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Department Retailer Thinks Like an Investor to Hike Google Shopping Returns by 34%

THE SCOOP

A billion-dollar department retailer offers some 32,000-35,000 products through its e-commerce website and several hundred locations in the U.S. Its catalog includes mainly apparel and footwear, in addition to home goods, jewelry, and accessories. While the retailer’s Google Shopping revenue was growing rapidly, ROAS was well behind its goal. That’s why the retailer turned to Sidecar.

PROFILE

Retail Category
Department
Location
U.S.

The Problem

REVenue without roas

Google Shopping revenue was growing rapidly for a department retailer in 2015, outpacing text ad revenue growth five-fold. The retailer projected that Google Shopping, comprising 20% of its search spend at the time, could expand to half its budget in a couple years. But there was a problem: Return on ad spend (ROAS) trailed the retailer’s goal significantly.

“We found that our digital agency was spending money in Google Shopping mainly just to drive traffic, and some sales,” said the retailer’s marketing manager. “But there wasn’t much thought behind how to manage our budget more intelligently and generate greater return.”

The marketing manager realized ROI improvement required a totally new way of structuring campaigns and bidding products. He wanted to move beyond his current method, where products were grouped by category and type, and instead treat his catalog like a stock portfolio.

“Intelligent allocation of spend is critical to success in Google Shopping,” said the marketing manager. “You have to put the right amount of weight into each product, and continually adjust that weight to maintain your return goal. And technology can drive that.”

The marketing manager started researching the industry for fresh thinking on how to approach Google Shopping, and got acquainted with Sidecar and its technology while attending a conference.

“We didn’t know other people had radical ideas about how to manage Google Shopping, until we met Sidecar,” said the marketing manager. “Sidecar’s technology is based on bidding intelligently and investing in each product according to its predicted performance. It’s the perfect solution to our challenge.”

BY the Numbers

150k
SKUs
in catalog
27%
ROAS Boost
in 12 months YoY
44%
Revenue Growth
in 12 months YoY
19%
CPC Reduction
in 12 months YoY

The solution

Manage Investment, Not Just Bids

The retailer began working with Sidecar’s e-commerce team to define a new, investment-based Google Shopping strategy that would maximize ROAS while maintaining revenue growth. Central to this strategy is Sidecar for Google Shopping.

The technology analyzes multiple datasets to understand trends around product performance and consumer search behavior. The machine learning algorithms predict revenue opportunities from individual products, and capitalize on those opportunities to meet the retailer’s ROAS goal and maintain growth across other key metrics.

“We were blown away by Sidecar’s technology and the team’s sophistication with Google Shopping,” said the marketing manager. “Sixty days into our relationship, Sidecar’s technology was already 34% more productive per dollar than our agency.”

Another key aspect of Sidecar for Google Shopping for the retailer is its ability to understand the cross-device landscape, and invest spend in mobile and desktop ads separately.

“We were ignoring mobile traffic before working with Sidecar, because we didn’t have a good way to manage it,” said the marketing manager. “Sidecar’s technology treats mobile and desktop as it should—totally different landscapes with unique investment strategies for each product.”

And nothing is static about the retailer’s approach to Google Shopping. Similar to most retail organizations, the company’s products fluctuate in price, demand, and margin, depending on promotions, seasonality, and search behavior. Sidecar continually learns and adapts to real-time trends impacting the retailer’s catalog, making over 40,000 bid changes in 2016 to drive ongoing revenue and ROAS improvement. 
Sixty days into our relationship, Sidecar was already 34% more productive per dollar than our agency.
Marketing Manager
Billion-Dollar Department Retailer

the results

consistently improving returns

The retailer’s marketing manager sums up the biggest benefits Sidecar is delivering: “Sidecar gives us more predictable results with a higher return on ad spend, and saves us a lot of time managing the channel.”

The retailer has seen growth across many critical metrics since implementing Sidecar. Year-over-year improvements for 2016 include: impressions (+46%), clicks (+39%), orders (+55%), revenue (+44%), ROAS (+27%), conversion rate (+12%), and average CPC (-19%).

“I didn’t expect the drop in CPC to be so significant,” said the marketing manager. “It just goes to show how much room for improvement we had.”

With Sidecar’s mobile intelligence, mobile Google Shopping ads converted 51% better in 2016 year over year. Revenue from mobile Google Shopping ads grew by 227% while ROAS nearly doubled.

“Google Shopping is one of our fastest growing paid search channels, continuing to beat text ads and some other marketing programs we have in place,” said the marketing manager. 

MOBILE IMPACT

51%
Conversion Rate Boost
in 12 months YoY
92%
ROAS Improvement
in 12 months YoY
227%
Revenue Growth
in 12 months YoY

moving forward

expanding the strategy

With these results, the marketing manager has increased his spend in Google Shopping because he knows he’s “not going to get burned.” He continued: “Sidecar enables us to expand our investment in Google Shopping in a way that is palatable, because the return makes sense.”

The retailer also implemented Sidecar for Bing Shopping to drive additional paid search revenue. During the retailer’s busy season of late September through January, Bing revenue grew by 57% year over year and ROAS improved by 56% year over year.

The retailer is working Sidecar to set the bar even higher. Sidecar’s e-commerce team has recently implemented a margin-based bidding approach in Google Shopping to drive increased profitability for each product.

Campaigns are now based on margin and have a fine-tuned ROAS goal appropriate for every product in a given campaign. Sidecar for Google Shopping will continue to learn performance trends and capitalize on opportunities for individual products to generate revenue and save spend.

“Our maturity with Google Shopping has grown over time, and Sidecar has been right there to enable that maturity,” said the marketing manager. “I’m continually impressed by Sidecar, and I’m confident the technology and team behind it will continue to keep our e-commerce strategy well ahead of the pack.” 

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