Major Comparison Shopping Engine Bidding Processes
CPC Bidding Models for Major CSEs
Each individual CSE’s bidding model differs slightly from others, but in general you should follow this rule of thumb:
Bid low or remove from your shopping feed the products that aren’t converting into sales and bid higher on those that are. Check out all the major CSEs’ rate cards here.
Here are the basic bid processes and differences for each major CSE:
Google also offers a Cost per Acquisition (CPA) mode which generally requires less management but creates a projection for what your CPC bid based off of the percentage of each sale you set to give to Google.
This projected CPC determines your ranking which gives you less control the CPA campaign. If you offer a lower percentage in the CPA model, your rankings will be as low as an equivalently low CPC bid. This can hurt your sales volume.
The cool thing about Google Shopping’s rate card is that there isn’t one really. Google Shopping allows for open market bidding, meaning there’s no minimum bids that you have to adhere to. You can choose to bid as low as 1 penny (penny-bid) for any product in any category.
Penny-bidding gets rid of the need for a merchant to remove a product entirely from their Google product feed. Merchants would want to do this for low converting products, or products with low AOV. This however, allows for more open competition, so it’s infinitely more important for a retailer to decide what is a competitive bid for a certain product category.
For information on how to break out your Google Shopping ad groups, which ultimately determine how you make bid changes to your products, check out our definitive Google PLA Guide resource.
Amazon Product Ads
Amazon’s tiered bidding prevents you from setting one bid for an entire category e.g electronics. Amazon’s bidding requires that CPC bids to be higher the more expensive your products get.
Here’s an example. If you sell a camera for $50 and another for $150, the minimum bid you can make on the $150 camera will be higher than the minimum bid you can make for the $50 camera.
Another key aspect of APA bidding is that it only allows for category-level bidding. Online merchants on Amazon can’t adjust specific product-level bids, so all of the products within a category will be affected by a given set category-level bid.
You should seek the benefits a 3rd party Analytics service (like Google Analytics) can provide with product-level conversion reports. Using Google Analytics or another 3rd party Analytics platform is essential to a profitable APA campaign.
However, Pricegrabber does allow online merchants to set penny bids for products through the Pricegrabber merchant login.
If you have a poorly converting product (a.k.a. it’s getting a lot of clicks but no sales) then you can set the product bid to 1 cent. A 1 cent bid allows online merchants to control click spend, but translates to lower product ranking for those products. Penny bidding however is a better option than removing products from your feed completely. Note there is still a PriceGrabber rate card that retailers must adhere to.
Test bids below the minimum (say increments of 5-10 cents), to identify ranges where you can maintain the same volume of traffic at a lower bid. Eventually you’ll find a point where your traffic plummets, letting you know when you’re bidding a little too below the minimum. Do this instead of going straight from the average minimum bid to a 1 cent (penny)-bid.
Shopzilla follows a CPC model that does feature a minimum bid process (merchant must adhere to rate card minimums). However, if an under-performing product is hurting your budget, you can zero-bid the product so you don’t have to remove them from your feed.
Zero-bidding essentially acts like Pricegrabbers penny bidding, just at a $0 CPC, and with even less visibility for products within search.
Your product will be removed from a general query search unless there are too few overall products in that category, at which point Shopzilla will add it back to the rankings.This is a better option than removing products from your data feed because your product is searchable and you don’t have to pay for clicks.
You should check zero-bid products after about 30 days to see if any have converted, and raise the bid to the minimum or slightly above that to increase exposure for products which have generated orders.
Shopzilla also has the easiest bidding tool to use of all CSEs. You can zero-bid a product at the standard merchant login or even in the shopping feed. There’s also a product search bar in the merchant bidding tool for easier, more efficient product-level bidding. The Shopzilla filter option in the merchant center also facilitates placing specific bids.
Changing product bids on Shopping.com isn’t something online merchants can do at this time. This means that you can’t alter each individual product’s bids, only the categories they fall under.
To remove specific products which are under-performing onShopping.com, you should generate a product reports and down-bid or remove those SKUs from your shopping feed.
Like Amazon Product Ads, Shopping.com is price-tiered. Log in to the merchant page, hit the “campaign” tab, then go to “reports” to click on one of your product categories. Shopping.com breaks down the price buckets (typically 3) for those products within the category highlighting metrics including number of orders and COS.
Conversely, you can raise the bid of a price bucket with a low COS. Review the reports in the “reports” tab then transfer over to the “bidding” tab to update your bids.
Here’s an example of this type of report:
You can set a different bid for each brand so that you can bid lower on the brands that usually don’t sell so well. Nextag also allows for product and category-level bidding.
Be wary, however, because we’ve seen varied reports on the effectiveness of brand-level bidding. Try to stick to product and category-level bids.
Continue on to Chapter 4 to learn how you can optimize your site for the traffic that CSE campaigns will bring.