How external bidding software can limit your Shopping potential

By Matthew Robson
24th July 2023

What’s more effective for your Shopping approach, Google’s smart bidding strategies or external bidding software? When it comes to your Google Shopping campaigns – which for some brands can span thousands of different products / SKUs – it’s not had to see why software which segments your campaigns so granularly is appealing.

Managing Google Shopping campaigns can be complex, with hundreds of variables to assess on a sometimes hourly basis to ensure you’re fully optimised towards the best strategy. Optimising towards a substantial number of products on an individual basis product-by-product isn’t always feasible, or indeed, a good use of time.

There are plenty of external Shopping feed tools out there which will automate the process for you – using machine learning to scour various algorithms in speed time and make hundreds of bid adjustments to your campaigns on a daily basis. Some brands and agencies even use their own proprietary software. But is this the best approach?

The limitations of bidding software

Using software exclusively for Shopping campaigns generally means your campaigns are broken down extremely granularly. The algorithms will segment campaigns out by individual products.

This means, for example, if you have a product feed of 6,000 products – you will have 6,000 individual campaigns. But, isn’t a granular approach best when it comes to PPC so each campaign can be fully tailored? Yes and no. The problem with campaigns being broken down so individually like this means that Google’s smart bidding algorithm doesn’t build enough data to make informed decisions.

Smart bidding works best when a campaign generate between 20-40 conversions in a 30-day period. When you have campaigns with just one product in, you’ll potentially have thousands of campaigns which never build this amount of conversion data to be optimised effectively. We have seen this countless times as an agency when a brand comes to us and has been using bidding software, and it’s frustrating seeing the amount of budget wasted because there is so little data in each campaign.

Combining products into a fewer number of campaigns allows for increased conversion data, and therefore, improved bidding allocation. In essence, it allows smart bidding to work much better.

Why more data is the solution

I’m not saying don’t use bidding software – the answer isn’t a fully manual approach either, as mentioned this just wouldn’t be feasible across thousands, even hundreds of products – I don’t think you can fully advocate one way or the other as every business will have totally different needs.

However, what you do want to ensure, is that your campaigns are gathering enough data, as this is the only way you can really optimise them and make the best use of your budget.

One approach we find to be effective is grouping products together which have similar performance metrics, allowing us to create bidding strategies with similar targets which suit multiple product sets, allowing for linear growth.

The best approach is one that’s bespoke to your business; as dependent on your products, your market, the competition, the audience you’re targeting; you might want to categorise campaigns in different ways which make logical sense.

For example, sometimes we categorise campaigns around certain product styles, or website categories, or sometimes it’s based on performance or average order value. This way you can gather relevant data which makes sense to that set of variables and make adjustments accordingly.

Data really is key; and a big part of our approach is testing to see what works best. We might change categories and group campaigns in different ways if the data is telling us to, we might start with website categories but then see that it could work more effectively if we segment by products or price or return.

Putting your campaigns fully in the hands of external software, as they often work by segmenting products out individually, not by any other variable. You also wouldn’t know to make this kind of decision, because you wouldn’t have enough data available to make that call.

In summary, there is no one-size-fits-all with Shopping, it takes strategic expertise and a great deal of testing to find the right approach, and the right team to understand what approach works best for your brand and products. These are elements which can be limited by putting your campaigns exclusively through external software.

If you want to find out more about our approach and success with Shopping strategies, get in touch for a chat.

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