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Google Paid inclusion bidding strategies explored - to group or not to group

In this short series we will be using some of our existing data to model various bid strategies to try and provide a definitive path for bidding success. We will be looking to publish a couple of models each week as well as give any insight from the test activity we are running in the US. All of the data will be non-specific to the merchant.

Scenario 1: Top 50 products grouped as "top sellers" with a fixed bid of 20p

So as we have discussed before we have a great starting point for many of our merchants, having tracked their performance in Google, some for the last 6 years, we know exactly how many clicks, the CTRs, conversion rate, numbers of orders (and if they are new), as well as the revenue, the search term and much more.

We can use this data to model the exact CPC, which leads to the best Cost of Sale as a starting point.

The top sellers over a given period represent some £300k of revenue. So if we decided to group or label these products as "Top Performers" and bid these at 20p then the spend over that period would be £25k, working out at a cost of sale of 8.5%.

In terms of these top sellers, they are represented by over 30 different brands, not a single product from the same subcategory, price ranges from less than £50 to over £700, so how else could they be grouped. You could have a hierarchy of groupings, a Venn diagram of bidding, but honestly, truly is it intelligent to treat them all the same way?!

Scenario 2: Treat every product as an individual - 50 PLAs - one for each of your top sellers

Based on our historic performance data we would set bids for each at these at unique levels and for those of who think these would be low, you'd be interested to know that the product bids would range from 3p to £3.50!

More importantly the starting performance would show a marked efficiency. Spend would be almost 50% lower at £14k with a cost of sale of 5%, giving plenty of room for our algorithms to start bidding up product PLAs which are performing under target.

With many marketing teams trying to assess the amount of spend that this new channel will require, its key to not be paying per the odds whilst protecting your patch on Google shopping.

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