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Discussion in 'Ecommerce Forum' started by wayzgoose, Sep 3, 2019.
As title, do the increases over the standard bid work or is it money making for Google?
Of course everything is designed to earn more money for Google.
Enhanced bidding is designed to take advantage of additional opportunities to increase sales. Whilst Google's algorithm is incredibly smart (and rigged) you need to ensure that you are maintaining your profit margins. The enhanced bidding can jack up the price to 30% more so, if you are selling a low-cost item you will probably lose you profit on that item, and may even sell at a loss. You need to test it to see if it works for your product and your business really. There is no yes or no answer.
Of course, like any marketing campaign, you need to give it a long-term view. Adwords is a part of the puzzle and should be viewed as an acquisition tool. For example, if you sell a product to someone via Adwords at a low margin, then you need to make sure you sell more to them and drive more profit once they are a customer.
With the high cost of Adwords and FB/Insta ads these days, you should totally focused on creating long-term customers rather than just getting a quick sale. It's much easier to convert sales and drive higher spend from existing customers because;
They know you
They trust you
They already use and like your product
Lack of attention to loyalty is where most businesses go wrong.
They capture the first sale and then neglect the customer from then on. They ad them to a mailing list but there's no real loyalty marketing going on. If you create a loyalty/retention campaign then you will find that ALL of your marketing will deliver a better return on investment and you will have happier customers.
Hope that helps.
We found that the enhanced CPC did help but only on items which were getting quite a few clicks anyway. However, the best advice we were given was to split our products by value/profit and that way we could always control what group we were prepared to bid more on i.e. for an item selling with 50p profit our max mid was 10p but we were happy to bid more for an item where our profit was £10.00.
By splitting them we could monitor much better and then you can test it and see what works best for you.