Applying CPA Bidding to Product Listing Ads – PPC Tuesday

TOPICSProduct Ads


This week, I am excited to announce that this video is the result of viewer feedback. I am going to answer their specific questions to setup the appropriate conversion tracking to use CPA bidding for Product Listing ads.

As devoted followers of PPC Tuesday may remember, about a month ago I reviewed Google Product Listing Ads (& Product Extensions). To keep the material light, we did not cover Cost Per Acquisition bidding, sticking to the more well-known Cost Per Click.

CPA bidding means you only pay when there is a sale, but the payout is much higher, usually a percentage of the actual order. If you get 100 clicks, and 1 sale, you are only charged once. Whereas, with CPC bidding, you will pay 100 times, for the traffic sent, and keep all of the revenue generated.

This presentation is going to dive into some advanced PPC – or maybe we should call it PPA – techniques.

Before we get into the conversion code, there are some very specific best practices that Google has shared for CPA bidding in relation to Product Listing ads that should be taken into account. You should have a sound hierarchal Product Feed structure and knowledge of the different values your shopping cart passes and their specific names.

In terms of the setup, Google advises that all CPA-PLAs are in one account. This can prevent being charged twice for the same sale. They also suggest setting up separate campaigns for these targets. If your other campaigns are CPC, unique campaigns need to be setup. When deciding whether to go down the road of CPA bidding, you need to determine if there is going to be one blanket commission schedule for all of the products you are targeting, or if you would like different schedules based upon the products, they will have to be segmented into unique ad groups.

In terms of incorporating your product feed from Google Merchant Center into AdWords, you can define the segments with the attribute: adwords_grouping. You can also use filters to only target the best products in each segment. Each segment should contain more than 1 product to make sure you get enough exposure and have a mix.

After you watch this video, go through all of the steps, be sure to test your conversion code, so that it is accurately pulling all of the information. Also, you will want to make sure any revenue values you are measuring are at the Sub-Total level, not the Order Total. This will ensure you are not paying commission on Taxes and Shipping Charges. You can also use existing URL Parameters in your Feed’s Product URLs to have more insight, via Analytics, in how the advertising and traffic is performing.

Finally, you want to review and optimize the different metrics that are produced. Since these CPA ads are being served alongside CPC ads, there needs to be a common metric to rank the ads, this is called, conveniently enough – Ad Rank. For CPC, ad rank equals Quality Score times Bid. For CPA it is a bit more complex.

Here we see it as a function of Bid, Performance, & what Google expects the Order Amount to be. The first 2 are pretty cut and dry, drive Click Thru Rates & Conversions or raise bids. The last one is interesting, its not the product value, but the order value, so cross selling and onsite conversion efforts can help you place better (and in some instances lower your bids similar to a good Quality Score).

So there is the background information for CPA-PLAs. Now lets look at the setup, first with your feed in Google Merchant Center. As I mentioned, if you are going to use different commission schedules, you will need to segment your products accordingly with the attribute adwords_grouping.

You will then need to substantially modify your conversion code to pass all of the information necessary to Google so they can bill you. The first conversion parameters here are a the basic pieces of information found in default conversions and are all required. These include the ID (automatically assigned when you create the conversion) the language, format, color, and what you name it.

The next set of parameters get a little more complex and need to modified or added in manually. The conversion value, one of the cornerstones of our Profitable PPC program, should be a variable, so it pulls whatever the Order Sub Total may be at the point of the conversion. You will then need to define the Order ID, & the really advanced set of data the Converting Items. This includes the value of each item, the quantity of each, the product id, the segmentation, and as an option the SKU (great for tracking the commissions and reconciling your advertising efforts).

Google also lists out Notes & Guidelines for the conversion tracking, including:
All parameters must be URL encoded so they will not break, and the variables should be kept under 30 characters. As previously mentioned you need to setup the google_adwords attribute in your feed and then set specific bids in Adwords. All of the parameters should be repeated in the no-script URL in case the user does not have Java enabled. And all values need to use the same currency that is defined in AdWords.

So, with all of that cleared away, lets take a quick look at some sample code.

Here we can see a normal piece of Google code with the modified sections highlighted in red, note the conversion items in yellow & orange, and including the same information in the No-Script URL.