How We Lowered Cost Per Acquisition from $47 to $9 in a Google Shopping Campaign (Using Audience Lists and Retargeting)

We lowered cost per acquisition from $46 to $7 using a Google Shopping Campaign for one of our clients. We also increased ROAS from 395% to 1019%. Here’s exactly how we did it.

People searching for custom Air Force badges or airplane models tend to have something very specific in mind. But just because they search for it doesn’t mean they’re ready to buy.

For example, what does it mean if someone searches “Cessna Citation model” in Google? What does this translate to in terms of a Google Shopping Campaign?

Cost Per Acquisition Google Shopping: A photo of Aviator Gear's Cessna Citation 500 model airplane

Is the person ready to buy a model right then and there? Or is the person just researching? Trying to see what’s available?

From our work with Aviator Gear and other clients, we’ve found it’s often people in the research phase of their buying journey. For that reason, those first clicks after a search don’t always represent a high buying intent.

This “research phase” audience are usually first-time visitors and usually have a high CPA and low ROAS.

In contrast, return visitors tend to convert at a higher rate.

(Note: Want help getting better results from your PPC campaigns? We can help. Contact us here.)

How to Increase ROAS with Audience Lists

Knowing that return visitors convert at higher rates than first-time visitors, we’ve developed a strategy to take advantage of this segment.

By using these strategies, we lowered the cost per acquisition for aviatorgear.com from $46 to $7. We also increased their ROAS from 395% to 1019%.

Here’s are the exact steps we took:

1. We Bid Higher on Past Site Visitors and Newsletter Subscribers

First, we keep our product-level bids low and bid more aggressively on our remarketing lists. For Aviator Gear, that includes:

  1. All site visitors: anyone who had previously visited the website
  2. All Aviator Gear email subscribers
  3. Anyone who viewed a specific category on their site

This strategy is intended to maintain visibility at a lower cost-per-click for a lower converting segment of our audience—while bidding anywhere from 1.5 to 3 times the amount on the audiences above.

By bidding lower on the average person clicking on a product, Aviator Gear isn’t paying as much for their initial interest or when they might be comparing competitor sites.

Instead, we set up their PLA campaign to bid higher on a user’s subsequent searches when they’re more likely to be ready to purchase.

2. We Built Category-Level Remarketing Lists to Target Users Based on the Products They Viewed

If a user had previously visited the site and looked at a specific category, such as aircraft models, we’d bid more aggressively to show that user a Shopping ad the next time they searched for a specific model plane on Google.

Cost Per Acquisition Google Shopping: A sample of what appears in a Google search for "Cessna Citation Model"

We are able to confidently increase bids for this segment as the user has already shown interest in those products, thereby making them a low funnel target.

Cost Per Acquisition Google Shopping: Sample of a sponsored post showing the badges that are sold by Aviation Gear

3. We Made Frequent Bid Adjustments to Accommodate the Constantly Changing Search Landscape

There is no set-it-and-forget-it strategy when it comes to PPC.

As we collect more data, it’s always important to adjust our strategy based on the results we’re generating for clients. There is an ongoing optimization element to this where we regularly adjust product level bids, as well as audience list bids as performance shifts so that we can maximize CPA and ROAS.

Looking for the Next Great Strategy

While this overall strategy is working great at the moment, we have to remember remarketing lists for search ad (RSLA) bidding strategies weren’t always around, which means we also have to keep our eyes open for the next “latest and greatest” PPC strategy to hit the market.

Spoiler: We believe it will be goal-optimized shopping campaigns… but we’ll talk about that later.

(Note: If you’re interested in developing a full PPC strategy for your eCommerce business, we can help. Contact us here.)

Instantly Establish Credibility Online

When selling anything online people almost always prefer to buy from people and companies that they trust.  In fact, many times people are willing to pay more to buy from websites they trust. It’s one of those key components that can boost your online …

When selling anything online people almost always prefer to buy from people and companies that they trust.  In fact, many times people are willing to pay more to buy from websites they trust. It’s one of those key components that can boost your online conversion rate in multiples if done right so you need to...

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Conversion Optimization Examples: Homepage Carousel vs None

Here are 3 conversion optimization examples of how to kill the “slider”. This is not a post about how carousels kill conversions.  They can, but it’s not about that. This post is about doing what’s best for the people who want to buy …

Here are 3 conversion optimization examples of how to kill the “slider”. This is not a post about how carousels kill conversions.  They can, but it’s not about that. This post is about doing what’s best for the people who want to buy from you on your site. Every CRO and savvy eCommerce manager I...

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Why Your eCommerce Conversion Rate Is Probably Better Than You Think

Did you know the most common way to calculate your eCommerce conversion rate isn’t very useful? In this article, we introduce a new way to calculate this rate—and why it matters.

Are you curious how your eCommerce site is performing compared to your competitors?

You might be tracking your eCommerce conversion rate.

But what you probably don’t know is that the most common way to calculate this rate isn’t very useful.

Google Analytics (and many other analytics tools) by default shows a sessions-based rate, which is calculated based on the number of site visits that turn into sales.

And site visits are not the best way to calculate the conversion rate of a site.

Users are.

Note: Want insights to other metrics that impact your conversion rate? We can help. Contact us here.

Ecommerce Overview

Why a User-Based eCommerce Conversion Rate is Better

Sure, it can be nice to know how many site visits turn into a sale, but what does that really tell you?

The number of people that visited your site without buying anything.

It doesn’t tell you if those same people came back later and made a purchase.

A conversion rate based on site visits (“sessions” in Google Analytics) does not take into account longer sale cycles.

Because of this, your website might actually have a higher conversion rate than you think.

This is especially true if a high percentage of your customers visit more than once before making a purchase.

For instance, if a consumer is comparing a product across competitors, they might visit your site, then visit other sites, then come back later and make a purchase, totaling two sessions with one purchase.

In that scenario:

  • The sessions-based conversion rate would be 50%.
  • The user-based conversion rate would be 100%.

To give you a more concrete example, here are the rates for one of our clients in the travel industry:

  • Sessions-based conversion rate: 1.96%
  • User-based conversion rate: 2.24%

The user-based conversion rate is still not a perfect number.

Customers may visit your site then return from a different device, they may clear their cache between visits, they may a different browser to make their purchase, or they might take dozens of other actions that cause Google Analytics to miss that the person is a repeat visitor.

Even so, user-based conversion rate is a better reflection of your true conversion rate than the default sessions-based conversion rate shown in Google Analytics.

Here’s how the conversion rates break out by device type. As you can see, in every case, the user-based conversion rate is higher.

Customers may visit your site then return from a different device, they may clear their cache between visits

Why So Many Tools Default to Sessions-Based Conversion Rate

You may be wondering why so many tools use a sessions-based rate if a user-based conversion rate is generally considered the better option. The answer is that it’s much easier to calculate a conversion rate based on sessions.

An analytics tool doesn’t need to store as much data to calculate whether a session turns into a sale. Calculating a user-based conversion rate means going back in time to track all sessions from a single user.

This requires both more computing power and user tracking.

Note: Want help translating the numbers in Google Analytics into action steps to improve your results? We can help. Contact us here.

How to Track a User-Based Conversion Rate

Google Analytics now has a default metric called ‘Transactions per User’ that equates to a user conversion rate; however, it’s not a default metric.

You can find this metric by going to Reports > Audience > Lifetime Value > User Conversion Rate.

You can find this metric by going to Reports > Audience > Lifetime Value > User Conversion Rate

There are two problems with the metric:

  • You can’t easily control its significant digits.
  • It does not show as a percent for easy visual comparison with eCommerce (session) based conversion rate. In fact, the percentage-based conversion rate that’s shown in the bottom right corner is still based on sessions, not users.

To get the user-based conversion rate, we pull the data from the “Users” and “Transactions” rows to calculate the conversion rate. Using the example above, the numbers are:

  • Desktop: 2,592 (transactions) / 97,487 (users) = 2.66%
  • Tablet: 430 (transactions) / 19,938 (users) = 2.16%
  • Mobile: 1,991 (transactions) / 108,735 (users) = 1.83%

The Other Common Mistake: Looking at Conversion Rate Too Often

Here’s one other suggestion about tracking your conversion rate.

It’s common for people to follow their conversion rate on a regular basis—monthly, maybe even weekly or daily. But doing so can skew your perspective of how your site is really doing.

The reason: you’re probably looking at your rate in a vacuum.

Think about all the ways people get to your site, such as organic traffic, Google shopping campaigns, social media channels:

  • Each channel has its own conversion rate.
  • They are all constantly in flux.
  • They all add up to your overarching conversion rate.

If you make considerable changes to one of these channels, it will—for better or worse —dramatically impact your traffic and conversions.

You can imagine why your conversion rate would peak and then tank after a major ad campaign, and the temporary decrease in your conversion rate isn’t something to worry about.

If you see an overall increase in revenue after the campaign, it’s a win. And your conversion rate should level out (or rise) over time.

Instead of worrying over week-to-week or month-to-month changes to your rate, we recommend watching your conversion rate in these three situations:

  • Looking at your year-over-year rate to see how your site is doing in the long-term.
  • Watching your rate closely during major shopping times, such as the holidays, when quick changes are vital.
  • Watching your rate after major site changes. And of course we recommend thorough A/B testing of any major change.

Increasing Your Conversion Rate is a Long-Term Strategy

Your site’s conversion rate should increase year-over-year through consistent product, promotion, and site strategy. Tracking a user-based conversion rate is just one way to see whether you’re building long-term customers.

(Note: If you’re interested in developing a full conversion rate optimization strategy, we can help. Contact us here.)

Analysis of 115 A/B Tests: Average Lift is 4%, Most Lack Statistical Power

What can you learn from 115 publicly available A/B tests? Usually, not much, since in most cases you would be looking at case studies with very basic data about what was tested and the outcome of the A/B test. Confidence intervals, p-values and other m…

What can you learn from 115 publicly available A/B tests? Usually, not much, since in most cases you would be looking at case studies with very basic data about what was tested and the outcome of the A/B test. Confidence intervals, p-values and other measurements of uncertainty will often be missing, and when present they […] Read More...

8 Elements of a High Converting Squeeze Page

Lead generation is the lifeblood of online business and most lead generation is done via email collection. If you grow a list of prospects who’re interested in your promotions, your business grows too. However, before you make money from your list you’…

Lead generation is the lifeblood of online business and most lead generation is done via email collection. If you grow a list of prospects who’re interested in your promotions, your business grows too. However, before you make money from your list you’ve got to get people on it. Whether you want people to download your...

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Use Your Customer’s Voice to Create Powerful Content that Converts

With the use of social media and web access at all-time highs, it’s more important than ever to create powerful content that converts and makes sure that you engage with your customers. With the 2018 marketing trends in mind, leads and potential …

With the use of social media and web access at all-time highs, it’s more important than ever to create powerful content that converts and makes sure that you engage with your customers. With the 2018 marketing trends in mind, leads and potential customers are looking for a personal touch. They want an account of how...

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Do Online Reviews Really Matter?

Do online reviews really matter, and do they make a difference to your business? The answer is yes, they absolutely do. Consumers increasingly use reviews left by other consumers as part of their pre-purchase research efforts, and a bad review can have…

Do online reviews really matter, and do they make a difference to your business? The answer is yes, they absolutely do. Consumers increasingly use reviews left by other consumers as part of their pre-purchase research efforts, and a bad review can have serious effects on your sales. Herd shopping psychology plays an ever effect on...

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Confidence Intervals & P-values for Percent Change / Relative Difference

In many controlled experiments, including online controlled experiments (a.k.a. A/B tests) the result of interest and hence the inference made is about the relative difference between the control and treatment group. In A/B testing as part of conversio…

In many controlled experiments, including online controlled experiments (a.k.a. A/B tests) the result of interest and hence the inference made is about the relative difference between the control and treatment group. In A/B testing as part of conversion rate optimization and in marketing experiments in general we use the term “percent lift” (“percentage lift”) while in […] Read More...

Visualizing Your Marketing And Sales Process

When you think of the machine that is your online business, what do you picture? Do you see something organic? Something mechanical? I think it’s helpful to pick a vision. The marketing and sales functions are too complex. The tools and channels are ch…

When you think of the machine that is your online business, what do you picture? Do you see something organic? Something mechanical? I think it’s helpful to pick a vision. The marketing and sales functions are too complex. The tools and channels are changing faster today than at any time in history. Thanks, internet. Vizualize...

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