Last updated on May 30, 2023
Thoughts on Performance Max for Retail
Not so long ago it was the job of a performance marketeer to set up advertisement campaigns and tweak the bids, channels and other settings in the Google Ads system. But with the release of Performance Max you get a tool to support your efforts, giving you more time to focus on the actual ad input and output of campaigns. In this article we will explain how Performance Max can help you and how we suggest using it.
The old way of running Shopping Ads
As you can see in the figure below, for each shopping phase there are different channels that are used. In almost every team that we meet, there is a differentiation between the channels. Most often there are people specialized in the Awareness phase, running YouTube and Display ads, who are more focussed on building the brands image. While there are other people who specialize in getting the best possible ROAS in the Consideration and Purchase phase from the non-brand and brand Shopping Ads.
The goal for all these channels and phases is different. In the Loyalty phase the goal is to get as many impressions as possible against the lowest cost. This resulted in testing how low you can set the bids while maintaining the highest impression share as possible. For example, for a brand that doesn’t have resellers, they would try to get an impression share of 95% while lowering the costs on exact brand terms.
In the Purchase and Consideration phase the goal is focussed on getting a good ROAS to get the highest revenue or gains. Usually, marketing departments first focus on getting a good ROAS and conversions before putting budget in the YouTube and Display ads. As the higher the volume, the lower the conversion rate. And the lower the conversion rate, the higher is the cost per conversion.
What changes with Performance Max for retail?
With Performance Max you are able to manage all channels in one campaign. Google will manage your budget and focus on getting the highest possible returns. That being said, Performance Max works just like a Performance marketeer. If you put in a lower budget, it will solely focus on getting conversions in the Purchase and Consideration phase. While if you give it more budget, it will also target the Awareness phase and use YouTube and Display ads. So, the higher the budget, the higher it will target the funnel and the more data it will get to optimize your campaigns.
Should you just put everything in one Performance Max campaign?
Currently, we advise our customers to still use multiple campaign types. And also to create multiple Performance Max campaigns. However, this also depends on many factors like your team size, level of knowledge, your goals and time to manage campaigns.
We categorized our approaches in three different setups:
Easy setup: Performance max only
With an Easy setup you would only use one Performance Max Campaign. This would include all your shopping, search, display, etc.. This is easy to both setup and maintain, however, it would reduce your control.
Medium setup: Separate Shopping
Here you would separate the campaigns that focus on the Consideration and Purchase phase and one for the Awareness phase. In the Awareness phase you can use pMax with assets, without linking it to your merchant center.
Next to this, you’ll create Performance Max campaigns for your products in your Merchant Center. Or even better, you can use Producthero PRO to create a pMax campaign segmenting products based on their performance. For example, you create a campaign for your Heroes (the 10% of your products that generate 80% of your revenue) and a campaign for your Villains (the products that underperform). This will allow you to set the right budgets for your campaigns and to adjust them when a product moves from a villain to a hero status or vice versa. This setup gives you more control but still relies fully on Google’s algorithms.
Advanced setup: Hybrid campaigns
In the third setup you have the best control on your campaigns while enjoying the benefits of Performance Max. However, this setup is more complicated and requires more maintenance. Additionally to the medium setup, you will also add Search Ads for the all phases and Standard Shopping campaigns for all products as a catch-all with manual bids. If the advanced setup is right for you also depends on how many conversions your campaigns get and what the size of your budget is. If a campaign has too little budget, it will also not get enough data for Google’s algorithm to optimize your campaigns.
Don’t forget to split Brand vs Non-Brand in Performance Max
While this is common practice for Shopping ad campaigns, still a lot of people forget to exclude their brand terms from their PMax campaigns. At the time of writing this is not possible in the interface, however, it is possible to exclude search terms in Perfomance Max if you contact Google support.
Want to discover your Heroes and Villains?
With Producthero PRO you can discover which products fall into which category. This will help you to prevent spending your ad budget on products that never sell. You can try Producthero PRO for free using a 30 day trial.