Aug 16
2010

Bidding Strategies for PPC Shopping Engines

Bidding strategies are important for PPC (pay-per-click) shopping engines. All major shopping engines (with the exception of Google Product Search and Bing Shopping) are PPC, and most allow for a variable bid. To be successful on sites like Shopzilla, PriceGrabber, Amazon Product Ads, and NexTag, you must have a competent bidding strategy.

There are two important tasks to consider:

  • Initial bidding strategy
  • Ongoing bidding strategies

Initial Bidding Strategy


Don't list your inexpensive products.
  • For example, it's probably not worth paying for clicks on an item that is only worth $10. Decide on a cutoff rate (i.e., the lowest priced product that your company is still willing to pay for). Typical cutoff rates are between $15 and $40, but it varies based on your product margins and lifelong customer value (indeed some retailers do list ALL of their products, even cheap products).
  • Now that you have your cutoff rate, login to the shopping engines and "zero bid" products under this value (i.e., set the bid amount to 0 thus indicating you don't want to pay for clicks on those items). Alternatively, you can inform VersaFeed of your cutoff price and we will remove those products from the feed completely (an easier method if you are a VersaFeed client).
Don't bid on miscategorized products.
Shopping engines (and data feeds) will frequently miscategorize some of your products. For large retailers with many products this is unavoidable. You'll want to set bids in these "off" categories to 0.

Bid the minimum price plus a few pennies.
You're now left with a subset of products that are worthy of PPC fees and categorized appropriately. For these items, bid the minimum plus 1 to 5 cents. The most popular bid is exactly the minimum and, by simply adding a few pennies more, you can frequently beat out more than half of your competitors.

Ongoing Bidding Strategies


  • Ongoing bidding strategies are how you adjust your bids over time based on hard sales data that you acquire from either Google Analytics, the shopping engines own tracking software, or other. No ongoing strategy can exist unless you are actively collecting hard data on conversions (sales) from one of these tracking solutions.
  • Remove or decrease bids on underperforming products. Depending on how you track your conversions, you should be able to ascertain if there are products that are getting clicks, but are not converting into sales. Either zero bid these products or have VersaFeed remove them from the feed completely.
  • In a similar vein, you can often track product categories' success rates. If you see certain categories that are performing poorly, either decrease the entire bids category or remove them from the feed.

A few additional notes...


  • Everything is highly dependent on your product lines and your price point. If you have an underperforming shopping engine and you've followed the above rules, drop it. It simply doesn't always work.
  • Ongoing bidding strategies frequently get overlooked. The problem: it's difficult to actually track sales conversions and then make adjustments to your bidding strategy. However, this doesn't mean that you can avoid it — dig into your analytics data, talk with your data feed providers, and lean on your account manager at the actual shopping engines. Often times you can turn around a negative ROI shopping engine with efficient bidding.
Still having issues with a shopping engine? Don't hesitate to request your free demo today for individual attention and advice.

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