Google Shopping: Interview with Rick Backus of CPC Strategy
Portent Staff Aug 20 2012
Rick is the CEO and Co-Founder of CPC Strategy, a comparison shopping engine management company started in 2007. They take client feeds across multiple platforms (Amazon, Nextag, PriceGrabber, etc;) and optimize them for ROI through strategy, attention to detail and expertise in CSEs (comparison shopping engines.)
Rick was kind enough to let me ask a LOT of questions that required anywhere from a sentence to a small novella to answer. I’ve tried to capture that interview here for all those paid search marketers out there who are either about to get themselves dropped into the middle of a PLA world and for those that might know some already but could really use some direction on how to get to PLAs perform. And probably most importantly, what you’re going to need to know to make that happen.
(Now this isn’t word for word. Otherwise we’d be here all day. It was an hour long interview, there are a couple of answers I put in verbatim because they were THAT important.)
Part I: CSEs and Tips in General
- In your personal opinion, is this move for Google Shopping a good thing? Do you really think we’re going to get “better” results now as searchers?A: “Better” is relative…it will get some of the affiliates and less relevant advertisers out of the Google Shopping results as we are moving to the “pay to play” model. Larger advertisers with larger budgets will benefit as bidding is going to be playing a large role in the future and will likely be dominating on the google.com results pages.
- What is it that makes Amazon, Shopzilla and Nextag such good CSEs?A: Volume, ROI and the amount of qualified traffic that they are bringing to sites. The challenge for CSEs is generating quality traffic at a scalable rate (profitable for them and for the retailers), which these three (and Pricegrabber as well) do.
- What are the top three things you optimize on a feed and why?
(This was one of my favorite answers)A: “The term data feed optimization got really popular a few years ago. And it’s something that kind of resonates with retailers who don’t work with feeds a lot. So they think that data feed optimization is some sort of magical formula where you take their feed and you’re doing all this crazy stuff to send out their feed and that’s going to magically get you better results. In reality the most difficult part of feed optimization is the categorization. And so, depending on how many categories the retailer has, in some instances they have 500, 600, 700 categories and the shopping engines don’t do the best job of categorizing the feeds unless you’re dictating to them what the proper category is. And so, you can usually get the product live if you just send your own internal categories. Their systems have to be automated and so they’re essentially trying to match up categories based on keywords and that is really really difficult to automate so in most instances they’re going to get 90% of the way there, in terms of putting the products in the right categories. But they’re still needs to be some sort of manual process on the side of the retailer or the side of the agency to look at all of the individual categories and find the corresponding category for each CSE.”
Tweaking product titles, descriptions, adding keywords- it doesn’t always have benefits. The feed needs to match the product pages. So- don’t go adding a bunch of general terms to specific products. This used to work decently on those free engines, like Google Shopping, but now you are paying for the traffic, so make it relevant! Volume doesn’t equal ROI.
All these different CSEs have different category structures. You can’t treat them all exactly the same. Categorize it smart, pay attention.
- What shopping cart obstacles to you come into most often?A: Magento & Volusion. Magento is challenge in getting an export. CPCStrategy had to develop a plugin just for Magento, there are API limits or in some cases retailers are paying for a one time feed export. Volusion has obstacles that often require manual work, for example, like having to pull two versions of the product lists where one has no product URL and another has no image URL and the feed have to be combined in order to make one that can be submitted.
- Which shopping carts are the easiest to do CSEs with?A: Most are easier than Magento/Volusion. For example, Yahoo Stores have a specific file/URL that they can plugin and pull a feed from.
- How does CPC Strategy increase ROI on data feeds?A: Each account manager has 10-15 accounts that they manually review, right down to an individual SKU. Poorer performing SKUs are pulled from the feed submittal and are determined by several thresholds set on a per client basis. For example, a particular SKU on a low cost/low margin item might be “taking up” a lot of the clicks/budget from a certain category but with no or low resulting sales. Removing this SKU from the feed makes it so other products display instead. You don’t want to be paying the CPC for a low value item as you are a high. Additionally, you can bid more for SKUs with higher value over low. It’s also recommended that you don’t throw every product you sell into your feed and instead set a “floor” of which products must meet in order to compete.
For example, a profit margin of X or a price of X. (Sound familiar? Like keyword list management, perhaps?) For the long term trends of month over month, they looks at category level bidding as well as brand and sub-categories, placing them in different “price buckets” to get a bigger picture look.
Another takeaway: Use average order value to determine which products long term- on whether or not you can scale out that traffic at a profitable rate or whether or not you should take away a product from the feed.
Note: there is such a thing as a “runaway product.” Products that are really popular, show a lot, fast and start showing up for general searches, generating lots of un-fun unqualified traffic.
Just like a rogue keyword.
- How do you see what’s working and what’s not? Is there 3rd party tracking? GA? The feed itself?A: In order to really “drill in” to Google Product Listing Ads, they use GA. (And you should really check out the resources section at the end of this post for their ebook on this.) This often includes appended parameters on the ends of destination URLs to able to filter and track. There are some 3rd party trackers out there, but not the reliability and cost effectiveness of GA. Amazon, for example, is working on a revenue/ROI tracker, but the takeaway here: use GA.
Takeaway: append URLs at the product level. Amazon, NexTag, whatever so that the analytics system of your choice picks up activity on a per product basis.
Part 2: AdWords and Google Shopping
- Do you use the AdWords attributes in optimizing feeds?A: Yes! AdWords Labels are awesome.
The entire management of Google Shopping is really based around this column. It’s unique to other CSEs, in that you can send them an extra column that allows you to segment and organize your products in any way you want to.
The trick is figuring out the proper strategy for each client. For example, segmenting by highest margin, best sellers, average order value.
- My clients don’t give me feed access or are unable/unwilling to edit their feed for these attributes. As a result, I get stuck with “brand” and “product type” for filters. How bad is this?(Another answer you must read word for word.)
“You have to control the feed. That’s the hard part. So that’s where AdWords agencies are kind of getting screwed to a certain extent. If you don’t control the feed it’s going to really limit your ability to manage the campaign. And so you can still use the brand and product type columns but if you control the feed you can you can use that AdWords labels to segment however you want. And so if you’re already managing their AdWords then you know about a lot of ways that you could segment the feed, if you’re managing their SEO you know a lot about ways that you could segment the feed. And to not have control over the feed, from an agency perspective it creates a lot of challenges.”
- Do you filter between PLAs and PEs?A: We currently do, but come October, it won’t be necessary. It doesn’t make a lot of sense right now either to try if it’s an issue – once October hits, everything will be under the Google Shopping umbrella and there will no longer be a difference of segmenting paid traffic from unpaid traffic.
- Best practice when structuring for PLAs? Mimic site structure or categorization of your website?A: Categories don’t matter. If the categories in the feed are done properly than you shouldn’t need to use the AdWords label and brand to double up on that. One thing that you should be taking into consideration is the average order value. For example, lower bids on products that have a lower average price point and raising bids on products that have a higher average price point. Use AdWords labels to do this.
- How granular do you get on Google product categories? As far down as you can- or do you stay more top level to increase potential volume?A: You want to go down as far as you can go within Google’s guidelines. Use their category suggestions, to help improve your relevancy. The closer you can match your categories to Google’s, the more likely you are to be seen as “relevant” and data quality is becoming even more important as a factor involved in calculating your placement.
Follow up question: So for the product type category- what do you do with that?
A: Don’t duplicate Google’s category, mimic it. Get close to Google’s taxonomy suggestions, it’s OK to get a bit closer to your own internal site categories/sub categories than theirs.
Another follow up question: So why that column even exist? In my experience, clients are befuddled by it and often mix them up as to which is which and rarely understand that one is dictated by Google through their taxonomy and one is not, it just has to follow the > carrot > structure.
Speculation Answer: Other CSEs don’t require that. Perhaps originally Google wanted to have as much information from the site as possible. (We agreed that this could/should be retired in the future, in order to avoid duplication and “lower barriers to entry” from a technical standpoint.)
- Does AdWords currently provide enough performance information and flexibility in the UI to make the optimization efforts really needed?A: No. You need to use GA and combine the data between the two. Not always perfect, so revenue tracking in AdWords would be nice. You could then see down to the product level as often times the GA revenue doesn’t always match up with AdWords in order to get product level revenue. (The average retailer isn’t going to be able to pull in the level and amount of data needed from both sources.)
This is why AdWords labels is so important to segment traffic. The product type and brand attributes don’t give you enough flexibility for bids and it isn’t beneficial to do that. You don’t need a ton of ad groups within a PLA campaign if you’re using that label.
“One thing that I will say that’s really important that I don’t think most people realize right now is that the default bids at the ad group level will not override the higher bid on all products.”
For example you have a .50max CPC on all products and you have ad groups for brands and those brands have .20CPC and .30CPC. Google is going to default to the 0.50CPC for all products.
You want to start with a low bid on all products and up the bids through auto targets. It’s not intuitive.
- When Google Shopping is deciding/auctioning off which PLAs to show, what are they using to determine product relevancy other than bid, title, description? Do they even look at product type?A: They say that they are using the entire feed, there’s a really complicated system that assigns a score to each retailer’s data feed and there is supposedly a threshold that your data feed needs to meet in quality.
For major hypothetical example: Google says “we’re not going to show any PLAs for a retailer with a data feed quality score below 75.” And your retailer has a 72. Which would mean then they are not eligible for PLAs as the quality of the feeds isn’t high enough to show to their users independent of bids.
So supposedly, the higher they are rating your feed, the lower you have to bid to compete for that real estate. (Sound familiar, anyone?)
There’s a feed rating (data quality score), the advertiser level rating and the bid and all three are playing a role. The data quality score takes into account your product pages as well. Google is matching up the content from your feed to your product pages and assigning it some sort of score with a goal of showing the most relevant advertisers for user experience.
And no, you can’t see what that score is.
Google just started publicly saying that your data feed quality can have an impact on your relevancy. Don’t be surprised if long term there was some sort of metric that was released either in AdWords or Merchant Center that shows you what your data quality score is. Right now it’s just something they use internally and is not public. (We have seen where our clients have improved the amount of content on their landing pages and replicated those improvements in their data feed and their traffic did go up.)
Part 3: How CPC Strategy Works and Resources
- At what point do you want to turn it over to a company like CPC strategy? Volume of products, spend?A: We charge about $1-3k per month in fees, flat fee. Advertisers need to be spending at least $5k in comparison shopping engines. (Most retailers also have over 1,000 products. However, retailers with very popular/high price point products/categories will have less in volume. Think like iPods.)
We are not an AdWords agency, but this is going to become a bigger branch of AdWords revenue and in some cases we’re working closely with agencies and managing PLAs for clients that already have a PPC vendor. We’re in a good position to manage PLAs for clients but the PPC vendor knows way more about how to manage AdWords campaigns.
We take the feed from the clients (mostly via automated FTP) once every 24hours. Most of clients are changing their pricing and inventory every day, clients that do monthly changes- we don’t need a new feed every day. However, we do still submit every day for that “freshness factor” that CSEs take into account, you really should submit your feed everyday even if you’re not making changing it. We also use the CSEs tracking pixels in conjunction with GA for Shopzilla, Nextag, Shopping.com and PriceGrabber to track ROI.
- If you could ask Google to make one feature or tool to help make PLAs more successful for advertisers this October, what would it be?A: Separate bids for Google Shopping and for the PLAs. Essentially right now, your one bid is going to determine where you show up on shopping.google.com and whether or not you can show up on google.com searches. And those are really two different goals. Google Shopping there are retailers listed on that page and Google.com only has 3-6 spots. What we’re seeing right now for PLAs is that the traffic on the google.com results page has a much lower conversion rate than the clicks from shopping.google.com
Assuming that the traffic quality is different- one is someone that is searching on Google and one is someone who deliberately went to Google Shopping, looked at different retailers, compared prices, read reviews and then clicked through- the quality of the traffic is going to be different. As an advertiser, I don’t want my one bid to determine where I show up on both of those pages. I want to have the option of bidding separately.
(Sound familiar? Search vs. Search Partners vs. Display?)
- If you could impart one pearl of wisdom to PPC marketers what would it be?A: Get control of the feed. If you can’t control the feed, then it’s going to make managing PLAs a lot more difficult. To manage PLAs successfully you really need to be able to have use of that AdWords Label column.
Want more? Your head spinning a little? No problem. Stay on top and get in charge of your Google Shopping with some killer FREE resources:
CPC Strategy’s FREE ebook: Google Shopping Guide 2.0: Bidding, Advanced Segment Tracking and CPA Campaigns
CPC Strategy also hosted a free webinar with Jon Venverloh, Google Shopping’s Senior Product Manager on August 9th. Check out the audio recording.
Portent’s blog: What a Paid Search Marketer Needs to Know About Google Shopping