Next step: What to do after setting up your Product segmentation labels?

What are the next steps after segmenting your products? With the Producthero Labelizer, you are able to automatically segment your products based on performance. This enables you to set the right budget for the products that deserve it. But what should you do next to optimize your Shopping Ad campaigns if they are running for a while? That’s what we’ll dive into in this article.

Labelizer is an Always-On strategy

Remember that segmenting your products based on performance is an always-on strategy. That being said, you don’t necessarily have to adjust it each month. Once you have optimized it you can keep it running. For example, if you have your Villains (products that don’t convert) in a separate campaign, it will automatically bid less on those. You don’t want to change this each month as you need the data to run the campaigns efficiently.

So, what can you do to optimize your campaigns?

Step 1: Optimize your product segmentation

Once you set up the Labelizer, the first thing that you want to do is create a good balance for your product segmentation. How to find a good balance depends on many factors such as your industry, product types, your goals, and seasonality.

We do give a piece of general advice below, however, while working with different customers we suggest different thresholds:

Villains: As these products ‘steal’ your ad budget you want to reduce this group to around 20% of your advertising costs. There are multiple ways to do this, and you can combine them.

How do you reduce the cost of Villains?
1. You lower the ad budget for the Villain campaign in Google Ads.
2. Within Producthero you increase the Producthero Target ROAS. This will help to increase the number of products in your Villains group which lowers your budget per product.

Zombies: These products are sleeping, nobody sees them and that is why you want to wake them up and show them to the world. However, as they don’t perform yet you don’t want to put too much ad budget on these products. We suggest aiming for 20% of the total costs.

However, if you want to generate more revenue, then it might be more logical to have a higher percentage compared to your villains.

Heroes: These products are your best-sellers. Logically, you want to spend most of your budget on the products in this group. These products should get the top positions within Google Shopping.

How do you use the data from the Labelizer?

Using the information above you can check if there are chances to optimize your product segmentation with the Producthero Labelizer. In the screenshot below you see that a large part of your advertising costs goes to your Villains and Zombies, this is something that you want to change.

You can also see that a huge part of the conversion value comes from your heroes. That is why you want to shift a part of your advertising budget from the Villains and Zombies to your Heroes.

Don’t forget, if you make budget adjustments it’s crucial to monitor both the campaign and the total results of your shopping campaigns. In this article we describe how you can measure the optimal ROAS but also the profit of your campaigns.

Step 2: Optimize your short product titles

For merchants with many products, it is impossible to optimize all your titles. However, if you want to continue your optimizations, one way to do this is to optimize your product titles. Using Producthero you can choose to optimize titles that are short but generate revenue. You can even select your heroes with a short title to make sure they show up for even more relevant searches. By doing this you can increase their relevance, leading to more visibility, clicks, and eventually conversions. Learn how to optimize your product titles in this article.

Step 3: Monitor competitor pricing

One way to optimize your ad spend is by monitoring the prices of competitors. For example, if you notice that one of your Villains gets a promotion making it cheaper compared to your competitors, then you might want to add it to a Boost campaign to generate data and to decide if it qualifies as a Hero. Learn how you can use Price Monitoring Solutions to improve your Shopping Ads.

Creating segments in the Labelizer

If you have sufficient product data, then you can create product segments within the Labelizer. Here are some examples of when to use this:

You can create segments based on margin data. This is particularly useful if you want to segment product groups based on margin. For example, if you sell socks they might have a high margin while the jeans that you sell have low margins. In this case, you want to set a different target ROAS on the product groups, and to achieve this, you can create segments in the Labelizer.
You can also set different ROAS targets for product groups if you don’t want to include all your products in Labelizer campaigns. For example, if you want to completely exclude a product because it’s a seasonal product.

When should you make changes to the Labelizer (campaigns)?

There are moments in which you should make adjustments for your Labelizer campaigns within Producthero. So, here is a list to help you in monitoring if you should adjust your Producthero Target ROAS or click threshold:

After adjusting the target ROAS in your Shopping Ads / pMax campaigns
After increasing or decreasing the budget of your Shopping Ads / pMax campaigns
After your average ROAS changes
When there is a high or low season in your market
At big assortment changes
When problems occur with conversion tracking in your Google Ads account

Learn more about optimizing your Google Shopping Ads

As you can see above, the Producthero Labelizer is an always-on-strategy. However, there are still more elements of your campaigns that you can improve. Using Producthero you have an overview of the most important elements of your shopping campaign. To stay up-to-date on more tips and tricks to boost your Google Shopping Ads. Subscribe to our YouTube channel or newsletter.

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