le Shopping profit tracking: three advanced strategies for margin-based tracking

Are you getting the most out of your Google Shopping campaign?

You can make better decisions by tracking your PPC results.

Implementing advanced tracking techniques and margin-based structures will allow you to unlock more data than just basic revenue metrics.

This article outlines three ways to structure campaigns and track profitability.

1. Profitability-based Account Structures

Margin-based or inventory-based structure is the fastest and easiest way to get started.

Three key concepts are central to the work.

• Product profitability.
• Stock status
• Campaign segmentation.

Google Ads’ profitability is driven by these elements.

Product profitability

Knowing the profitability of each product will help you prioritize your efforts and budgets.

Start by analyzing your cost of goods (COGS), and then factoring in any other costs such as production, packaging, and shipping.

By transferring the COGS (cost of goods sold) or product margin to a custom label, you can segment Performance Max campaigns into clusters based on margin.

Inventory Status

To make the inventory useful, it should be grouped by priority or status of inventory on a scale such as low, medium or higher.

Campaign segmentation

The final step to creating margin-based structures is segmenting your Performance Max campaign based on the profitability of products and stock status.

Now you can:

• Create a custom label based on the product’s profitability and stock.
• Use them individually and create campaigns such as “high margin-high inventory status” to promote certain products.

Segmentation allows you to apply different bid strategies and budgets for each group, and allocate resources to where they will produce the highest return.

Google calls this “Shopping for Business Objectives.”

This should theoretically lead to successful campaigns, as the bid strategy can be focused on one specific goal that should work for all products within that cluster.

It is a great tool for advertisers who have simple product structures and few margin clusters. However, there are some flaws.

You can’t see which products people bought and how much profit they made because the margins are all thrown into one basket.

This is a good strategy for beginners, but it should be enhanced to gain more leverage.

2. Cart data can be used to track cost of goods sold and convert them.

Google Ads has many features that are often overlooked.

COGS is a value that you can pass to the Merchant Center when using the datafeed.

The attribute [cost_of_goods_sold] is the cost price of the product and must be specified in a monetary amount (not as a percentage).

As the price of a product can vary more rapidly depending on its industry, it is best to start with a rough guideline.

Some companies may also store their COGS in the shop backend.

The ideal way to export these values is dynamically into the feed management software of your choice. If automation is not possible, you can begin with a simple static export.

You could, for example, create a Google Sheet sub-feed.

Fill in the cost of goods [cost_of_goods_sold] and item id (id) in the first columns, and import the feed as a supplement into Merchant Center.

By implementing COGS into the product data and cart reporting , you can also use additional metrics such as gross profit (COGS), product gross profit etc. These are an excellent addition to the revenue pixel, which is what most advertisers optimize for.

It might seem a little complex from a technical standpoint. All variables are available in the analytics dataLayer, and they can be easily used with a Google Tag Manager setup.

3. Custom margin tracking

The most complex and advanced solution is to set up a dedicated Pixel and use custom margin tracking.

Some tools are integrated with shop systems. However, setting up your tracking system offers customization and independence.

If you are looking for an easy and quick solution, then profitability tracking software might do the trick.

For internal reporting, many shop systems allow you to set the COGS (cost of goods sold) or item cost. You can enter the value in the data layer to be used for conversion tracking.

Shopify, for example, allows you to create metafields that you can use to determine the COGS at a product-level.

Here’s an example of a metafield that captures the cost of a product.

Shopify lets us read the metafield values on the storefront. We can then use this value to send it to the dataLayer.

The specific code will depend on the dataLayer.

Here is a sample of data we could use when using the dataLayer.pushcommand

You can use it in a different way.

Now we can calculate our profit by using a JavaScript snippet, or in any other manner depending on technical conditions.

var costOfGoodsSold = custom.cost_of_goods_sold; var revenue = revenue; // Calculate profit var profit = revenue - costOfGoodsSold; console.log(profit);

The GTAG allows us to track only the profits from our marketing activities by using the profit variable.

Tip : This setup increases the possibility of competitors spying on your dataLayer.

You can address this by adding a percentage of gross profit.

It is easier to manage your bid strategies when you can hide the cost data of competitors.

You could, for example, factor a $20 gross profit from a $100 purchase by 5, and then report a $100 total order.

You can easily calculate your true gross profit if you are familiar with the 5 factor.

Profit-driven strategies for better advertising ROI

Google Ads’ profitability-based tracking provides advanced insights on campaign and product performance.

There’s a solution to every problem, whether it’s using COGS tracking or custom margin tracking pixels.

The standard GTAG pixels and revenue tracking is not enough to make data-driven decisions.

You can:

• Identify high-profit opportunities.
• Budgeting and bidding strategies should be optimized.
• Maximize the overall profitability of your campaign.

Use margin-based tracking for your ecommerce business.

The post Margin based tracking: Three advanced strategies for Google Shopping profitability appeared initially on Search Engine land.