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Wednesday, 25 September 2019

Revenue: The Only Goal of Digital Advertising


Revenue: The Only Goal of Digital Advertising


Ask any business owner or CEO if they want to grow their business and they will ask you if it’s a loaded question. They will always say yes to the question of growth, it’s their job to grow revenue and increase profits. Ask the same person what the goal of digital advertising is and they will tell you that they want more sales or sales leads either in-store or online. All of these equate to revenue.

Isn't ROAS the goal?


No it is not. Make ROAS the goal and you will restrict growth opportunity.  ROAS (return on ad spend) and CPA (cost per acquisition) are both KPIs (key performance indicators). KPIs are a very useful way to determine how effective your digital advertising spend is tracking towards your revenue goal.

Targeting a higher ROAS or lower CPA can decrease revenue, margin and profit contribution


Let’s look at four simple examples of a website targeting ROAS and assume they make 50% margin on goods sold.  Each column increases the budget by $1,000 and decreases the ROAS. To keep things simple let’s ignore lifetime customer value. 


Scenario 1
Scenario 2
Scenario 3
Scenario 4
Budget
$1,000
$2,000
$3,000
$4,000
ROAS
7:1
6:1
5:1
4:1
Revenue
$7,000
$12,000
$15,000
$16,000
Margin
$3,500
$6,000
$7,500
$8,000
Profit Contribution 
$2,500
$4,000
$4,500
$4,000

Acceptable
Good
Optimal
Diminishing 


Scenario 1 is acceptable

This is where most advertisers feel most comfortable. Spend as little as possible and get the largest possible return. This is a very acceptable way to start and it is also understandable if you have capital restrictions.  However, traffic, sales and revenue are often restricted by the higher ROAS target. In order to achieve a higher ROAS in digital advertising you need to bid lower than your competition and this will limit the size of the audience you are able to reach.

Scenario 2 is good 

This can be a leap of faith for some advertisers but when they do accept that increasing budget and relaxing the ROAS target leads to more revenue, margin and profit contribution from advertising, they are well on their way to growth. 

Scenario 3 is optimal 

Scenario 3 is when your digital ads are running at their peak. You are spending more, getting less ROAS but higher returns, margins and profit contribution. I have chosen to ignore lifetime customer value in the table above but if you included lifetime value you would probably relax the ROAS and increase the budget a little more.

Scenario 4 is diminishing

It is possible to get to the point of diminishing returns. You can absolutely overpay and get the same returns that you would have for less. This scenario is double the ad spend of scenario 2 with a reduced ROAS, leaving you with a lower profit contribution.

This fear of diminishing returns is what leads to advertisers constantly pushing for a higher ROAS. A solution for advertisers is to gain a better understanding of their gross margin.

You can build a similar model as the table above for a CPA example which will tell you the same thing because the same rules apply. A lower budget and lower CPA means you bid lower, have less reach and ultimately sell to less customers.

How do I measure campaign efficiency if its not ROAS? 


That is a very good question that deserves a very good answer. To answer this specifically I would need to unpack each digital campaign type separately.

If you are still reading I have convinced you that the higher budget and lower ROAS mathematically can drive more revenue, more margin and contribution to company profits. 

But you rightfully want to know if it can be even better. 

“Wouldn't it be great to get increase my ad spend and increase my ROAS too” 

Yes indeed it would. 

All of the popular digital media platforms (Google, Facebook, Instagram, YouTube) have a measure of ad quality.  They don't do this for the advertiser they do it for themselves.  

All of the key media players obsess over user experience of their platforms. Google wants users to choose them to search and shop over Bing or Amazon and users won’t stay around if the ads are deemed to be annoying or irrelevant. The media platforms have also finally understood that if advertisers get good returns they will keep spending.

Increase ad quality metrics to decrease CPC and increase ROAS 


Ad relevance, landing page experience and Quality Score are examples of ad quality metrics that the major digital platforms use to show advertisers the areas they need to improve on. In every case an increase in score of any of these quality metrics will reduce the amount you pay per click. 

At this point I have to remind you that the ad auctions of all the major digital platforms are all developed by engineers.  As one of my favorite Googlers once said, “If I had designed Google Ads instead of an engineer, there would have been more colors”. 
Let’s stick with Google for a second and take a look at their ad quality metrics to illustrate how increasing relevance reduces CPC. 

Quality Score: 

Quality score is measured at the keyword level. 10 is the highest and 1 is the lowest. To optimise quality score you would look at the Search Queries and set some as negative and move others to their own exact match ad group.

Ad Relevance and Landing Page Experience: 

Ad Relevance is represented in the interface as average, below average and above average. Improving your ad copy and its relationship to the targeted keyword will improve your ad relevance which will also increase your click through rate which increases your quality score and reduces your CPC.

Lost you yet? Once again, what the media platforms are trying to do is improve the user experience of ads on their platforms at a mind boggling scale. If your quality score is too low your ads won’t show at all, but if you increase it, you will be rewarded with a lower CPC which means you get even more sales for a reduced cost relative to your competition.

In summary, the goal of digital advertising is always revenue

  1. The goal is revenue
  2. ROAS is a KPI that shows you the effectiveness of your budget
  3. Higher budget with a lower ROAS can deliver more revenue
  4. Optimise ad relevance for campaign efficiency

Grow your revenue through digital advertising and Dynamic Creative

If you want to use Google ads to grow and scale your business and reach a point of predictable revenue then Dynamic Creative can help. We integrate your website with our Ad Platform & optimise your product and category data to match the way that shoppers search, browse and buy. You can get a Google Shopping feed, as well as Google Search & Shopping ads, for every product listed on your website. With over 17 years experience in Google Ads and over 400 websites globally, we have the ad platform and experience to help you grow and scale your business. Find out how you can start with us for FREE via our website at www.dynamiccreative.com

Wednesday, 11 September 2019

How to set up Google Shopping ads


How to set up Google Shopping ads

As effective as they are, setting up Google Shopping Ads can be complicated. We’ll go through everything you need to know about how to set up Google Shopping ads. 

If you need help with any stage of setting up your Google Shopping ads you can contact us via our website or you can create Shopping ads through our Ad Platform.

The first thing you’ll need to know when creating your Google Shopping ads is how to add products to Google Shopping with a Google Shopping feed. 

How to add products to Google Shopping


In order to add your products to Google Shopping, you’ll need a Google Shopping feed. A Google Shopping feed is a collection of your website’s products and relevant product information. It organises your website’s product data in a readable format ready to connect with Google Ads.

The product data must include a title, description, link to your product landing pages, a link to the product’s image, availability, price and for most products, brand and GTINs. Your feed must always stay up to date with your website’s information to avoid ad disapprovals for inconsistencies. 

How to set up Google Shopping ads

Google Shopping feeds can be created in two formats, .txt or .xml. You could create a feed in Google Sheets using a Google Merchant Center template and manually enter and update the required product information. You could populate your feed in Google Sheets using Structured Data markups through your website’s HTML, however there are imitations around adjustable landing pages. Another option is to use the Dynamic Creative Google Shopping Feed tool to easily create an optimised feed, that automatically updates, through API integration. 

Once you’ve created your Google Shopping Feed, you must upload and register your feed in Google Merchant Centre.

Just need a feed? Use our Google Shopping Feed tool

How to set up Google Merchant Centre

Google Merchant Center is a tool that allows retailers to connect their product data to Google Ads to create Shopping Ads. Without uploading your product feed to Google Merchant Center, you cannot advertise your products in Google Shopping.

So firstly you’ll need to create a Google Merchant Center account with a Google account and Gmail address. You’ll then have to input your business and contact information. Part of this process includes verifying and claiming your website URL. 

Google needs to confirm that you own your website and are authorised to associate your Merchant Centre account. There are 4 methods of verifying your website; by uploading an HTML file, installing an HTML tag, using Google Analytics or implementing Google Tags. The most common method is to download the HTML verification file and upload it to your website. Find out more information on verifying your website in Google’s Merchant Center help files.

Once you have completed one of the verification methods, you will then be able to claim your URL in Google Merchant Center. 

If you’ve created and registered your feed, you can then upload your product data to your Google Merchant Center account. You can upload your .xml or .txt file manually or you can create an uploading schedule if you plan to make ongoing changes to your Google Shopping Feed. You must also enter your shipping details within Merchant Center to avoid disapprovals.Then you can create your first Google Shopping Campaigns in your Google Ads account.

How to create Google Shopping Campaigns

Sign in to or create your Google Ads account.You will be able to create Google Shopping Campaigns from within Google Ads. 

The first thing you’ll need to do is link your Google Merchant Center with your Google Ads account by sending a link request from your Merchant Center account to your associated Google Ads account. 

From your Google Ads account landing page, click on the ‘campaigns’ tab on the left-hand-side of the page and click on the blue plus button to create a new campaign. 

Identify your goal and select Shopping as your campaign type. Select the appropriate Merchant Center account and the associated country of sale. You will then be able to choose your Campaign name, bid strategy, budget, campaign priority, targeted networks and locations. 

Once you have selected the right settings for your campaign you can create your ads and ad groups. Select whether you would like individual product ads or shopping showcase ads then set an ad group name and bid. Once you have done that, there will be a Google Shopping ad for every product in your Google Shopping feed all within one ad group. 

These steps simply outline the creation of your Google Shopping campaigns. You will need to set up conversion tracking to know where to optimize and how your ads are performing. You can do this through your Google Analytics account, if it is linked to your Google Ads account, or through global site tags and Google Tag Manager. With your conversion data, you can optimize the products within your campaigns, your location targeting, device targeting, time of day targeting and more. 

Want conversion tags set up for you? Reach out via our website


To utilise Google’s Machine Learning in these optimizations, you need to know how to set up Google Smart Shopping. 

How to set up Google Smart Shopping

Once you have recorded a verified conversion from your new Google Shopping ads you will be eligible to create a Google Smart Shopping campaign

As with your standard Google Shopping ads, navigate to ‘Campaigns’ and click the blue plus button on your screen. Once again, identify your goal and click Shopping as your ad type, now you’ll be able to see a Smart Shopping selection available to you. Set your campaign name and budget and proceed to ‘Product groups and assets’. 

You can select which products you’d like to advertise and upload assets for your Smart Shopping Display Ads. You’ll need to upload a marketing image and write headlines and descriptions that relate to your business and products much like you would for a text ad. Alongside these ads, you will see product based display ads that will be shown as part of your Google Smart Shopping campaign. 

Hit save and you will have Google Smart Shopping ads that use Google’s Machine learning to optimize your campaigns and maximise your conversion value. 

Want Google Smart Shopping ads optimized for Machine Learning? We can help!

Dynamic Creative Google Shopping ads

Whether you need a Google Shopping feed, a Merchant Center account, Google Shopping and Smart Shopping ads created or help optimizing, Dynamic Creative can help.

We integrate your website with our Ad Platform & optimise your product and category data to match the way that shoppers search, browse and buy. You get a Google Shopping feed and/or Google Shopping ads for every product listed on your website. 

With over 17 years experience in Google Ads and over 400 websites globally, we have the ad platform and experience to help you grow and scale your business. Find out how you can start with us for FREE via our website at www.dynamiccreative.com