Paid Shopping Strategy Improves Plan Pacing by 25% and ROAS by 28%

By implementing a performance-based product bucketing strategy, our paid search team increased Return on Ad Spend (ROAS) 28%, improving overall performance for our client. 

Industry: Luxury retail

Solution: Performance-Based Bucketing Strategy

The Challenge: Our client faced difficulties in managing their PPC campaigns effectively due to Google’s algorithmic control over product serving, which did not consider product performance and resulted in inefficient ad spending.

“We were pacing 10% under goal. Implementing this strategy drove a 28% ROAS increase, which helped us grow to 15% above goal.” Natasha Brandt, Paid Director for Eyeful Media.



Finding & Results


Product Labeling Definitions & Strategy:

  1. Hero:

    • Represents 10-15% of products that generate 75%+ of sales.

    • These products exceed ROAS targets ($2.50+ for our client).

    • Allocating a higher budget to this category boosts revenue above ROAS targets.

  2. Sidekick:

    • Products with good potential but low search volume.

    • Perform at 70%-99% of ROAS targets ($1.75 - $2.49 forour client).

    • Included in the Hero campaign due to their small number.

  3. Villain:

    • Products that cannibalize spend when grouped together.

    • Perform below 70% of ROAS targets (≤ $1.75 for our client).

    • Placed in a separate campaign with strict ROAS targets and a smaller budget.

  4. Zombie:

    • Comprises 60%+ of products with little to no clicks/impressions.

    • Given their own campaign to build product history and performance.

How Labeling Strategy Was Executed:

  • Campaigns were restructured using the last 30 days, the same quarter of the previous year, and sale period performance data to categorize products.

  • Products move between campaigns based on performance, allowing dynamic budget allocation to maximize ROAS.


Pre & Post Shopping Restructure Performance:

Jan 1, 2023 - Feb 19, 2023 ROAS:

ROAS

 
 

Jan 1, 2024 - Feb 19, 2024 ROAS:

ROAS

 
 



Summary: This paid search bucketing strategy helped us improve ROAS from $2.25 to $2.89 for an increase of 28%. The bucketing also allowed us to reinvest underperforming ad dollars. We had initially invested 48% of spend in villain and reallocated to invest 28% in zombie. This campaign is inspired by ProductHero’s hero, sidekick, villain and zombie strategy.



What is Performance-Based Bucketing for Google Shopping?

Hero/Sidekick/Villain/Zombie bucketing was created as an advanced shopping structure that allows PPC managers the ability to segment products between campaigns based on past performance. When products are bucketed together by price, category, etc. then the Google algorithm has all the control over what products to serve and it doesn’t take into consideration product performance, only spending ad dollars to achieve ROAS (return on ad spend) targets.

Product Labeling Definitions & Strategy

  • Hero

    • Typically a small percentage of products (10-15%) that generate 75%+ of sales

    • These products hit and/or exceed ROAS targets (for our client that is $2.50)

    • Breaking Heros into their own campaign allows for more budget to support this bucket of products and gives the ability for increased revenue above ROAS targets 

  • Sidekick

    • A smaller subset of products that show good potential but generate low search volume when bucketed with all products

    • These products perform at 70% - 99% of ROAS targets ($1.75 - $2.49 for our client)

    • We bucket these into our Hero campaign due to the small number of products that typically fall within this label

  • Villain

    • These products cannibalize spend when lumped together within a single campaign

    • Performance is -70% ROAS targets ($1.75 or less for our client)

    • Placing these products into their own campaign with tight ROAS targets and a smaller budget allows products a better opportunity to achieve KPIs in a controlled manner

  • Zombie

    • Typically 60%+ of products are in this bucket

    • These products generate little to no clicks/impressions

    • Bucketing these into their own campaign allows them a chance to serve in the auction and gain product history and performance


How labeling works:

When we first restructured the campaigns using this strategy, we pulled the last 30 days, the same quarter of the previous year and sale period performance to determine typical, seasonal and peak performance for each product before labeling them into each bucket.  

From there, we let product performance determine where it falls within the structure. All products move in and out of all of the campaigns based on their recent performance. A product that is a Villain today may do really well during a sale or change in seasons, once that product hits above the 70% ROAS target, it moves into the Hero/Sidekick campaign to be supported with more budget, then once it begins to dip, it flows back into the control campaign. 

It’s incredibly important to keep in mind that products do not go to a bucket and stay there forever -they move around based on results.

If your shopping campaigns aren’t performing as well as you’d like, please contact us.

Antonella P.