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SHOPPING CAMPAIGNS

TRANSIT ION PLAYBOOK

Published June 19th, 2014

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Table of Contents

The Evolution of Product Listing Ads 3

What’s New in Google Shopping Campaigns? 3

Product Inventory Visible in AdWords 3

Custom Labels 3

Product Groups 4

Inventory Filters 5

Campaign Priority Settings 5

Tools for Greater Insights 5

Planning for Your Transition 6

Preparation 6

Structure & Creation 6

Launch & Timing 8

Transition Checklist 8

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The Evolution of Product Listing AdsProduct Listing Ads (PLAs) have become a large part of paid search programs since they were introduced as a part of Google Shopping in October of 2012 During the 2013 holiday shopping season, global retail PLA spend increased 138% YoY underscoring the importance of this ad type

In the most recent Jefferies Equity Research report, Kenshoo was identified as serving more PLAs than any other platform or advertiser We attribute this success to our clients, including some of the biggest names in retail, activating our industry-leading PLA support

By the end of August 2014, Google will require that all PLAs be trafficked through Google Shopping campaigns – a new way to manage PLAs now This means that retail advertisers should begin preparing to transition to Shopping campaigns This guide will cover the new features available in Google Shopping campaigns and things advertisers should consider when planning to launch this campaign type

In May, Kenshoo’s Shopping campaigns support was made available for a few initial customers Throughout June and July, all Kenshoo client accounts will be enabled with the same level of functionality for Google Shopping as enjoyed with our industry-leading PLA offering today Later this summer, we will be adding further advanced capabilities such as portfolio bid optimization and more

What’s New in Google Shopping Campaigns?Before you begin creating a transition plan, you should familiarize yourself with what changes Google Shopping campaigns have brought that will affect how you structure and manage your PLAs moving forward

Product Inventory Visible in AdWordsProduct data is now available within AdWords instead of only in the Google Merchant Center The ability to view your products directly in AdWords simplifies the process of structuring your Shopping campaigns

Custom LabelsIn addition to AdWords labels, you can leverage custom labels to classify products in your feed in ways that make sense to your business Example use cases could include labels that indicate seasonality, promotions, or product performance These labels can then be used for monitoring, reporting and bidding

Custom Label

Your Definition

Your Choice of Possible Values

custom label 0 Season Winter, Spring, Summer, Fall

custom label 1 Selling Rate BestSeller, LowSeller

custom label 2 Clearance Clearancecustom label 3 Margin LowMargin,

HighMargincustom label 4 Release Year 1900 to 2100

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Product GroupsWithin Google Shopping campaigns, product groups replace product targets as the PLA biddable entity You are able to subdivide product inventory based on attributes from your product feed to create product groups Multiple subdivisions (up to seven) can be used to create more granular targeting groups For example, the top layer division could be by lines of product – Apparel & Accessories, Shoes and Purses – and another attribute from the feed (brand) could then be used to further subdivide these products by brand type This method of subdividing to create product groups prevents overlap in bidding for the same product in multiple places

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!Inventory Filters

Shopping campaigns can have inventory filters applied to them to limit the products that will appear for PLAs For example, if a feed contains products in clothing, shoes and accessories, you could choose to filter out shoes and accessories to create a clothing only campaign You can also accomplish the same thing by sub-dividing your product groups by category and excluding the shoes and accessories product groups (by setting the bid for these product groups to ‘exclude’)

Campaign Priority SettingsIf you have multiple Shopping campaigns advertising the same product, you may want to consider using the new campaigns priority setting Setting a campaign to be “high priority” will cause a PLA to be served from that campaign as opposed to another campaign with a “low priority” setting This allows you to choose which campaign, and subsequently which bid, will serve a PLA

Tools for Greater InsightsRetailers managing PLAs through Kenshoo have had the ability to access product-level reporting to fine tune their PLA campaigns for almost a year and a half We are happy to see Google Shopping campaigns give marketers access to product-level performance reporting where before product-level performance was only possible if a product target was created for each individual product

With Google Shopping campaigns, you can view benchmarking data for the average click-through rate (CTR) and max cost-per-click (CPC) for product groups This information helps you understand the PLA competitive landscape and where more or less aggressive bid strategies can be applied A bid simulator tool also helps estimate the change in impression volume based on adjusting the bids

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PreparationWhether you are new to PLAs or just moving over to Shopping campaigns, now is the time to make sure your feed is well-optimized When optimizing a product feed, it is important to put yourself in the shoes of a consumer What types of search queries would he or she use? Your feed may include ‘plum colored rainboots’,

but would ‘purple rainboots’ be more relevant to consumers? What type of product descriptions or promotional messaging would resonate most? What sort of product images will make you stand out from your competition?

Optimizing your feed with the consumer in mind is important since PLAs are not triggered by keywords you bid on and there is limited ad copy to help drive a consumer to click Working with a feed management provider that can help incorporate this search intent into your feed can be valuable Kenshoo is compatible with any feed management provider, or if you prefer an end-to-end solution, Kenshoo partners with DataPop for holistic PLA optimization It is very important to track PLA performance so you can continue to optimize and drive revenue efficiently Understanding PLA performance in the context of text ads, social ads, or any other managed channels is extremely valuable Kenshoo clients are able to report on PLAs alongside other SEM ad types as well as other channels They can also apply attribution policies that cut across these channels to better inform bid optimization efforts

Additionally, Kenshoo can help advertisers translate their PLA successes into wins on Facebook with Demand-Driven Campaigns Demand-Driven Campaigns allow you to automatically create Facebook Ads on top performing products so you can efficiently increase your revenue from social

Planning for Your TransitionThere are three main areas you should be considering as you create your transition plan for Google Shopping campaigns: preparation, structure & creation, and launch

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Structure & CreationIt is important to note that the best structure varies advertiser by advertiser, but there are certain principles that should be followed when determining a Shopping campaign structure These principles include tying campaign creation to budgeting, refining traffic, and considering trade-offs based on product group granularity

Tie Campaign Creation to BudgetsWhen deciding how many Shopping campaigns are needed, budget allocation should be considered as budget caps reside at the campaign-level Do you have product lines with separate budgets? Do you have some products that you want to promote more heavily due to better performance or seasonality? If you do, then creating separate campaigns for those products or product lines will increase your control and likely, your return

Refine TrafficAfter you create your campaigns, you can exclude products to ensure you don’t have multiple campaigns competing against one another for the same search queries Kenshoo clients are able to leverage negative keyword suggestions that can be applied at the campaign and ad group-level to help increase control of what searches your PLAs will be applied against and limit inefficient spend

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Kenshoo clients can also easily filter to view multiple product groups at the same time

A one-to-one, product-to-product group structure will give advertisers the most bid and promotional message control, but it can also be difficult to manage manually Kenshoo’s PLA-specific bid policy can thrive on this granularity by analyzing and clustering product attribute information to predict revenue per click and drive the best returns on PLAs

In our recently released report, An Inside Look at Google Shopping Campaigns, Matt Lee of Rakuten Search echoed

best practices to be granular in grouping methods and the benefits of Kenshoo's PLA bid policy, saying "it allows us to further refine our campaigns and maximize our ROI."

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Consider Trade-offs Based on Product Group GranularityWhen creating product groups within your campaigns, you can subdivide by product attributes seven times and can even create one product group per product The more granular your structure, the more insight you will have into the search queries that are triggering specific PLAs

Kenshoo makes it easy to view your product group structure by collapsing the criteria you’ve filtered by into one line so you don’t need to drill into a tree view to understand which products you’re bidding on and what their bids are

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Launch & TimingOnce you have created your Shopping campaigns, you will need to push them live and pause your existing PLA campaigns If your new Shopping campaign structure is similar to your old PLA campaign structure, you can do this in a phased approach If your Shopping campaign structure is different, you will likely want to make the change all at once to avoid having the two campaign types compete against each other

After launch, performance analysis and product-level reporting are important so you can refine your Shopping campaigns post-launch Product-level insights can help you decide whether or not you need to break out additional products into their own product groups to improve performance In order to help with this, Kenshoo has provided product-level reporting for over a year and a half and will continue to do so

Timing of launch is extremely important Obviously, you want to launch before the end of August, when Google will only support PLAs through Shopping campaigns You should also take into consideration any seasonality in your business in order to minimize performance disruptions If you use a technology platform, such as Kenshoo, you should wait until they offer fully tested support for Shopping campaigns

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Transition Checklist

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To ensure you have a smooth transition we recommend reviewing all the items on this list

ɡ Review feed with consumer in mind ɡ Ensure you can track PLAs alongside your paid search text ads ɡ Create campaign structure based on budgeting requirements ɡ Create product groups to ensure you can control bids and promotional copy with the granularity that

you need ɡ Create Shopping campaigns in paused status on AdWords ɡ If your Shopping campaigns structure mirrors your current PLA campaigns, launch in a phased approach ɡ Automate product group bids with an automated bid policy ɡ Leverage product-level performance for improved return on social advertising

We will continue to provide updates as the migration deadline approaches and Kenshoo releases additional PLA solutions We believe that Shopping campaigns will open the door to opportunities for better PLA management, and if you take into consideration these tips when creating your transition plan, you will have continued PLA success Please reach out to your Kenshoo account manager with any questions