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Smart Shopping vs. Standard Shopping Campaign

#Google Ads
Smart Shopping vs. Standard Shopping Campaign

Smart Shopping campaign in Google Ads has more advantages over standard shopping campaigns. Let's look at it in the example of an online store of electronics and household appliances.

Campaign dates: from 08.04.2021 to 10.12.2022

 For convenience, we will take two reference points to compare the results: 

08.03.2021 — 07.04.2021 — Before our "intervention" into this customer's advertising campaign.

10.11.2021 — 09.12.2021 — Last reporting period.

Initial data

Aim: Increase in profitability (increase in the number of transactions, increase in the value of the average receipt, decrease in the share of advertising costs)

Budget: 32,000 ₴

Revenue: 681,024 ₴

Share of advertising costs: 4.74%

Number of transactions: 237

Price per transaction: 136.09 ₴

Considering the margin of ~ 7%, we can conclude that the advertising was profitable, but always possible to do even better.  To begin with, we launched the Standard Shopping Campaign. And we were, to put it mildly, upset.

This result did not suit the client or us at all. So, we had to change something and be fast.

We identified two possible areas of optimization:

1) Smarter categorizing of products and trying to fix the situation by adjusting the rates

2) Using another version of the advertising campaign, namely Smart Shopping.

It's easy to guess from the name of this case what we have chosen.

Also, we must make some adjustments to the campaign, namely:

1) Redesign ads. In a Smart Shopping campaign, you must also add a banner to the product feed.

2)  Determine a rate-setting strategy. In Smart Shopping campaigns, you can't use "manual" rate-setting and can only choose from two available automatic strategies:

  • Maximum conversion value
  • Target return on ad spend

Although the first results were better, they were also far from cost-effective.

But let's not forget that if Google Ads uses the word "Smart" in the campaign name, you must give the algorithms time to train better.

Deciding that there was still potential in this advertising campaign, we decided to give it a try.

By slightly changing the rate settings, namely the Target ROI for advertising, we gave this campaign what it needed to start showing good results – time to learn.

We received these results the following week: 

From month to month, this advertising campaign only improved its performance. Until one very instructive moment.

All smart advertising campaigns are fragile, and any significant change can bury all the previously earned results. This is exactly what happened on one of the days when we saw that the share of advertising expenses had grown very much: spending has increased, and income has decreased.

We were immediately interested in the "Budget" value, which was three times higher than average. But what happened? Automatic application of Googlе recommendations.

This proves marketers should make all Smart Shopping changes as carefully and smoothly as possible. You don't need to make any sudden budget jumps, significant changes in the feed, or global changes in the rate values of the trained campaigns. Otherwise, you can say goodbye to the optimization data; consequently, the results may get much worse.

Let's see what we've achieved in 8 months by using Smart Shopping campaigns, training, and optimizing their operation.

Budget: 55,000 ₴.

Revenue: 15,093,376 ₴

Share of advertising costs: 0.36%

Number of transactions: 1,365

Price per transaction: 18.27 ₴

Let's look at the relative change during an advertising campaign for more clarity.

As you can see, using Smart Shopping, we reduced the share of advertising costs by almost 85%. Revenue increased by nearly ten times, and the number of transactions increased by five, indicating that every single transaction began to bring in more revenue.

In conclusion, I would like to say that using Smart Shopping campaigns is not as scary as it seems.  You just need to take your time, let companies get enough optimization data, and don't make critical changes if the campaigns are already working well and bringing good results. After a while, you can see that Google algorithms can do wonders. 

The author of the article

Bohdan Krupa

Bohdan Krupa

РРС Team Leader

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