. However, if you want to increase your business profitability, prioritize total ACoS over obsessing solely about lowering your Amazon ACoS.
Successful companies know that sales promotions are among the most effective methods of increasing sales, boosting customer satisfaction, and heightening brand awareness. Sales promotions have been used for decades with great success and, no matter your industry or the size of your business, there are sales promotion techniques that can work for you too.
With so many ways to promote your business with or without money, there is no need to suffer from sluggish revenue. And we’ve written this guide to help you with exactly that. We’re going to cover:
The basics of sales promotions, deals, and offers.
How your business (and customers) benefit from sales promotions.
15 different sales promotion ideas with real examples for each.
From classic percent-off discounts, to teacher-only specials, to joint promotions with complementary businesses, there’s something in here for everyone. So read on if you’re ready to learn how to attract and retain more customers to your small business through creative and attractive promotions.
What is a sales promotion?
A sales promotion is any undertaking by an organization designed to increase sales or encourage the use or trial of a product or service. Sales promotions take many different forms, but they all focus on persuading a target audience to become customers of a business.
Sales promotions can be announced over free channels like social media, email, or your website; or they can be the focal point of your paid advertising campaigns such as with LinkedIn ads or Google Ads. An effective sales promotion uses imagery, effective copy, and logic to appeal to the needs, values, and emotions of your target audience, and invites them to purchase your products or services with an incentivizing offer.
Why leverage deals and offers for your business?
At first, it might seem that offering promos and deals is a self-destructive behavior that shortchanges your business. That would be terrible…if it were true. In reality, though, your business benefits from sales promotions just as much as your customers:
Minimize risk: A balanced approach to promotions minimizes risk to your company. In other words, so long as you’re not offering endless, outrageous deals that wouldn’t be sustainable for your business, your promos are likely to create win-win situations.
Make a profit: The sense of urgency and desire created by short-term offers means that your sales can increase significantly. In fact, you could end up making more profit than you would if you were doing business as usual.
Attract new customers: No better way to catch the eye of someone new than with an exciting offer
Retain customers: Deals and discounts keep your customers engaged and happy; and you know what that means. Loyalty!
Speed up your sales cycle: Promotions are great top-of-funnel offers that can get prospects on your nurture path.
And the list goes on. You can get rid of aging product, increase product awareness, promote a new product, activate dormant customers, and improve your brand reputation.
Sales promotion ideas and examples to increase sales
To get you started with this worthwhile strategy, here are 15 sales promotion ideas, accompanied by real examples, and categorized by the business goals they can help you achieve. We’ll cover promotions to increase sales, to encourage repeat business, and to boost brand awareness.
1. Google My Business offer posts
Did you know that you can run promotions on your Google business listing? Your Google My Business account dashboard allows you to create four different types of social posts: Offers, Updates, Events, and Products.
Using the “Add Offer” post type allows you to announce a deal or offering right on your Business Profile. This allows your promotion to reach customers who find your business on Google Maps and Search—which is often when they have the highest intent. In addition to boosting your conversions, a Google My Business promotion can also drive more traffic to your website.
2. Free samples
Although many businesses temporarily suspended this promotion strategy for customers during COVID-19, it can still be referenced as one of the best sales promotion examples out there. By offering free samples to all in the store regardless of whether they purchase something, this strategy (employed by businesses like Costco and Whole Foods) introduces consumers to products they may not have considered before, and oftentimes cordially encourages them to buy.
Do you have a product that you’re trying to sell? Give out samples! While this works best with food (both in-store and at farmer’s markets), it can also be used by spas and salons—with tester lotions, perfumes, or aromatherapy products. The bottom line is that people like things they can try before buying.
3. Buy one, get one free promotions
Buy one, get one free deals (aka BOGO) are among the most popular types of sales promotions. Offering two of an in-demand product at a reduced price and for a short time creates a sense of urgency that can boost sales. It can also clear stock, which is why, within business circles, BOGO promos are often referred to as “self-liquidating”.
The great thing is that these promotions rarely cost anything. In fact, they’re designed to increase revenue.
For example, let’s say you pay $3 for a product that you sell for $10. If you offer a 50% discount, you’d be making $2 from selling just one at the discounted price. However, running a BOGO discount means you can sell one item at full price minus your cost for two items so, in the end, you’d be earning $4. With more people buying that product as a result of your promo, your profits would soar.
The great thing is that these promotions rarely cost anything. In fact, they’re designed to increase revenue.
BOGO deals work with more than just product-based businesses; they also work for service-based businesses. Fitness studios, spas, salons, consultants, and trainers can offer BOGO deals on their classes or trainings to fill their schedules or get new clients during a slow season. Since service-based businesses are more time- than product value-related, the only cost is time. So especially if you have time to spare, this is a perfect promotion to try.
4. Cashback promotions
Many consumers would agree that it doesn’t feel as bad to spend money when you get some in return. It’s almost like paying less from the start and then having extra money to get other desirable products.
Plus, giving back to customers in this way usually results in more loyalty and business from them. This kind of offer is a win-win for both you and your customers.
5. Lifestyle discounts
Lifestyle discounts are those that apply to a particular profession, age group, or demographic.—usually one associated with an ID. They commonly available for:
Teachers
Students
Veterans
Seniors
While you can offer these promotions year-round, there are also months and days of the year dedicated to specific groups of people, so be sure to take advantage of that. For example, back to school discounts are great September promotions, while August is home to National Senior Citizen’s Day. Keep an eye on your calendar for these monthly marketing themes so that you can plan your promos well in advance and maximize their results!
6. Flash sales and discounts
A flash sale creates a sense of urgency among your customer base to buy now. So especially if you have a business that does a lot of online sales, flash sales may be one of the more effective sales promotion strategies for you.
There are at least two ways to go about this type of sales promotion. One, you could do a flash sale once or twice a year. Or, two, you could do one on a set schedule each month so that people are anticipating the event and prepared to make purchases on short notice.
In either case, be sure to utilize social media and email marketing campaigns to announce when the sale will be happening. You can even create a fun branded hashtag to get your audience hyped to buy!
Sales promotions that encourage repeat business
Repeat business is often the best business. Your loyal customers are often the ones to spend the most on your offerings and will gladly spread the word about your products and services.
7. Vouchers and coupons
You can offer vouchers and coupons via email, your website, or print materials such as product packaging, catalogs, and so on. They are a great way to thank your current customers and to encourage them to continue doing business with you.
One way to really get people excited about their next purchase with you is to offer a mystery coupon. Not only is it interactive, but it also makes customers feel as if they’re playing a game and getting more than just a run-of-the-mill discount.
If you do give this a try, be sure to capitalize on every opportunity with a multi-pronged campaign and strategically-crafted landing page. Even after they’ve clicked through to find out their discount, continue to advertise sale items or your most popular merchandise to further entice them to cash in on their coupon.
Too, you can make use of coupons to recover potential customers who’ve abandoned their carts. As of 2020, around 88% of online carts are abandoned. However, offering discounts to customers who may previously have only been window shopping may be the nudge they need to complete a purchase.
88% of online carts are abandoned, but offering promotions to your window shoppers just may be the nudge they need to complete a purchase.
8. Charitable cause promotions
Why not kill two birds with one stone? Make an impact in your community while attracting more customers with a charitable sales promotion. Let your customers know that for a certain period of time, a portion of your proceeds will go to a charity you support. Or you can make this an ongoing initiative as Necker’s Jewelers does in the example below.
9. Free shipping and returns
In addition to coupons, which we discussed earlier, what’s another cure for a ton of abandoned shopping carts? Four words: Free shipping. Free returns. Free shipping eliminates one of the last obstacles that could prevent people from completing their orders. This is key because hesitation can be present even when a customer has done business with you before and likes what you offer.
On the other hand, free shipping eliminates the anticipation of the hassle that is paying for return shipping. By getting rid of both forms of friction, you can encourage more repeat purchases from your product-based business.
10. Loyalty program promotions
Rewards and loyalty programs—even those that don’t necessarily pay off immediately—can be a powerful motivator for customers. Here are a few approaches you might consider.
You could double or triple loyalty points for a limited time, which can be a great incentive to buy. You might even offer a “lump sum” of points for signing up for your loyalty program, which could move customers to buy more than they would have initially.
Punch cards are also a well-known option, which makes customers eligible for a special offer after a certain number of purchases. Some businesses even offer a small discount every time customers use their cards.
Sales promotion examples for boosting brand awareness
The more familiar your audience becomes with your brand, the more they will trust and look forward to your business’s announcements and content. Let’s take a look at some sales promotion ideas to build and strengthen your brand story.
11. Joint promotions
Whether your company owns several brands or you partner with companies in similar or related industries, you can make use of joint sales promotions. All you have to do is bundle products or services from each brand into a package and promote it via the other brand(s). Your partners can do the same for you, which means free promotion for both of you.
This type of arrangement can extend the reach of your brand. It familiarizes new potential customers with what you offer and increases the likelihood that they’ll convert in the future.
Red Robin offered discounts to patrons who showed up for a burger with their Wolverine ticket stub in hand. While they may not have received a discount for the actual movie, the film benefitted from attracting people who were more excited about the burger at the end of the tunnel than the movie itself.
12. Social media contests and giveaways
A contest or giveaway on Facebook, Instagram, or your target audience’s social platform of choice is a great way to get new customers interested in your business and gain more quality followers.
For example, one common method is to require followers to tag a certain number of people in the comments, or post to their stories, to be entered to win.
If you can get your existing audience excited enough about your contest or giveaway, this is basically guaranteed exposure. And not only does it increase your business’s reach on social media, but it specifically increases awareness of your brand among your ideal customer base! This boosts the probability of meaningful engagement and sales in the future.
13. Shopping sprees
One of the most exciting in-store sales promotions you can do is an “enter to win” contest that gives the winner a shopping spree in your store.
Of course, you have to be careful not to leave too much merchandise up for grabs because that could end up costing you dearly. However, allowing for a generous shopping spree can prompt powerful word-of-mouth marketing.
No doubt, the winner will be excited to share their good news and, after the spree is finished, to show off their goods. This user-generated content can put your business on the radar of potential customers and encourage them to check out what you offer.
14. Give branded gifts or bundles
Additional value for less can be very enticing, so you may bundle together your most popular or closely-related services for a reduced price. This is an excellent way to get people talking about your business.
Alternatively, you can offer branded gifts to existing customers and others. The more loyal a supporter of your brand, the more often they’ll use your branded gifts. Who knows how many people will find out about, be reminded of, and check out your brand as a result?
Both bundles and branded gifts can spark a good deal of new interest in your business.
Businesses that give out promotional merchandise increase their chances of getting new customers by 83%.
15. Referral discounts
Bringing new customers into the fold should always be on your radar. One way to keep the new customers rolling in is to offer discounts when current customers refer a friend or promote you on social media.
Alternatively, you could give money that can be put toward a customer’s next purchase. In either case, you’ll need to decide if the referral alone is enough or if the discount is only applied after the new customer makes a purchase. If you choose to offer a discount regardless of whether or not anything is purchased, try to place a threshold on the number of referrals required before the discount takes effect. For example, get 25% off your next visit if you make three referrals.
Google Ads is arguably one of the most misunderstood platforms for paid advertising. Many business owners promote their wares with sponsored posts on social media sites like Facebook, but underutilize Google Ads, despite the unique opportunity it offers to advertise their products and services directly to people actively searching for them.
Google puts a large breadth of advertising tools at your fingertips. It also gives you access to users of the world’s two largest search engines—Google and YouTube, respectively—and a network of millions of websites to advertise on.
Unfortunately, Google Ads has a complicated interface and a steep learning curve. If you don’t know what you’re doing, you can end up targeting too broad of an audience and spending money without turning a profit.
But everyone has to start somewhere, and whether you plan on managing your own Google advertising or outsourcing it to an expert, it’s best to begin by learning the necessary terminology and knowing not only the campaign and ad types available to you, but what you can realistically expect from them. That way, you’ll understand exactly what the platform can do for you.
Table of contents
Why use the Google Ads platform?
Google advertising terms and concepts
How to use this Google advertising playbook
The Google Ads playbook: 13 campaign types you can run
Budgeting: “Always-on” vs. “testing” campaigns
How to hire help
Final thoughts
Why use the Google Ads platform?
Google Ads has a lot in common with many other paid advertising platforms. With it, you can:
Set flexible budgets as low as $5.
Pay per click (in most cases), so you’re only charged when someone visits your site.
Turn spending on or off at will.
Get fast, measurable feedback on campaign performance.
Target a specific audience based on specific behaviors, how they’ve interacted with your site or brand before (from visiting a certain page to abandoning their cart), demographics, interests, and other traits.
Achieve tremendous scale with your campaigns.
But what makes Google Ads uniquely attractive is its ability to reach consumers in three distinct ways, the first of which is Google’s bread and butter and what you can’t get on platforms like Facebook: Search ads.
1. Search ads
Consumers generally use search engines—unlike social media—with a specific intent in mind: to search for answers, get solutions to their problems, or find specific products or services. This makes Google a powerful marketing channel for a variety of businesses.
You can inform how you advertise on Google based on the average volume of monthly searches for a given query, the estimated cost you would pay per click, and other data Google makes readily available. You can run search ads that promote your products and services directly in the search results of a specific query and even narrow your targeting to users in a certain geographical area.
Say you’re selling plant-based protein powder. More than 200,000 people search for “protein powder” on Google every month, but there are far fewer searches for “vegan protein powder.” Google will let you bid (more on this below) to advertise your brand on both of these phrases individually, but the more specific search term likely will convert better because it’s more relevant to your product.
You can create text ads, which display in search results marked with the word “Ad” in a small box, or Google Shopping ads, which surface key purchasing information, such as product photos, prices, and ratings—something that makes them perfect for many ecommerce brands. You can see both text and Shopping ads in action below.
2. Google Display Network
You can also advertise your products or services to potential customers through the Google Display Network.
Display advertising gives you the option to reach people outside of Google’s search engine results, through text, image, and video banner displays that appear as users browse the web, use apps, or watch videos.
While many advertisers turn to Facebook for their display advertising, Google is also a viable option.
The Google Display Network reaches 90% of all internet users around the world and consists of ad space on more than 2 million sites and 650,000 apps. Visit any news site and you’re likely to see Google display ads at the top, in the sidebar, or even throughout the content itself.
3. YouTube ads
The Google Ads platform also lets you advertise on YouTube, which is owned by Google. Technically, YouTube is just one site in the Google Display Network but, measured on its own, it is the third most-visited site on the web, after Google and Facebook. Users watch more than one billion hours of YouTube videos a day. That makes for a lot of opportunities to engage potential customers.
You’re probably familiar with the pre-roll ads that play before YouTube videos, but there are also banner and overlay options.
As you can see, Google offers a variety of ad types. But before you choose between text, image, or video, you need to understand where your ads will be shown and who will see them.
How the Google Ads auction works
Many of the campaign types available through Google Ads operate on an auction system. Advertisers compete for a position or “rank” on the search engine results pages by bidding (usually) on clicks.
The amount you bid and how you set up your keywords will determine your placement in relation to other bidders. However, the highest bidder doesn’t necessarily win the top spot; relevancy is also a determining factor.
Google wants to show ads that are useful and relevant to its users, and you want to advertise to relevant users who are searching for your business or terms related to what you’re selling. So Google assigns an Ad Rank based on various factors, such as the relevance of your ad copy and ad format to the keywords you’re buying, the webpage you’re sending visitors to, and more.
As an advertiser, the more relevant your business is to the terms you’re buying, and the more relevant your ad messaging is to users searching for those terms and the page you’re sending them to, the cheaper it will be for you to rank for that traffic.
Before you dive headfirst into the world of Google Ads—or hire a professional to manage your marketing on the platform—there are some key concepts and campaign types you’ll need to understand.
Google Ads terms and concepts
Paid marketing—Google Ads in particular—comes with its own vocabulary of terms and concepts. Here’s a glossary you can reference if you encounter a term you’re unsure of:
Paid marketing terms to learn
Impressions: The number of times an ad is viewed.
Cost: The amount of money a campaign spends on paid advertising.
Clicks: The number of times your ad was clicked on by a user.
Conversion: The specific goal you are tracking (a sale, a view of a high-value page, an email sign up, etc.).
CPM (cost per thousand impressions): The ad buyer’s cost to have their ad seen 1,000 times.
CPC (cost per click): The ad buyer’s cost per click. CPC can be as low as a few cents or as high as a few hundred dollars, depending on competition, your industry, and audience relevance.
Cost per conversion: The ad buyer’s cost per purchase, order, acquired customer, or another conversion goal you’ve set.
CTR (click-through rate): The percentage of users who clicked on your ad out of the total number of impressions it received. Your click-through rate is the most significant signal of relevancy in Google’s search auctions.
Conversion rate: The number of conversions divided by the number of clicks, expressed as a percentage.
Budget: The total amount of money allocated to an ad campaign.
Revenue: The total value, in dollars, generated by an ad.
Profit: The total value, in dollars, generated by an ad after subtracting expenses, such as advertising costs and cost of goods.
ROAS (return on ad spend): Revenue generated from an ad divided by the advertising cost to show the return on that ad. For example, $5 made for every $1 spent yields a ROAS of 5:1.
AOV(average order value): The average dollar amount a customer spends on a site. AOV is calculated by dividing the total revenue by the number of orders.
CLV (customer lifetime value): The predicted total value of a single customer (sometimes called LTV) for the entirety of their relationship with a company, including future purchases.
Terms and concepts used in Google Ads
Campaign: A campaign contains a single advertising objective, such as traffic or conversions, for one or more ad groups. Budgeting is done at the campaign level and if you expect certain things within a campaign will perform differently (better or worse) that’s a good indication it should be a separate campaign.
Ad group: An ad group contains one or more ads and your targeting. A good ad group set up has a unique set of ad messages that directly match your targeting.
Ad: The creative ( text, image, video, etc.) that users will see.
Keyword: The phrase or word(s) a user enters into the search engine.
Keyword match type: Keyword match type involves controlling how broad or exact the chosen keywords (synonyms, related searches, etc.) must be to trigger an ad.
Negative keywords: If you want to prevent your ad from being triggered by a certain word or phrase, you would add it to your negative keywords list. This helps you exclude similar but irrelevant keywords (e.g. “apple cider” for Apple the brand).
Quality score: The relevancy of an ad to the search term or audience being targeted. Generally, the higher the quality score, the lower the cost per click and the better the ad position.
How to use this Google advertising playbook
We’ll break down everything you need to know to help you understand what goals and realistic expectations you should have from each type of campaign available through Google. This will help you determine the best campaign for your circumstances.
Keep in mind there will always be trade-offs and other dependences to consider. For example, certain campaign types sacrifice segmentation—bundling various audiences together, making it hard to isolate specific high-performing groups.
Other campaign types might be harder to execute successfully, requiring more manual set up and ongoing optimization, especially if certain audiences or keywords are highly competitive. These campaigns will require more technical expertise, time, and money.
For this reason, any ranges or estimates given here are meant to serve as guidelines. Your actual cost per click or expected return will depend on many variables, such as how well your website converts, your average order value, and how much scale there is for a certain type of keyword or audience.
We’ll outline each campaign type according to the following information:
Goal: What does this campaign type accomplish and how? Should it drive sales by focusing on past visitors to your site? Should it sell to existing customers or acquire new ones? Should it raise awareness among a certain audience segment?
Relevance to audience: Your business and products may or may not be relevant to a certain search term or audience. Generally, the more relevant your product or service is to a targeting method, the lower your cost and the higher your likelihood of getting traffic to your site and making sales.
Estimated cost per click: This is a general estimate of how much you will be spending for each prospective shopper and will vary depending on your industry. Remember that you will often be paying for every click, and ongoing optimization is necessary to maximize the value of your spend.
KPIs (key performance indicators): What measurable values should you use to set goals for this campaign and measure its performance? We all want our campaigns to generate sales, but you can expect most visitors to your store won’t convert the first time they visit. That’s why KPIs like traffic and impressions are more important for campaigns focused on raising awareness and creating consideration versus direct sales and ROAS.
ROAS Expectations: What kind of return on ad spend should you realistically expect from a campaign relative to other campaign types? This will be expressed as a range (e.g. 0:1 to 5:1) that is meant only as a guideline to help you prioritize tactics. There are many variables that will affect your actual ROAS.
Scalability: Some campaigns may target users looking specifically for your branded products, or users who have already visited your site. Other campaigns target users based on their general interests or search history for a specific category of products. Each type of campaign will have a different ceiling or “scale” (i.e. the extent to which you can spend more to get more from the campaign).
Recommended for: When does this tactic make sense and for what businesses? We’ll try to make recommendations based on different types of merchants, but use the above criteria to make the best call for your unique business.
Ease of implementation: How easy or difficult a campaign will be to undertake, based on a variety of factors. Some campaign types are relatively easy to set up, while others require more expertise and ongoing management.
View these guidelines in relation to your goals and who you are targeting. For example, if your goal is new customer growth, you may be willing to break even on your campaign, especially if your business is in a position to generate repeat purchases from customers.
Not all businesses will be able to take advantage of all campaign types, and some of the more competitive campaigns often require a lot of human capital and time to manage. They can also be expensive, especially in the beginning.
The Google Ads playbook: 13 campaign types
1. Branded search
Goal: Capturing searchers actively looking for your brand by name.
Relevance to audience: High. (They’re searching for you.)
Estimated cost per click: Low (~$0.25 to $3.00).
ROAS Expectations: High (3:1 to 30:1). These searchers are looking specifically for your brand.
KPIs: Profitability, number of orders.
Scalability: This will depend on how established your brand is. It also will depend on how many people search for you, which can be driven up by other marketing efforts that increase brand awareness.
Recommended for: All businesses, regardless of size and industry, will likely make sales when there is search intent for their specific brand. Prioritize this campaign if resources permit.
Branded keywords contain the exact names of a brand or product. “Apple phone” or “iPhone,” for example, are branded keywords for Apple.
You might not think to bid on your own brand name, especially if your site already appears organically at the top of search results, but doing so lets you promote specific information (using Google’s ad extensions) and set the exact page where you want people to land. It also protects you from competitors who might bid on your name or other branded keywords.
CPCs for branded search generally will be lower than for any other search campaign, since your URL and your ads will be highly relevant to users who search for you. At the same time, be wary of your ad appearing for similar but irrelevant keywords. In the example of Apple advertising iPhones, you would exclude keywords such as “apple picking” or “apple cider,” or even “how to update my Apple iPhone” and narrow your targeting using the appropriate keyword match types and negative keywords.
Since your ceiling for sales from branded search depends on how many people are actually looking for you, branded search campaigns can complement brand awareness campaigns. A pop-up shop or a viral Facebook video, for example, can translate into more searches for your brand name.
Ease of implementation: This type of campaign can be hard to implement if you’re not familiar with search engine marketing. Agency or in-house resources may be required. However, branded search isn’t that labor-intensive to manage, so make this a priority if you can.
2. Non-branded search (generic)
Goal: Generating qualified intent-based traffic, and possibly new customers, by advertising to people who may buy your products but aren’t necessarily familiar with your brand.
Relevance to audience: Low to medium.
Estimated cost per click: Medium to High ~($1 to $20).
ROAS Expectations: Medium (0:1 to 3:1, depending on competition, product/market fit, etc.).
KPIs: New customer acquisition, revenue, traffic, number of orders.
Scalability: Potentially large, depending on search volume from users and the type of terms.
Recommended for: Everyone, but don’t prioritize this method before some of the more profitable campaigns on this list. For brands looking at growing top-line revenue and new customer acquisition, however, generic non-branded search should be a top priority.
Non-branded search campaigns, like the name implies, target keyword phrases that don’t include your brand or products by name. As such, your costs are likely going to be higher, since your relevance to users is lower, especially for more generic keywords (for example, “buy pillow” vs. “organic goose feather pillow in downtown Toronto”).
The goal of this campaign is driving new visitors and new customers to your site as efficiently as possible. But these campaigns can also have a positive ROAS for advertisers and a massive amount of potential scale.
Keep in mind that the true value of a customer is not their initial purchase but their lifetime of purchases from your brand.
Ease of implementation: As with all search campaign types, this one can be difficult. These campaigns require a lot of human resources to manage and test your creative and landing pages, plus a lot of money to drive results. It’s best to hire help to ensure these campaigns are managed correctly.
3. Non-branded search (niche)
Goal: Acquiring new customers from niche audiences that match up with your niche products.
Relevance to audience: Medium to high. (The more niche the audience and the better your product addresses that niche, the more relevant you will be to your audience.)
Estimated cost per click: Medium to High ($1 to $20, depending on the competition and value of customers/orders to other advertisers.)
ROAS Expectations: Medium (0:1 to 5:1).
KPIs: New customer acquisition, revenue, traffic, number of orders.
Scalability: This will depend on how many users search for these terms, which have naturally smaller audiences, especially compared to wider non-branded searches without these niche modifiers.
Recommended for: Brands with a niche product or that are targeting a niche market within a non-branded product category, such as “vegan deodorant” or “used NFL game memorabilia.”
Niche non-branded search campaigns tend to involve less competition than generic non-branded ones. That’s because they’re more specific and, as a result, make you more relevant to the searcher’s intent if your products match what they’re looking for.
If your business and products are a fit for niche marketing, then this campaign type is worth exploring. Niche marketing, even outside of the context of Google Ads, gives brands a much easier time of getting traffic and, potentially, a positive ROI, because it offers a specific audience that’s easier to identify and focus on.
Niche non-branded search often is lumped together with generic non-branded search. But, for the reasons given above, it makes sense to segment this traffic in its own campaign and discuss it separately.
If you sell third-party products, you can also apply this campaign type by bidding on the specific branded keywords associated with them. When buying these keywords, you can even use these brand names in your ad creative as long as you link directly to a landing page that has those products visible.
Ease of implementation: Similar to other search campaigns, this campaign type isn’t easy to undertake and will require appropriate resources to set up and maintain. If you don’t understand keyword match types and how to build and optimize search campaigns, ads, and landing pages, we would recommend hiring an expert who does (more on that later).
4. Competitor search
Goal: Acquiring new customers who might not know your brand or product by getting your brand in front of shoppers searching for your competitors.
Relevance to audience: Low. (Users are searching for a specific competitor, not your brand.)
Estimated cost per click: Medium to High (~$1 to $20).
ROAS Expectations: Medium (0:1 to 3:1, depending on the competition and whether your competitors, or their competitors, are bidding on the same branded keywords).
KPIs: Traffic, new customers, number of orders, ROI.
Scalability: This will depend on how big your competitor’s brand is, how many users search for them, and other campaign efforts that drive awareness for them.
Recommended for: Merchants already running profitable campaigns and interested in new customer acquisition. Also, merchants with a high LTV or who are actively testing different customer acquisition campaigns.
A competitor search campaign essentially is a branded search campaign in reverse. Instead of bidding on your own brand’s name and products, you bid on searches for your competitors’ branded keywords.
Stealing traffic from your largest direct competitors’ keywords sounds like a smart strategy, but it can also be a relatively expensive one because, in this case, you, a competing brand, aren’t the most relevant thing searchers want to see.
Typically, this strategy is employed by brands that can justify the higher costs of acquiring a new customer who might have a relatively higher average order value or lifetime value. Otherwise, you may experience little success with this strategy.
If a brand isn’t buying its own traffic or doesn’t have a lot of brand loyalty among its customers, and if your product is an equal or better alternative, this could actually be a very profitable campaign for you.
(Part of the reason we highly recommend buying your own branded terms is to prevent this type of disruption from a competitor.)
Note: You shouldn’t use dynamic keyword insertion in ads when buying your competitor’s branded keywords, nor can you use their name in your ads if you don’t sell their product on the page you drive traffic to.
Ease of implementation: As with all search campaigns, this one is not easy to do and could be very expensive. You would want resources dedicated to managing this.
5. Google Shopping (branded)
Goal: Capturing searchers who are specifically shopping for your products/product categories using your branded keywords.
Relevance to audience: High. (They’re searching for you.)
Estimated cost per click: Low (~$0.25 to $3.00).
ROAS Expectations: High (3:1 to 30:1).
KPIs: ROAS, number of orders.
Scalability: This depends on how many users search for your brand and branded products.
Recommended for: Companies selling physical products that have already invested in brand awareness and those who feel comfortable tweaking within Google Ads to set up this type of campaign.
Google Shopping campaigns generally offer a great user experience for shoppers: a user searches specifically for a product and is shown images, prices, and reviews of items Google thinks are relevant. If shoppers click the ad, they go directly to that product page.
In terms of new customer acquisition as an ecommerce business, this is at the top of your list of campaigns to try.
Users who specifically search for your brand are more likely to convert, so if you’re able to set up branded Shopping as a separate campaign, you can maximize your traffic from this source and be able to budget more effectively. Otherwise, Shopping campaigns will include both branded and non-branded traffic by default.
Without a segmented campaign strategy, there will always be more non-branded than branded traffic, and the majority of your budget will likely be spent on non-branded terms that are less likely to convert. That’s why, if you can (and have the traffic to take advantage of it), it’s worth separating branded traffic into its own Shopping campaign.
Ease of implementation: Shopping campaigns generally are easier to set up than search. To create a working product feed Google can pull from, you either can install the Google Shopping app set things up manually in the Google merchant center. You’ll need to create individual campaigns for branded and non-branded traffic, apply negative keywords, and prioritize keywords to exclude your ads from displaying for certain queries to isolate branded search traffic.
6. Google Shopping (non-branded)
Goal: Capturing searchers looking specifically for the types of products you sell but not necessarily your branded products by name.
Relevance to audience: Low to medium (They’re searching for your product categories, not necessarily your products.)
Estimated cost per click: Medium (~$0.25 to $20.00).
ROAS Expectations: Medium (0:1 to 5:1).
KPIs: New customer acquisition, revenue, traffic.
Scalability: Generally high, but it will depend on how many shoppers search for your products/product categories.
Recommended for: Most companies that sell physical products. However, this type of campaign should not be prioritized over more profitable campaign types unless you have specific new customer, growth, or top-line revenue goals.
You can create a separate campaign for non-branded Google Shopping, similar to the branded Shopping campaign discussed above.
Non-branded shopping campaigns work similarly to non-branded search campaigns. If you have the budget, they are something that almost always makes sense for ecommerce businesses to try.
If you don’t have any branded products, a normal shopping campaign essentially will be a 100% non-branded campaign.
Ease of implementation: Separating out branded and non-branded traffic requires a bit of set up, but once done you can have separate non-branded Shopping campaigns and dedicate a specific budget for each.
7. Retargeting (text, banner, video)
Goal: Advertising specifically to potential buyers who have previously visited your site, browsed a specific category page, added items to their cart, or already made a purchase.
Relevance to audience: High (They’ve at least visited your site already.)
Estimated cost per click: Low (~$0.25 to $3.00).
ROAS Expectations: High (3:1 to 30:1).
KPIs: ROAS, orders.
Scalability: This will depend on site traffic or the size of the audience that has engaged in the behavior you’re targeting.
Recommended for: All businesses, especially those that aren’t doing any retargeting, despite driving traffic to their site.
While getting traffic is the first step in converting visitors to customers, most visitors are unlikely to make a purchase or provide any information right away. If a 2% customer conversion rate is good by most industry standards, that means 98% of traffic won’t turn into a purchase—at least on a first visit.
Retargeting is a strategy that lets you continue to reach these visitors off-site, often at a lower cost, to bring them back to your site through different, more specific messaging.
Retargeting is a powerful feature that helps you turn first-time visitors into return visitors and, ultimately, into first-time buyers. It can also be used to generate repeat purchases by advertising to existing customers. For example. you can apply retargeting to YouTube with video ads for users who have visited your site. This makes a stronger second impression and can be very powerful if bundled into an existing strategy.
Unlike with the other display campaign types covered above, where your ads appear matters less since you’re targeting specific users that will recognize your brand no matter what site it appears on.
However, maximizing your retargeting efforts will involve a lot of additional segmenting based on users who have more recently visited your site, explored your product pages, or abandoned their carts. Simply targeting all users who have been to your site in the past 30 days might result in you reaching buyers without any intention of purchasing.
Similar to how there can be a wide range of search terms to consider for non-branded search, how you target a user who saw a specific product and added it to their cart in the past 24 hours will be different than a user that was on your homepage 40 days ago. Your expectations should vary accordingly.
Ease of implementation: This type of campaign isn’t too difficult to set up if you know how to create negative audiences and load ads and targeting into Google Ads. However, you will want to dedicate resources to maintain it, since the goal with retargeting is to create a profitable mechanism you can use to convert past visitors into customers. Also, If you want to use YouTube retargeting for video ads, you’ll need your own channel with video assets uploaded to YouTube.
8. Display ads (topics and interests)
Goal: Increasing awareness around your product or service by advertising on sites in the Google Display Network that relate to a specific topic or interest category.
Relevance to audience: This will depend on the interests and the topic themes you are targeting and how relevant they are to your product/messaging.
Estimated cost per click: Low to Medium (~$0.25 to $3.00).
ROAS Expectations: Low (0:1 to 2:1).
KPIs: Impressions, clicks, general brand awareness, micro-conversions (email sign-ups, multiple page views, time on site, visiting your physical location if you have one), number of orders.
Scalability: Generally high, but it depends on the categories you’re targeting and the number of sites or users that match that criteria in the Google Display Network.
Recommended for: Brands that specifically want to get their product/service in front of a certain user segment to drive awareness, or have found a perfect topic/interest fit for their target demographic and market.
Display advertising gives you the option to reach people outside of search engine results, across more than two million publisher sites, through text, image, and video banner displays that appear as users browse the web, use apps, or watch videos.
While you have a few targeting options at your disposal here, the broadest will be based on topics and interests, which can range anywhere from autos and vehicles to travel to home and garden.
With topic-based targeting, your ad will be served on any of the sites belonging to that category in the Display Network. With interest-based targeting, your ads will be shown to users who have recently started researching those topics using sites in the Display Network.
If you’re considering these types of display campaigns on Facebook, it might make sense to put some of your ad testing budget into Google’s equivalent.
Ease of implementation: Setting up a display campaign is relatively straightforward, but you’ll need to exclude certain keywords and placements (using negative keywords and negative placements) to really optimize its effectiveness.
9. Display ads (contextual)
Goal: Driving increased awareness around your product or service, and potentially driving sales, by displaying your ads on webpages in the Display Network that contain a specific theme based on a grouping of keywords.
Relevance to audience: This will depend on the keyword themes you are targeting and how relevant the site topics/users are to your products and messaging.
Estimated cost per click: Low (~$0.25 to $3.00).
ROAS Expectations: Low (0:1 to 2:1).
KPIs: Impressions, clicks, brand awareness, micro-conversions (email sign-ups, multiple page views, time on site, visiting your physical location if you have one), number of orders.
Scalability: Generally pretty high, but it depends on the content keywords you’re targeting and the amount of content available for those keywords in the Google Display Network.
Recommended for: Most brands could make the case that this should be one of the first upper-funnel campaigns to test, since you can get your product in front of users as they’re researching specific products or topics relevant to your brand. However, this type of campaign is not for brands that haven’t found success with other high-intent campaigns first, have a very low LTV, or have low interest in driving awareness or new customers.
Contextual display lets you get even more granular by serving your ads on webpages with content containing the specific keywords you’re targeting. You could use this campaign type to target content that contains certain branded keywords or keywords that pertain to your business.
The majority of a user’s time online is spent consuming and engaging with content, not searching on Google. Because of that, getting in front of users as they engage with content relevant to your product or service is always a potentially viable approach to test and measure lift. While not necessarily a priority over higher intent search campaigns, the ability to showcase your ads (image, text, video, etc.) to potential users without having to pay unless they click is a great opportunity.
Contextual campaigns are a great way to start on the Display Network because they let Google show you niche sites that might be available for you to directly target your audience on.
Note: You can get contextual campaigns and the Display Network as a part of your other search campaigns. However, we would always advise turning the Display Network off for search campaigns and turning search off for display campaigns. They work very differently, and so should be separated and budgeted as such to give you more control over how much money is spent on what effort.
Ease of implementation: Generally, if you understand how to group a few contextually relevant keywords and set up an ad through Google, you could start running this campaign. It’s not as hard as search ads, though there’s also no app or direct integration to automate set up.
9. Display ads (managed placement)
Goal: Using ad space on a specific website to drive awareness about your product/service/business for that site’s specific audience.
Relevance to audience: This will depend on the placement being chosen, how broad or specific the site’s topics/visitors are, and how well your product and messaging speaks to them.
Estimated cost per click: Medium (~$1.00 to $10.00).
ROAS Expectations: Low (0:1 to 2:1).
KPIs: Impressions, traffic (increased brand awareness), orders, and micro-conversions (email sign-ups, multiple page views, time on site, visiting your physical location if you have one).
Scalability: Generally lower but will depend on the site and its traffic (not all sites are targetable).
Recommended for: Brands that want to get their product/service on a specific site to drive awareness after identifying the perfect site for their demographic and market.
Managed placements for Display Ads offer even more granular targeting and control than contextual, letting you select the specific websites, or even specific pages, you’d like to run your ad on in the Google Display Network. Outside of Google, you also can directly secure this type of advertising with websites, but for higher CPM rates.
Typically, you would execute this type of campaign after identifying the specific website placements that were effective in your contextual or topic/interest display campaigns.
Ease of implementation: Generally, this is an easier campaign to set up if you have some experience and can navigate around the Google Ads platform.
10. Google Smart Shopping
Goal: Generating profitable orders through Google Shopping, remarketing, and display placements through machine learning.
Relevance to audience: Varies, since it rolls multiple campaign types into one.
Estimated cost per click: Low to medium (~$0.25 to $5.00).
ROAS Expectations: Medium to High (0:1 to 12:1).
KPIs: ROAS, orders, new customer acquisition.
Scalability: Generally high, since non-branded traffic and display placements will be in your mix of traffic.
Recommended for: Shopify merchants not currently using any retargeting and/or Google Shopping campaigns who want minimal involvement in managing them.
Google Smart Shopping campaigns use machine learning to optimize a mix of retargeting, display, and Shopping ads on your behalf.
This campaign type chooses which products to advertise, how much to bid, who to target, and which creative to show. Shopify’s integration with Google Shopping lets you pull your products and product feeds automatically into these campaigns—you can even launch directly from Shopify using Marketing in Shopify.
Your performance here will depend on how many users search for your brand, products, product categories, or branded keywords. The amount of retargeting you can do and the branded traffic you can drive through Shopping ads also depends on the search volume for your branded keywords and the size of your retargeting audience (i.e. how many people have visited your site already).
Ease of implementation: Smart Shopping represents a very easy way to get involved with Google advertising, whether with Shopping or retargeting ads. If you see success, there may be a greater opportunity to transition to a more segmented manual campaign strategy in the future.
11. CRM (search, YouTube, Gmail)
Goal: Generating repeat business or converting your subscribers into profitable orders by targeting customers who have already purchased from you or opted into your email list.
Relevance to audience: Extremely high. (They’ve already given you their business or their information.)
Estimated cost per click: Low ($0.25 to $5, depending on how aggressive you want to be with targeting.)
ROAS Expectations: Extremely high (5:1 to 60:1).
KPIs: ROAS, profitable orders, traffic.
Scalability: Low, depending on the size of your customer base/email list and customer match rate (not every email you upload will be available to target in Google’s system).
Recommended for: Any brand with more than 1,000 users in its email list and/or customer base.
Customer relationship management (CRM) campaigns are all about remarketing to your list of existing customers or subscribers.
This audience is highly qualified, so you can expect a great ROI if you execute your campaign properly. The one caveat is that you need to have an established customer base (i.e. thousands of emails), so this approach will not work for newer merchants.
These are hyper-targeted campaigns that leverage the information you have about your customers in your CRM. You can extend specific messaging to different segments of customers, targeting placements in Gmail, YouTube, or search.
About Customer Match Rate: Not every email you upload will match with Google’s database. For example, if you upload a list with 4,000 emails, Google may only be able to match 2,000 of them. Gmail addresses are more likely to have a match, but you can expect a sizable portion of your list won’t be targetable.
Ease of implementation: Not only do you need an established customer base to execute this campaign, you would also need the knowledge and experience to segment your list to speak to different customers differently If you have those elements, navigating Google Ads to upload your seed list and set up your ad types is pretty manageable and well-documented online.
12. Similar audiences
Goal: Generating new customers and increasing awareness by advertising to users who have similar interests or characteristics to your existing customer base.
Relevance to audience: This will depend on how similar your customers on your original list are and also how relevant your product/service is to the audience you’re trying to reach.
Estimated cost per click: Low (~$0.25 to $3.00).
ROAS Expectations: Low (0:1 to 2:1).
KPIs: Clicks, impressions, traffic, orders, ROAS.
Scalability: Generally large, depending on how many more users have similar interests. But since it will target all potential users on display, this campaign should have a high ceiling.
Recommended for: Merchants who already have their most profitable campaigns set up and optimized and are looking to test new customer acquisition campaigns. A seed list of emails will need to be uploaded to Google to base your “similar audience” on.
Similar audience campaigns (like Facebook’s Lookalike Audiences) are based on the same remarketing lists we discussed with CRM. However, instead of advertising directly to your existing customers, this campaign will target similar users based on the data Google has about them.
Google Ads is able to take similar interests shared from your seed audience and match your ads to target other users on the Google Display Network who also share those interests..
Ease of implementation: We recommend trying intent-based campaigns first, but if you’re trying similar audiences on Facebook, this might also serve as a viable option to test and review performance.
13. Dynamic search ads
Goal: Generating orders from search keywords automatically generated by Google.
Relevance to audience: Low to high, depending on the keywords Google’s spider makes for your campaigns.
Estimated cost per click: Low to medium (~$0.25 to $5).
ROAS Expectations: Medium (0:1 to 12:1).
KPIs: Orders, ROAS, traffic.
Scalability: Generally high, since dynamic search ads will capture non-branded as well as branded traffic, but will depend on the type of keywords that are on your website for Google to crawl.
Recommended for: Anyone who does not have the expertise to run a search campaign and wants to get something off the ground to see how it works, without making a larger investment.
Dynamic search campaigns essentially create search campaigns for all the different types of keywords they see on your site: branded keywords, non-branded category keywords, product-specific keywords, keywords from your descriptions, and maybe even event keywords from your About page or blog.
There’s no out of the box segmentation in this campaign so, like other campaigns that bundle together your traffic, we don’t recommend this as something to keep forever and scale but rather as a starting point to eventually segment manually as you gather performance data.
Ease of implementation: This is a great quick and easy way to get a search campaign online. However, while it’s easy to implement, there’s a large possibility dynamic search campaigns will contain irrelevant keywords that are on your site but that you would never manually buy to gain traffic.
Budgeting: always-on vs. testing campaigns
With any form of paid marketing, budgeting is an essential consideration that raises many questions. How should you set your budget? How long should you test a campaign/ad? How can you even tell if a campaign is achieving its intended purpose?
To answer these questions, you need to understand the two main categories of campaigns you’ll be running.
Always-on campaigns focus on profitability and high potential sales from shoppers who show intent to buy your brand/product/service. These are campaigns you’ll want to run continuously to capture your lowest hanging fruit. They include:
Branded search
Branded shopping
Retargeting (especially visitors who abandoned their carts)
CRM
Niche campaigns that generate more sales, revenue, and higher profits than they cost
These campaigns generally are where you allocate as much budget as you can, starting with a daily spend you’re comfortable with and slowly increasing that amount if performance meets or exceeds your expectations (while maintaining your profitability).
For example, if you have only $10 a day to spend on marketing (or a fixed budget that you could spend 100% of), an always-on campaign might be the best use of that money—unless you have specific customer acquisition or awareness goals on which that money would be better spent.
Beyond converting your warmest audiences, you can also spend money to drive new customers to your site or drive awareness about your products/services to a specific audience.
That’s what testing/flexible campaigns focus on—driving new customer acquisition, awareness, and engagement with your site and products. They include:
Non-branded search (niche)
Non-branded search (competitor)
Non-branded search (generic)
Similar audience targeting
Contextual campaigns
Interest targeting
When setting a budget, always consider how a certain campaign’s goal aligns with your overall company goals, how well a campaign is doing in terms of meeting or exceeding expectations, and how much money you can actually afford to spend to achieve the goal.
If you’re managing your own Google ads, be mindful of your level of expertise with all of the above. You can get set up quickly with Google Smart Shopping or dynamic search campaigns to get you started, and then reassess what is best for your brand based on all the possible options and best practices explained above.
This always-on vs testing approach to budgeting can also be applied to other forms of paid marketing, from Facebook to influencer marketing campaigns, to decide how much budget to allocate and where.
How to hire help to manage your Google Ads
If you feel overwhelmed, you’re not alone. Many entrepreneurs who can’t afford the time or money it would take to successfully learn and manage their own Google advertising, outsource it to agencies or experts who specialize in paid advertising.
Here are some things to keep in mind when outsourcing your Google Ads:
No long-term contracts: If it’s not going well, you should be able to back out when you want.
Ownership of all accounts, campaigns, and work: Everything should be fully transparent, and you should be the one to own the account, even if you aren’t managing it.
Know your account manager: You ideally want to know and trust the person actually managing your account every day, rather than a salesperson or the CEO of an agency.
Align on goals/expectations: You want a sense of what campaigns your agency wants to run, how it will budget, expected ROAS, and how long it’ll take to get it up and running.
Understand the fee structure: Generally, you’ll either pay a flat fee or fees based on a percentage of your ad spend, with a minimum spend requirement. Be aware of how fees change as the spend changes and know that sometimes there can be additional setup charges. It’s a competitive space, so it doesn’t hurt to shop your business around to different providers.
Consider specialized vendors: While it’s not impossible that the talented development shop that designed your website can also do your Google ads well, it often pays to work with more specific experts for the types of services or campaigns you’re going to run. There are pros and cons to working with a vendor that consolidates many outsourced services, so consider how much time you save from managing one vendor vs. the expertise and ROI you’re getting in each individual service.
Final thoughts
We won’t sugarcoat it—succeeding with Google Ads isn’t easy. There’s a lot of nuance to each ad campaign type, with even more campaign types and variations that weren’t explicitly covered above, not to mention attribution, which is a key topic for another article.
But the Google Ads platform has benefits for any ecommerce business willing to figure out how to advertise to its massive user base based on search intent and a variety of other targeting options and placements.
Hopefully, you now have a better understanding of what’s possible on the Google Ads platform, what to expect from the different campaign types available, and how they can work together with the rest of your marketing engine.
Whether you invest the time and money into learning how to run your own campaigns, or lean on an agency’s or expert’s services, getting to know the platform and your options is a great first step in the right direction.
Autumn 