A Video Audit. What is it? We film ourselves going into someone’s Google Ads account and point out all the big opportunities for improvement. Every single time we do an audit we ALWAYS find some golden nuggets that can make some big differences in the account. Over the long run these edits can rack up thousands of dollars in extra profit. This is just what happens when you’ve seen and worked with 100s of different accounts in the Ecommerce niche.
In this case here, Dilhan got in touch with us asking for an audit of his Google Ads account that he’d set up himself. He wanted some expert eyes over the account and strategy to see what he could be doing better.
We watched how our recommendations helped his account.
And here they are:
- We increased profitability by 282%
- We increased volume of conversions by 82%
- We increased revenue by 103%
- We reduced their average cost per conversion by 64%
Ok, hold up cowboy. That’s insane. Rather than leaving you in the dark, we’ll show you the exact video of the audit and a full breakdown (in epic detail) of the exact changes we made to get him these results.
Here’s a before and after comparison:
Though, the problem with this data is that you can’t really interpret it properly because it doesn’t show the date ranges. Let’s break it down to a daily average so it is comparable between the two.
So we basically turned this account around in every positive way possible. We reduced the average cost per conversion, increased the volume of conversions, and transformed the account from a loss maker into a daily profit maker. Though it’s not making thousands of dollars right now, it shows what can be done with an existing account with the proper calculations and adjustments. This same process can be easily scaled up on the larger level, either by applying the same edits to other campaigns, or through increasing the budget.
The Video Audit
Ok, so that’s enough tooting our own horn over how amazing we did. You want to see the audit and changes in action right? Without further ado, here’s the video:
Here’s the video of our audit:
Summary of the Recommendations
Not everyone has time for 17 minutes. Here’s a quick summary of what we recommended:
Search campaign recommendations:
- Campaign settings – keep campaigns advertising on just the search network
- Campaign settings – make sure you only show ads actually in your targeted geographic location (don’t use Google’s default recommendation)
- Change the bidding strategy from maximise clicks to manual bidding so you have more control and can calculate your max CPCs based on keyword performance
- Expand and separate ad groups to take advantage of the ability to granularise on the keyword/ad level
- Mine out the best performing keywords and create a campaign with a dedicated budget for those keywords that has a budget high enough to show for all impressions each day. This allows you to allocate a set budget to what’s working the absolute best and is generating the most profit.
- Add negative keywords from the search terms report that don’t convert (or you can easily tell will never convert)
- Change the URLs of the ads so you send users to pages relevant to the search they made (e.g. send people searching for glow lights to the glow lights product page rather than just the home page)
- Improve quality scores to pay less per click (and reduce cost per conversion)
- Change keyword match types to improve quality scores (but watch the results and test)
Shopping campaign recommendations:
- Change from maximise clicks to manual bidding
- Setup manual feed in Google Sheets so you can optimise the titles and descriptions
- Edit bids manually on the product level
What was actually done
Dilhan saw the audit but didn’t have the time or energy to implement all those recommendations himself. He asked us to just spend 1 hour implementing the most effective ones and seeing the results. We obliged.
Where did we focus our energy?
We focused on the Google Shopping campaign.
- When properly managed, Google shopping can be INCREDIBLY powerful for ecommerce stores.
- Their shopping campaign was already performing at break-even with minimal management. So we took it and rocketed it into profitability.
What (did you do)?
It’s actually quite simple:
We worked out the most we were willing to pay per new customer and then used past data to work out how much we should pay per click, for each product.
How did we do this? Ok, here are the steps:
Before the steps:
- We paused the search campaign
- We changed the shopping campaign’s bidding method from Maximize Clicks to Manual Bidding
Shopping campaigns are incredibly powerful when properly managed. Many managers will just set them up and let them run, leaving them to the fate of Google and the market. What many people fail to realise is that while you can’t control the exact searches you show for (though, you can do your best by optimising the feed but that’s for another case study), you can control bidding on the product level. You can use simple math to work out your max cost per click and apply these on the product level to reach a level of profitability.
So let’s go through how we did this:
1. We exported the data for the Google Shopping campaign, at the product level.
We exported the following columns:
- Average CPC
- Conversion Value
This results in a set of data like this:
2. We calculated new Max Cost Per Click metrics for each individual product based on it’s past performance.
Here are the new columns we added in these columns (along with the formula for each):
Clicks Until Conversion
Clicks / Conversions
This is, based on past performance, how many clicks on average it takes until a new conversion occurs.
Average Conversion Value
Conversion Value / Conversions
This is the average sale value. Often people buy multiple products or may apply a discount so don’t use the product price, use this formula to calculate the average order value when people convert from clicking this product.
Max CPA (profit per sale)
Average Conversion value * profit margin
Max Cost Per Acquisition. This tells us the most we are willing to pay for each conversion to remain profitable.
New Max CPC
Max CPA (profit per sale) / Clicks until conversion
New Max Cost Per Click. Based on the average amount of clicks we need before a conversion occurs, we can work out the most we are willing to pay per click.
Profit Margin? Yep, that’s a crucial value that you’ll need to know for this whole thing to work. Basically, we want to work out how much profit you make per conversion. There are a bunch of ways you can calculate this. You can get a general figure, or you can get your hands dirty and work it out on a per product level.
Not sure of your profit margin?
Profit = Revenue – expenses – cost of goods sold.
That’s going to give you an average for your entire business. You can use this in our calculations but keep in mind it will be even more accurate if you do this on the product level (because often each product’s cost of goods sold will be different).
Plug all these formulas in for the first product and drag the formula down for each consecutive product to also calculate the values for them too.
Now, interestingly you’ll see a vast variance between the new Max CPCs for each product. Even if their Max CPA might be similar, different products, in past performance, have converted at different rates so just trying to eyeball your max cpc for each product based on just your Max CPA is futile. It doesn’t take into account how well each product converts individually.
Because of this, we now have our New Max CPC which relies on the profitability of each product, and how each product has actually converted in the past.
We take this data, and go into Google Shopping, go into your ad group and separate products out by Product ID. This allows us to bid on the product-level.
3. Go into your Google Shopping Campaign and apply your newly calculated Max CPCs for each respective product.
After making our edits we left the account and watched the performance for a few weeks.
What you can expect to see:
- Your average cost per click will change (often decrease if you had set your max CPCs too high previously)
- You will see your average cost per conversion change (if you saw your average CPC reduce then you will likely see a reduction in your average cost per conversion).
- You may see a big drop in your volume of traffic or a big increase. Why the variance? because if your budget had limited the number of clicks you received per day, then by decreasing the average CPC you can get more clicks for the same budget, as long as there are more searches out there. If you receive less clicks, it’s likely because your budget was already allowing you to show for all searches on the market. By decreasing your max CPC you decrease your average position in the search results which will naturally result in a lower percentage of people clicking your ads. This isn’t necessarily a bad thing if you are focused on the actual profits. So therefore, you might see a drop in volume but an increase in overall profits generated.
If you have any questions or would you like your own Google Ads audit Get in touch with us on our contact page.