The main PPC related dilemmas of e-commerce entrepreneurs
Article preview: From this article, you will find out how you should approach Google and Facebook marketing channels in your strategy, what is the importance of an e-commerce platform when running PPC campaigns, how marketing channels contribute in determining the final purchase, how to measure the rentability of your marketing investments and when is recommended to outsource PPC operations.
What should I choose for my online shop: Google or Facebook Ads?
Then, try to understand the marketing platforms and how they work. You can look at the difference between the two from this perspective: with Google you reach people who want your product or service, and through Facebook you get people to want your product or service. Both can bring you good results, but only if you have an effective strategy.
In terms of costs, both platforms are relatively similar, at least in the verticals in which we operate. In terms of conversion, platform performance is relative to the strategy you’re implementing.
Which e-commerce platform should I choose? Does it make any difference when it comes to PPC?
Furthermore, from a PPC perspective, any platform is welcome if it gives you:
- Optimal upload speed (Google recommends 3 seconds);
- Optimized Responsive version;
- A decent UX – intuitive, error-free, mobile-first navigation (a UX e-commerce guide by Google can be found here);
- The possibility of using filters and sorting products according to top sales, number of reviews etc. (but these features are available in mostly all platforms);
- The possibility to install tracking systems (e.g.: Google Tag Manager) – in this regard, there should be no integration issues on any platform.
Usually, in the initial planning stage, when developing a PPC strategy we carefully analyze the website and prefer not to go further with the implementation of the campaigns, until the issues related to the above functionalities are covered, because we are aware that a large part of the budget would be otherwise wasted.
Takeaway: From a technical point of view, from a PPC perspective, any e-commerce platform is OK as long as it ensures optimal loading speed, a decent responsive version and a flawless navigation.
In-house PPC or a specialized agency?
Regardless of the development stage of your store, I believe it is essential for any entrepreneur to understand how these platforms work, generally speaking, and to set specific and realistic performance goals. Both in-house PPC management and outsourcing to an agency have advantages and disadvantages. Let’s see them.
In-house PPC advantages:
- you know your products better, your target audience and the competition;
- your campaigns can have a unitary approach across all channels;
- you have flexibility and a higher reaction time. You can intervene faster in campaigns and make real time decisions, skipping the whole process of communicating with the Account Manager or PPC manager.
Disadvantages of in-house PPC:
- you spend a lot of time. The platforms are complex. Did you know that in the last 7 months alone, Google Ads has brought over 60 updates to the platform? Facebook and Google change something on a monthly basis, and although the illusion of automation exists (for example, automated bidding strategies), the automated processes are not effective for small businesses. Of course, you have the option of tools (3rd party platforms, AdWords Editor, scripts) that make your work easier, but they also require a lot of learning time, which you have to sacrifice from the operational part.
- you invest money until you test things, trial & error. There are important mistakes that beginners make and this can cost time and money. From something small such as “CPC 30 lei, instead of 0.30 lei”, to the fact that you run Display campaigns, but don’t exclude placements that consume a very large budget or you don’t know the types of keyword matching and attract irrelevant traffic. Sure, you have the option of hiring someone specialized, who can take over more marketing activities in addition to PPC, but you need to cover a significant budget.
So, due to lack of time and know-how, many entrepreneurs choose to outsource this segment to a freelancer or PPC agency. When I was working at Google, there were a few hundred marketing agencies, and now I guess their number is even higher. However, one thing I noticed then was that none of these agencies was specialized in a certain field. Most of them did everything: e-commerce, lead generation, branding etc. That’s why, at Optimized, we wanted to do things differently and specialize strictly in the e-commerce niche.
When choosing an agency to work with, try to find out: what skills they have, what companies they have in their portfolio, what are the references from clients, who will take care of your account (background, experience) and so on.
Advantages of working with a PPC specialized agency:
- you have access to advanced know-how through exposure to multiple accounts (if you have an online store, you’ll want to work with an agency with PPC e-commerce experience). This would theoretically translate into lower costs for you, avoiding the situations mentioned above. In addition, together with the platforms, we also evolve as specialists. I’m still amazed at how many new things I can implement in accounts I’ve been managing for several years. From a full account reshape to a complete rethink of certain campaigns.
- access to trials, advanced technical support and beta products from Google and Facebook (personally, I believe the latter are only relevant for a very, very small part of the accounts in Romania).
Disadvantages of working with a PPC specialized agency:
- it takes time for the team to become familiar to your business and products, so consider a few months for this process to complete;
- longer response time, a communication process that includes an account manager, PPC manager, regular calls etc.
Takeaway: ask for external help if you know you’re not ready to hire someone internally for PPC or you can’t spend enough time managing campaigns (at least 2-4 hours a week for your account and at least another 4 hours a week for study: research, subscriptions to profile publications, advanced trainings).
What does e-commerce attribution mean and why do I see different results in Google Analytics compared to Google and Facebook Ads?
Conversion attribution in e-commerce is a complex subject and unfortunately there is no perfect model. I’m sure you’ve experienced different results from Google Ads and Facebook Ads compared to Google Analytics so far. And it’s perfectly normal, because it’s important to understand that (1) these platforms measure conversions differently, and (2) for an overview of the weight of each marketing channel, you need to use a different last-click assignment model.
When should you be interested in e-commerce attribution? It’s simple: whenever you find that a significant part of the conversions on the website occurs in more than 1 session from a user.
To do this, go to Google Analytics> Conversions> Multi-Channel Funnels> Time Lag (make sure you select the Transaction objective).
Notice how 64.68% of visitors place an order the first day they interact with the respective shop. Also, the table above shows that 13.8% of visitors convert after 12-30 days. The longer the purchasing process, the more touch points needed to determine users to convert.
So, the next step is to go to Google Analytics Conversions > Multi-Channel Funnels > Path Length
Notice how only 43.7% of transactions are determined by just one marketing channel, so more than half of the conversions need more touch points. Therefore, yes, the attribution model is very important. You are most likely running PPC and social media campaigns, use SEO and email marketing, and you’d like to know how these channels can be influenced and which one of them is more important in finalizing the conversion.
To find the connection between these marketing channels, go to Google Analytics – Conversions > Multi-Channel Funnels > Top Conversions Path
Furthermore, seeing different results in Google Analytics, compared to Google Ads or Facebook Ads, does not necessarily mean that the tracking implementation is wrong, but it may be a result of different tracking methods. In Google Analytics, by default, the conversion is assigned to the Last Non-Direct Click source. Conversions are counted in Google Ads only if the user clicked on an ad from the Google Ads account. Here are Google’s explanations for this matter. Things happen similarly in Facebook Ads. Moreover, there is a conversion window (the standard timeframe in which the platform tracks and assigns the conversion is 30 days, but it can be configured).
A clear example: someone saw your paid ad in Google Search, clicked, accessed the website and subscribed to the newsletter, without making any transactions on that day. In a few days the user will receive your newsletter, access the website and place an order. Well, that conversion will appear in Google Ads, attributed to the campaign / keyword the user clicked on. In Google Analytics, however, that conversion will be attributed to the Email source.
Takeaway: Find out what is the purchasing pattern in your online shop, test Google Analytics attribution models, and analyze the numbers using anything other than last-click to credit all the channels contributing to the conversion.
How do I measure the profitability of my PPC campaigns?
At Optimized we have an approach focused on performance and profitability, and the most important terms we insist on in our monthly reports are ROAS (return on ad spend) and ROI (return on investment). Why? It’s very simple. CPC and CPA (cost per acquisition) are technical indicators that help us optimize our campaigns, but they don’t express how profitable our investment in that platform is.
ROAS determines the return of the advertising investment and, fortunately, has a simple formula: Generated sales / Advertising expenses.
For example, for 3Pitici ROAS is translated as follows: let’s say that every month we invest approximately 10.000 lei in Google Ads and from this channel we generate 60.000 lei in total sales (pay attention, we’re not considering the conversions brought by the brand). This equals a ROAS of 60.000 / 10.000 = 6. What does this mean? That for every 1 Leu invested, I generate 6 Lei. Not bad!
An optimal ROAS is different from company to company, depending on the commercial margin, the operating costs and, in general, the health of the business. While some companies are profitable at a 10:1 ratio, others are fine with a 3:1 ratio.
Most often, we operate with a minimum target of 4:1, and achieving this goal means not only effective campaigns, but also campaigns that generate decent revenue.
(((Campaign Sales Revenue x Margin) – Advertising Expenses) / Advertising Expenses) x 100
If at 3Pitici I would operate with a commercial margin of 20%, this means that the Google Ads ROI would be: (((60.000 x 0.2) – 10.000) / 10.000) x 100 = 20%. It’s a good result, but notice that the ROAS doesn’t look so great in this context anymore.
Takeaway: When you have an online store and run PPC campaigns, it’s important to analyze metrics like ROAS and ROI, to determine the profitability of your campaigns.
What other dilemmas do you face when it comes to e-commerce PPC? Write an email at email@example.com or leave a comment on this blog post.
At Optimized we are specialized in e-commerce PPC campaigns (Google Ads and Facebook Ads). Unlike other local agencies, our portfolio only includes online stores and our approach is based on clear performance objectives (CPA, ROAS. ROI). Our team consists of PPC specialists and certified Google trainers, as well as people with hands-on experience in e-commerce.
Our strategies are not generic, but strictly applied to e-commerce. We work with stores that want to profitably scale PPC campaigns, with clear objectives, aware that marketing is an investment.