Inside Google Ads: A Deep-Dive Case Study

[00:00:01] It is Friday, November 8th. Today, a special episode, a full detailed case study of a successful Google Shopping campaign. This comes from our Google Ad correspondent, Jill Saskan-Gales. It is from her excellent podcast called Inside Google Ads. Definitely worth a follow if you run any Google Ads. Here's Jill.

[00:00:21] This client runs an e-commerce business, a Shopify store selling a certain niche of skincare. I'm not going to reveal her niche. She did give me permission to share her story without that detail. So we're just going to say skincare, but no, we're talking about a specific area of that industry. She has about between 100 and 200 products total available in her Shopify store.

[00:00:46] Now she started this business a year or two ago, and first approached me back in the fall of 2023. She wanted to get started with Google Ads, wanted to grow her business. It was shortly before the Black Friday, Cyber Monday rush. And so at that time, I helped her set up a standard shopping campaign. Given that she was brand new to advertising and still a pretty new business, I did not want to go all in on Performance Max for her yet. So we set it up. It had like $20 a day and just let it go.

[00:01:16] And that I didn't see her for months and months and months. So she came back to me and we took a look at what had been happening in the account with this standard shopping campaign that had just been left to do its thing.

[00:01:28] In May of 2024, she had gotten about 300,000 impressions on Google search and about 3,000 clicks to her website. So she had about a 1% click through rate. And for a standard shopping campaign, that's usually the benchmark I look for 1%.

[00:01:44] If you're 0.9%, it's okay. But if you have like a 0.5% click through rate, I'm a bit concerned. So it was good click through rate. She'd spent about $1,200, which meant that her average CPC was 38 cents. That is nice and low, but that's a little bit of a red flag for me, maybe too low.

[00:02:01] So she'd gotten 28 conversions. So not a ton of volume when you think about it, but not bad. We had just under a 1% conversion rate. It was a 0.9% conversion rate.

[00:02:13] I'm going to say a bit more numbers here, and then we'll get more into the details since I know that can be a little hard to follow when you're just listening.

[00:02:19] Her CPA, her cost per conversion was about $43, and this was not profitable. Her ROAS was 0.84. So that means for every dollar she had spent on ads over this period, she got 84 cents back in revenue.

[00:02:33] And then, of course, profitability comes after that. So overall, she had spent about $1,200 on ads and gotten a little over $1,000 in revenue.

[00:02:43] Now, things could have been a lot worse, but things could have been a lot better. And so when she came back, she said, okay, I've gathered data. I've spent this money. Now let's start to get this working.

[00:02:52] There are a lot of ways to go when you're trying to optimize a campaign. And so I like to think of myself as Sherlock Holmes, another potential Halloween costume for you,

[00:03:00] and figure out where are we going to have the most impact. I knew the click-through rate was pretty solid.

[00:03:06] So I wasn't concerned that people weren't interested in what she was buying, but that low CPC had me kind of questioning perhaps some of the traffic quality.

[00:03:14] Based on that, I knew I was going to want to check the search terms that were coming through for her.

[00:03:19] And then, of course, that conversion rate of 0.9%, I'd like that to be higher. And I wanted to know, is that a Google ad-specific thing,

[00:03:28] or was that kind of the ballpark of what the conversion rate looked like on her website, regardless of where that traffic came from?

[00:03:35] Lastly, we had an average order value of about $36. And so I knew a conversion rate of 0.9% could be okay if we got a lot more money every time someone converted.

[00:03:45] So I also wanted to go in and compare that $36 average order value to her average order value from other traffic sources.

[00:03:52] So those were all the different avenues I went down. I took about 30 minutes of investigation with her on the call together.

[00:03:59] And what we realized is that there was a real mix of products in here. She had thrown all her products into the shopping campaign because we were testing.

[00:04:07] And we determined that there were a few products that were performing really well and lots of products that were performing terribly.

[00:04:15] And the way we determined that is we went to the products tab, exported a report with all the metrics.

[00:04:20] And we looked at which products have a really high click-through rate versus low click-through rate, because that can tell us right away, of course,

[00:04:28] click-through rate is not conversion or ROAS, but like which ones are really standing out in a good way in search results.

[00:04:33] Which ones had at least gotten some conversions versus none.

[00:04:37] And what that ROAS and CPA looked like on a product level.

[00:04:42] From there, we were able to categorize all of her products, and again, there are about 100 or so, into heroes, kitties, and doggies.

[00:04:50] And we collaborated on those names. You can call them whatever you like.

[00:04:53] But the heroes were those products that were performing really well, like really driving the piece of good results we were getting.

[00:05:01] The doggies were the opposite. Sorry, doggies.

[00:05:04] Those were the ones that were, you know, getting a ton of impressions or getting a ton of clicks, spending a bunch of money, but no conversions.

[00:05:11] And then the kitties were the ones that were in between.

[00:05:13] The ones that we thought had potential to become heroes if there was more budget to do so.

[00:05:18] Very low budget we're working with. It was about $20 a day.

[00:05:22] So, with that information, we decided we were going to create two separate shopping campaigns.

[00:05:28] One for the heroes and one for the kitties.

[00:05:31] And all of those doggies that were eating up a lot of the air and the budget in this campaign and not earning their keep, kicking them out onto the street.

[00:05:39] Let's take a quick break to give a shout-out to this podcast's exclusive sponsor, Optimizer, OPT and YZR.

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[00:06:09] That's something that's really going to help you play Sherlock Holmes just like we're doing right now.

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[00:06:38] All right, back to our heroes, kitties, and doggies.

[00:06:41] On June 6th, we set the heroes and kitties live.

[00:06:44] And you know what?

[00:06:46] Initially, things didn't look so promising.

[00:06:49] If you look at our results for June, our click-through rates stayed the same as all those months previously, 1%.

[00:06:54] Our CPC went up a bit to $0.52 instead of $0.38.

[00:06:58] We got 12 conversions in the month of June.

[00:07:01] Our conversion rate did go up.

[00:07:03] But our ROAS went down.

[00:07:06] It had been $0.84.

[00:07:08] It went down to $0.79.

[00:07:10] And this is a point when a lot of people might start freaking out.

[00:07:13] What's going on?

[00:07:14] Turn it off.

[00:07:15] You don't know what you're talking about.

[00:07:16] But kudos to this client.

[00:07:18] She stuck with me.

[00:07:20] And I knew what we were aiming for.

[00:07:21] You know, I knew this would be tricky because we were really low conversion data to try to get something like Target ROAS to work.

[00:07:27] But we stuck with it.

[00:07:28] Okay?

[00:07:29] On July 8th, we had a little check-in.

[00:07:33] Later in July, she made a few tweaks.

[00:07:35] You know, what's a hero?

[00:07:36] What's a kitty?

[00:07:36] What's a doggy?

[00:07:37] Here were the results by the end of July.

[00:07:40] And whew!

[00:07:40] Glad to say things got better.

[00:07:42] So when we compare July versus June, same number of conversions.

[00:07:47] 12 purchases from Google Ads in July.

[00:07:49] 12 purchases from Google Ads in June.

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[00:09:50] What also ended up happening is in July, even though we didn't change the daily budget

[00:09:56] on the campaign, spend went down a lot.

[00:09:58] In July, we spent $287 versus $518 in June.

[00:10:04] Something else really interesting happened.

[00:10:06] In July, the click-through rate went down.

[00:10:09] In July, our click-through rate was just 0.7%, whereas it had been over 1% in June.

[00:10:15] But that's where bad news stops, good news starts.

[00:10:18] So we spent about half as much money but got the same number of conversions.

[00:10:23] So what does that mean?

[00:10:24] Our cost per conversion dropped.

[00:10:26] Previously, our cost per conversion was about $43.

[00:10:29] In July, it was only $24.

[00:10:33] How did that happen?

[00:10:34] Conversion rate changes.

[00:10:36] Now that the system had really figured out how to focus just on those heroes and those

[00:10:41] kitties that had the high potential, our conversion rate went up to 3.3%.

[00:10:46] It had been less than 1%.

[00:10:48] Now it was over 3%.

[00:10:50] So that means we got a combined ROAS across the two campaigns of 1.66.

[00:10:56] So our kitties had a target of 1.5.

[00:10:59] Our heroes had a target of 3.

[00:11:01] They were both achieving that.

[00:11:02] As you could imagine, the heroes ended up spending less than the kitties did.

[00:11:06] And overall, we had a 1.66 ROAS.

[00:11:09] Now a few interesting things to note here.

[00:11:12] CPC went up.

[00:11:13] We had 80-cent CPCs, more than double what they'd been previously.

[00:11:18] Still cheap, mind you.

[00:11:19] When we're under $1 for CPCs for shopping, I'm happy.

[00:11:22] But CPCs doubled.

[00:11:24] We got higher quality traffic is my theory because the conversion rate more than tripled,

[00:11:29] right?

[00:11:30] So it was absolutely worth it.

[00:11:32] Our value per conversion, our average order value also went up.

[00:11:36] It had been about $36 on average.

[00:11:38] Now it was $40 on average.

[00:11:39] So the good news was the campaigns did exactly what we wanted them to do.

[00:11:43] They got that efficiency for us.

[00:11:45] The problem, you may have noticed, is volume, right?

[00:11:49] We only spent $287.

[00:11:51] We only got $477 in revenue.

[00:11:55] We want more.

[00:11:56] So how did we do that?

[00:11:58] The beginning of August, the client removed a few products again based on the performance

[00:12:03] data we were seeing, kind of narrowed them further, but added two more cities to the

[00:12:08] targeting.

[00:12:08] Did not increase the budget.

[00:12:10] Just increased the area so more of the budget could spend.

[00:12:13] The campaigns combined did not spend the full budget in July.

[00:12:17] What happened in August?

[00:12:18] Things got even better.

[00:12:20] I'll spoil the ending first.

[00:12:22] In August, our ROAS was 2.69.

[00:12:25] From 1.66 ROAS in July to 2.69 in August.

[00:12:30] And revenue nearly doubled.

[00:12:32] We made $477 from Google Ads in July, made $861 from Google Ads in August.

[00:12:40] So how that shakes out is we got 21 conversions, 21 purchases from Google Ads in August, even

[00:12:47] though we showed fewer impressions in August than July, funnily enough.

[00:12:51] Click-through rate went up a little bit, still less than 1%.

[00:12:54] CPCs went up again.

[00:12:55] We are now $0.91 CPCs, but the conversion rate, 6%.

[00:13:01] 6% conversion rate from Google Shopping.

[00:13:05] And we weren't applying remarketing audiences or anything.

[00:13:07] It was not people searching for the brand name of this business because she's still really

[00:13:11] establishing her brand awareness.

[00:13:13] This was the same shopping campaign, just taking longer for that target ROAS to optimize since

[00:13:19] there was less data.

[00:13:19] And so now we were able to get a 2.7, 2.69 return on ad spend, exceeding targets, trending

[00:13:28] up and up and up as months go on and more data comes in.

[00:13:31] So why do I share this story with you today?

[00:13:34] I think there's a lot of interesting things you can learn, whether you're running shopping

[00:13:38] or not, from how we approach this campaign.

[00:13:40] First thing I'll say is that for smart bidding to work, you need sufficient time and patience.

[00:13:46] Many people, myself included possibly, if it were my own money, would have been a lot of

[00:13:49] freaked out if we went through all this effort in June, did all this optimization and like

[00:13:55] for what?

[00:13:56] A drop in ROAS?

[00:13:57] That's scary.

[00:13:58] I give huge kudos to this business owner for trusting in me and trusting in Google Ads

[00:14:04] to stick with it because it paid off when there was enough data for it to learn.

[00:14:08] It paid off.

[00:14:09] Target ROAS did learn.

[00:14:10] It achieved exactly what we wanted it to do.

[00:14:12] In fact, it even exceeded the targets.

[00:14:14] And given some more time, it was able to get that volume to catch up with the efficiency.

[00:14:20] Lesson number two is that this really shows there's no such thing as good metrics and bad

[00:14:25] metrics.

[00:14:26] I've said that my kind of rough benchmarks for standard shopping are 1% CTR, 1% CPC.

[00:14:32] So back in the early days of this campaign, it was exceeding 1% CTR.

[00:14:37] And CPCs were super low.

[00:14:39] Amazing, right?

[00:14:40] No, not so amazing.

[00:14:41] By the time our ROAS had gotten up to 2.7, our CTR dropped to 0.8%.

[00:14:47] Our CPCs tripled to 91 cents, still cheap.

[00:14:51] But these would be quote unquote things in the wrong direction.

[00:14:54] But it doesn't matter because behind the scenes, the algorithm was doing exactly what

[00:14:59] it needed to do to drive what we wanted, which was better ROAS.

[00:15:03] And we did that.

[00:15:04] ROAS was 0.84, dropped to 0.79 that first month, but then went up to 1.66 and then up to

[00:15:11] 2.69.

[00:15:12] So by August, for every dollar, this business owner, every one of her hard earned dollars

[00:15:17] she put into Google Ads, she got $2.70 back in revenue, which is profitable for her.

[00:15:23] And that's why I say Google Ads can be the money printing machine because that's what

[00:15:28] Google Ads is now.

[00:15:28] It's a money printing machine.

[00:15:30] Put a dollar in, get $2.70 out.

[00:15:32] How awesome is that?

[00:15:33] There's opportunity now to scale.

[00:15:35] Maybe add other cities, test out different products, get things ready to ramp up for

[00:15:39] the all-important holiday season.

[00:15:42] Third is that you don't need to do all the things everywhere all at once.

[00:15:46] Targeting every single product she offered was not serving her so well.

[00:15:50] So we were able to focus those campaigns on just the few products that were really going

[00:15:54] to make a difference for her business.

[00:15:56] You can do the same thing, whether it's products or keywords or audiences or ad targets.

[00:16:01] You don't have to advertise every single possible thing you can offer.

[00:16:05] Focus on the things that are going to drive good results.

[00:16:08] And then your kiddies, your farm team, your standby of what has the potential to drive good

[00:16:14] results if you can shove a little budget and focus that way.

[00:16:18] That is our Google Ads correspondent, Jill Saskengales, from a recent episode from her outstanding

[00:16:24] podcast called Inside Google Ads, available wherever you get your podcasts.

[00:16:29] Monday is a stat holiday in Canada.

[00:16:32] I'm still out of the country on vacation, so Steph will be with you all next week.

[00:16:36] That will do it for this week.

[00:16:38] Today in Digital Marketing is produced by EngageQ Digital on the traditional territories of

[00:16:42] the Snunamic First Nation on Vancouver Island.

[00:16:45] Our associate producer is the intrepid Steph Gunn.

[00:16:48] Our production coordinator is Sarah Guild.

[00:16:50] Ad coordination by Red Circle.

[00:16:52] Our director of Pulitzer nominations is Mark Blevis.

[00:16:56] I'm Todd Maffin.

[00:16:58] Have a restful weekend.

[00:16:59] Steph will see you on Tuesday.

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