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Target ROAS vs. Maximize Clicks vs. Manual CPC For Google Shopping
When you set-up a Google Shopping campaign, having the right structure is crucial. One of the most important steps to getting high-quality clicks and a strong return on investment is selecting the right bid strategy.
Our agency, The Media Captain, is unique because we started our own seven figure eCommerce brand in DermWarehouse. We’ve amassed more than 500,000 customers, with the majority coming from Google Shopping.
I’m going to dive into the different bid strategies associated with Google Shopping and outline the pros and cons. I will also be sharing examples based on our own experience of how each bid strategy either negatively or positively impacted our performance.
Maximize Clicks for Google Shopping
When it comes to Maximize Clicks, Google takes your average daily budget and automatically sets your maximum cost per click [source]. The goal is to get you the most clicks within your budget.
The issue with maximize clicks, from my experience, is that the click quality isn’t great. Google doesn’t care about driving conversions to your eCommerce site. Their intention is simply about clicks, hence why it drives a lower tiered type of traffic.
For DermWarehouse, we tested maximized clicks on one of our Google Shopping campaigns. The results were no bueno. Our ROAS, which typically is above a 3:1, dipped below a 2:1. We let this campaign run for several weeks until we had to pause to stop the bleeding.
Related Blog: What’s a good return on ad spend for an eCommerce brand?
Expert Tip: Monitor your search terms like a hawk when running maximize clicks to audit the quality of your Google Shopping traffic.
In addition to our ROAS suffering for DermWarehouse, so did our search terms. We are a reseller of over 100 skincare brands, like Glytone and SkinMedica. Google Shopping converts well for us when people search for the brand we carry or the name of the specific products they are interested in purchasing. When we tested maximize clicks, the search terms were more broad. Google was trying to drive as many clicks to our site and wasn’t as concerned about whether the visitor converted into a customer.
Below are queries from our search terms report when we were running our campaign with maximize clicks. The query “what scar cream do plastic surgeons recommend,” is too broad and too early in the funnel, hence why our campaign was falling beneath a 2:1 ROAS. When we run campaigns with Target ROAS, we typically see higher quality queries come through, which results in a better ROAS.
Pros to Maximize Clicks with Google Shopping
- If you don’t have any conversions, maximize clicks can be a good way to drive initial traffic.
- You’ll often hit your budget with maximize clicks.
- You’ll have data at your disposal for many products to determine if traffic is converting into sales
Cons to Maximize Clicks with Google Shopping
- The quality of the traffic can be subpar
- Google doesn’t care whether or not the traffic is converting
- Your campaigns may not be profitable or as profitable as other bid strategies
Target ROAS for Google Shopping
With Target ROAS, your campaign is trying to optimize for conversions. You input your ideal return on ad spend and Google tries to hit this benchmark.
The issue with Target ROAS is businesses often get greedy. They will put 500% as their Target ROAS, which is an unrealistic benchmark that Google can’t fulfill. Because of this, Google won’t you won’t hit your daily budget.
My recommendation is starting with a 150% Target ROAS. This should allow you to get clicks for your Google Shopping campaign while simultaneously being optimized for conversions. Once clicks and conversions are coming through, you can gradually increase the Target ROAS percentage.
For DermWarehouse, we have our target ROAS set to 150% and we constantly exceed the return on investment. In the month of May ‘23, our target ROAS was 2.85 (aka 285%). The reason we set the target ROAS low at 150% is because we want to get enough clicks to hit our budget while also driving conversions. A lot of people assume you will never get results above the Target ROAS you set and this simply isn’t the case.
Pro Tip: With DermWarehouse, 30% of our customers become repeat customers with an average repeat order of every 3.5 months. We understand that our initial ROAS may not look great but we know profitability comes down the road with our repeat business.
Additional Note: If you still can’t get clicks with a relatively low Target ROAS, consider switching over to Maximize Clicks until 5-10 conversions come through. Once conversions trickle in, you can switch back to Target ROAS.
Pros to Target ROAS with Google Shopping
- Your campaigns can become profitable
- Higher quality search terms
- The process is automated and you don’t have to manually bid
Cons to Target ROAS with Google Shopping
- If you have limited conversion data, it can be difficult to hit your budget and leverage all the benefits of Target ROAS
- You may have to revert from Target ROAS to Maximize Clicks or Manual Cost Per Click until you have enough conversions
- Your ideal Target ROAS likely isn’t in line with what Google’s thinking so you’ll have to lower your expectations
- You may see very high cost per click associated with some products within your campaign
Manual Cost Per Click For Google Shopping
With manual cost per click, you control your own destiny. Rather than relying on Google to automatically set your bid, you determine the bid on each product. While this sounds good in theory, it’s very hard to manage for most eCommerce businesses due to the size of their shopping feed.
With DermWarehouse, we have over 1,000 SKU’s. To increase and decrease bids based on top and low performers would require a lot of work. Even if you had a full-time person dedicated to your PPC Management, they wouldn’t necessarily outperform Target ROAS or even max clicks.
Related Blog: 50 Questions to Ask Your Paid Search Agency to Audit Performance
Manual CPC can be great if there’s a specific product or set of products you really want to promote and aren’t receiving the volume with Target ROAS or Maximize Clicks. With Manual CPC, You can segment this product into its own campaign and manually bid for more exposure.
For DermWarehouse, when we released our instant eye lift product, we wanted to drive clicks to evaluate key data points such as click through rate and return on ad spend. In our standard shopping campaign, the instant eye lift wasn’t seeing the light of day as it was competing with thousands of other products. We moved this product to a manual CPC campaign that started with a $1.00 bid. We continued to increase the bid and found that $1.80 was the sweet spot. Once we hit this sweet spot, our product was getting great exposure as one of the top products to populate in Google Shopping for queries pertaining to instant eye lift (see below). This is a good example of segmenting a product and then using manual CPC.
Pros to Manual CPC with Google Shopping
- You have more control on the bids
- You can continuously increase bids until your products populate
- This method will give you a good idea of what it takes to appear in top positioning on Google Shopping for certain queries
- Great for testing on a subset of products
Cons to Manual CPC with Google Shopping
- Time consuming
- Difficult to manage
- No guarantee this time consuming process outperforms more automated styles of bidding.
In Closing
When you have a Google Shopping campaign, it requires testing numerous bid strategies to find your sweet spot. Most of the time, I recommend Target ROAS but manual bidding and maximize clicks each have benefits within the Google Shopping ecosystem.
If you have questions on your Google Shopping bid strategies or campaign structure, don’t hesitate to contact The Media Captain.
