Even the most sophisticated Google Shopping campaign will fail if it’s not monitored and optimized regularly. You should be checking in on your campaigns daily, though not every check-in needs to be in-depth.

For quick daily check-ins, look out for these red flags:

• Zero or low impressions - This is the most common issue and it’s usually attributed to either...
• A bid that’s too low
• Low quality score, which results from…
• Weak ad relevance (data in feed not matching search queries)
• Low CTR / expected CTR
• Bad landing page experience
• Impressions but no clicks - This means that, although Google is serving your ads, shoppers aren’t clicking. That’s usually because of the visible factors in the ad preview:
• Title
• Price (usually because it’s too high)
• Image
• Clicks but no conversions - This is almost always a result of the landing page and checkout process. Does the landing page inspire buyer confidence? How easy is it for shoppers to check out? Do new visitors have to create an account before being allowed to make a purchase? Is shipping not free? All these elements might affect whether shoppers commit to buy.

Deeper analysis, however, should be done weekly for campaigns with heavy traffic, monthly for campaigns with lighter traffic. For this analysis, focus on identifying trends. That means establishing benchmarks in the early stages of the campaign and revisiting those to identify patterns in performance.

Conversion Rate

Conversion rate can be a simple yet powerful metric. It tells you how effective your Google Shopping campaigns, landing pages and overall strategy are.

Formula: Conversions / Clicks

Average Order Value

AOV is one of the most telling metrics when measuring the profitability of your Google Shopping campaigns. It will tell you which products are the biggest drivers of revenue.

Take the total amount of revenue divided by the number of orders during the same period. Use this formula to determine AOV of the channel, brand, SKU, category, and any other product grouping important to your store.

Formula: Average Order Value = Total Revenue / Number of Orders Taken

Cost

Successful retailers know the secret is not just in selling. It’s in selling profitably. The first guard against unprofitable selling is managing your cost.

For online retailers, this often comes down to measuring costs accrued by individual verticals (i.e., sales channels, brands and even SKUs).

Tip: Use GoDataFeed’s cost analytics to cut up reports based on these metrics. This will make it easier to get a transparent look at your Cost without the need for expensive ecommerce analytics solutions.

Cost-of-Sale Percentage

Cost-of-Sale Percentage (COS%) is the actual total cost of converting an item relative to the revenue it generated. For example, if one item with a $100 price tag sold and took $15 in click costs to convert, the COS% for that item at that point is 15%.

Unfortunately, you have to have a sale first in order to get this value. So what happens when a product has not sold yet? (See estimated cost of sale percentage below.)

Formula: COS% = Click Costs for Product / Product Revenue

Estimated Cost of Sale Percentage

GoDataFeed’s ECOS% preempts cost of sale to avoid running up the tab on Cost of Sale for products that haven’t acquired a sale yet but are already accruing ad spend.

ECOS% fills in the blank for COS% for products that have yet to convert. This provides a reliable predictor of what the actual COS% might be assuming the next click is a sale.

Tip: Pay close attention to ECOS% data and take action on products that don’t sell before they eat into profits from products that do sell.

Cost Per Order/Cost Per Acquisition

CPA tells you how much you’re spending on average to achieve a sale.

Say your monthly ad spend on Google Shopping is $5,000 and with that, you’ve acquired 202 sales. Your CPA then would be $24.75.

It is vital to measure CPA in relation to AOV to determine your Google Shopping campaign’s profitability.

Use GoDataFeed’s analytics tools to create CPA and AOV reports for Google Shopping to monitor CPA.

Formula: Ad Spend / Orders

Return on Ad Spend

ROAS tells you how much revenue your campaigns are generating in relation to your campaign spend. In other words, for every dollar invested in Google Shopping, how much money did you get back in revenue?

Use GoDataFeed’s cost reporting feature to measure ROAS in your Google Shopping campaigns and cut this report by SKU to identify which products are your big sellers (and which are just costing you money).

Formula: (Revenue – Cost) / Cost

Continually monitoring your campaigns and taking the appropriate actions to optimize is the only way to ensure profitability in Google Shopping.

Next in the Google Shopping optimization series, we’ll get into landing pages and the checkout process.