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Feed: Google - Bidding strategies for high-performing PLAs

Jason S
Jason S
  • Updated

Google Product Listing Ads (PLAs) provide an excellent opportunity for eCommerce businesses to increase their online sales. However, to maximize the benefits, it is important to understand how bids affect PLAs' position and frequency, and how to establish a smart bidding strategy and budget. In this article, we will discuss effective bidding strategies for PLAs that will help you achieve a balance between budget and impression share and drive higher sales.

Factors to Consider When Bidding

When bidding for PLAs, it is crucial to account for several factors that influence your ad's placement and frequency. The most important factors are:

Price: The bid should take into account the product's price. You should not bid the same amount for a $10 pair of socks and a $300 pair of shoes. Use custom labels such as "Under10," "Under50," etc., to differentiate products and apply bids accordingly.

Profit: Knowing your profit margins will help you determine whether a higher bid makes sense on a product, regardless of its price. Use custom labels such as "LowMargin," "HighMargin," etc., to distinguish product groups based on profit margins.

Conversion Rate: How a product performs should affect how you bid for that product's PLA, regardless of its price and/or margins. Strong performers (low CPA) should be rewarded with higher bids, while products whose CPAs are high should be demoted. Use custom labels such as "BestSeller," "LowSeller," etc., to promote/demote products based on performance.

Applying "Levers"

One way to pragmatically establish bids is to use a formula like this:

  • Price - Cost = Profit
  • Profit * conversion rate = Maximum bid
  • Maximum bid * 0.5 = Minimum bid
  • Minimum bid to maximum bid = bid range

The bid range allows you to adjust bids based on business needs while working within a profitable range. Other factors to consider when bidding for PLAs include performance, seasonality, competition, brand, category, and product type.

Hacking Your Budget

Remaining competitive will require a smart bidding strategy and a workable budget. If your bids are high in relation to your budget, your PLAs will be at a disadvantage. To overcome this, you can pool your weekly budget into concentrated timeframes rather than spread out 24/7 across the whole week.

To do so, you should think about your target audience and when they shop. Use the information you have about your customers' shopping behavior to set a campaign ad schedule that will maximize your products' impression at the right times. For instance, if your target audience is more likely to shop on weekdays between 6 p.m. to midnight, you can schedule your ads to appear during that time.

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