In our previous post we compared the relative efficiency of two fundamentally different Google Shopping bid strategies. We looked firstly at a tiered margin structure and how we could potentially upweight bids for higher margin products but actually found, that even by doing so, costs could be inflated by as much as 43% when compared with optimisation at a granular product level.

You could argue that to combat the relative inefficiency of the tiered structure, you could simply just add more tiers in order to improve the performance of the account, which will work to a degree. But what happens if you have a product in one of the tiers that simply isn't working and is spending a shed load of your cash? What do you do with it?

Well, the fundamental issues with using a tiered model and indeed any level of grouping within Google Shopping are that:

- You can't adjust its bid, because you'll be altering the bids even for products that are working efficiently, thus impacting revenues.

- You could remove it completely by not including it in any of your defined Adwords groups, but is this really the most effective way to deal with it? (And also in doing so, you will lose your 10% CPC discount that Google are offering to early adopters by having all SKU's live.)

- You could create a 'catch-all' grouping which bids everything that is not included in the margin tiered groups right down to 1p or 2p, but what if the products in question would actually drive a larger profitable return when bid at 6p or 8p?

- Similarly, how do you effectively scale the account using a tiered model without altering the bids for every product in that tier?

The simple answer is this:

The only way to optimise and in fact build out your Google Shopping activity efficiently and effectively is actually, you not doing anything. Instead, you should be employing the use of automated, algorithmic product level optimisation technology such as our own, otherwise your activity is never going to be as profitable as it could be.

With many merchants having in excess of 40,000 products in their Google Shopping inventory and some actually well above the 100,000 mark, even the thought of manually creating and managing the activity at any sort of granular level is pure lunacy. It would be a complete logistical nightmare, not to mention the army of people it would take to manage that many bids on a daily basis...

With the sheer levels of spend that the Google Shopping Paid Inclusion is going to drive, can you afford to risk it?

Article written by Mark Batson, Client Performance Manager