How can I improve my cost per conversion? Is it even possible?
I need to reduce it by around 65% to make it profitable.
I'm using the smart shopping campaign and getting an average of 1 sale a day but because of ad spend the sales are working out at a loss.
Any advice at all will be very much appreciated.
Solved! Go to the solution
This is an accepted solution.
You have a couple of options:
1. Set a Target ROAS: If you log into your Google Ads account, you should be able to set your Smart Shopping campaign to use a Target ROAS bid strategy. (ROAS = Return on Ad Spend)
2. Reduce your Smart Shopping budget.
3. Stop using Smart Shopping, and use a regular Shopping Campaign instead.
This is the best long term solution, but requires you to get hands-on with Google Ads (which is a good thing to learn anyway).
Here is a great guide for you to get started with this by Digital Darts: The Definitive Guide to Google Shopping for Shopify
The problem with SmartShopping is it's lack of transparency, and so you can't easily turn off non-performing segments/placements.
Hope this helps.
I’m going to give setting target ROAS a go first. Is a target ROAS of 1,000% achievable?
Yes, however the higher your target ROAS, the lower your spend/reach/conversions will be. ROAS is the inverse of Cost of Sales (COS). So an ROAS of 1000% = spending 10% of your sales on acquisition. So if you spend less, you will get less sales (but at least they will be profitable! Which will hopefully allow you to increase your budget over time)
A general strategy that has worked well for me in the past, is to have a very high ROAS for "brand aware" customers (those that already know about your brand or website), and to spend up to my entire profit margin to acquire new customers (assuming that they will purchase again in the future at a much lower cost of sales).
So something like:
The problem with Google Shopping, is that there isn't an easy way to segment your audiences this way.
If you want to read more about the good and bad of SmartShopping (vs doing it yourself) here's a good summary: