As Google continues to push for automation, advertisers have gotten more creative about making updated best practices, including smart bidding strategies, work for their companies and verticals.
While value-based bidding has become a staple for ecommerce and retail brands, non-retail verticals have struggled to incorporate it effectively into their holistic PPC strategies.
This article explores the challenges faced by non-retail industries in embracing value-based bidding in Google Ads and how to make it work for your unique business.
Making value-based bidding work for non-retail brands
Most ecommerce and retail brands can seamlessly update their bidding strategies to value-based models.
The revenue is already set up.
The conversion path is clearly valued (i.e., add to cart, purchase, first-time or returning purchaser value)
The steps to transition make sense.
But for finance? SaaS? Insurance? Healthcare and education? It’s been a trickier shift for many advertisers in these fields.
At its core, value-based bidding takes designated signals noting the quality of a customer into consideration while ultimately optimizing for the highest possible value to the business.
This is absolutely attainable for non-retail companies and will function the same way. But it should be treated a bit differently in terms of strategy and setup.
Think about your business and what you’re most proud of from an advertising or website analytics standpoint:
- Do your users spend an average of 10 hours on your site per visit? (This could be a world record, so congratulations!)
- Have you spent a ton of time and energy making sure your attribution method is accurate?
- Does your YouTube channel statistically and unwaveringly contribute to 99% of your conversions?
- Are you struggling with conversion drop-off rates from a lead start to lead submit? If so, you are, in fact, a perfect candidate for value-based bidding.
Consider what’s valuable to your company and what tagged activities contribute to the lifetime value of your customers.
Once you’ve answered these questions, you’ve proven that value-based bidding will work for your business.
In the meantime, there are several bigger-picture factors to consider:
- Identifying the conversion actions to include
- Defining conversion rates and assigning values.
- Considering whether to include offline conversions in your data.
Below are different options and thought-starters for each step.
Defining goals: What matters most?
The funnel stage is an incredibly important piece of the puzzle.
For many advertisers, it can feel like there are limited options for which conversion actions are most important to their bid strategy.
For example, a B2B company whose main KPI is qualified leads generally cannot optimize that low in their funnel in a bid strategy due to data limitations or low conversion volume.
The best case scenario will be to have ~2-4 conversion actions marked with a value for value-based bidding to work effectively.
However, many non-retail companies may have difficulty deciding what else is important to them outside their final lead submission or last-step conversion item.
In many cases, lead form submissions are the last tracked data point via a conversion tag or Floodlight for advertisers to optimize for.
Marketers need to remember that every touchpoint is important in a customer’s journey.
Maybe you mark a pageview, time on site, and a lead start as your set of conversion actions to include in a bid strategy.
Each is a tick in the consumer journey to become a qualified lead. Foundationally, value-based bidding is optimizing for more than lead volume or an efficient tCPA.
Any data that advertisers can tag for the algorithm is helpful.
The fine line here, however, is determining conversion actions with a high enough conversion volume per month (30-50 actions at minimum) while also being low enough in the funnel to drive higher and more qualified conversion rates.
Secondary and tertiary touchpoints: The middle of the iceberg
If you’re struggling to identify secondary and tertiary goals to include values for, imagine your customers’ journey from their perspective.
How many pages do they need to visit or buttons do they need to click before completing the primary conversion?
If the primary goal is a button click on the homepage, consider including a minimum time on the page as a secondary conversion action to increase the number of qualified leads.
If a pageview feels too broad, how about creating an engaged visit action, where the time on page needs to be higher than 30 seconds to count as a conversion?
Or visiting 3-4 pages, using Google Analytics data to create a custom conversion?
From there, you can hone in on the most impactful chunk of the funnel before losing out to offline data that may be unavailable or hard to import on a consistent cadence.
In these scenarios, it’s crucial to align on the best inflection point.
Can we optimize for lead form submissions since they’ll be higher volume, or should we import offline data from submissions or scrubbed leads as a last touch even though we know the drop-off is steeper?
If offline conversions are less than 30 per month, even if they’re worth 100X of a lead submit, it would be better to aim higher in the funnel so that the bid strategy can best optimize.
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Defining values: What’s it worth to you?
Once a goal has been agreed upon, it’s time to look at values. Google has released a helpful calculator as a starting point.
Still, it will also be good to have an internal contact and an analytics resource on hand to help comb through the known data points, conversion rates, lifetime values, and any other important variables for your business.
The conversion rates will be your easiest entry point.
If you’re looking at 100 engaged page visitors, 60 lead form starts, and 50 lead form submissions, with a lead form submission worth $100, you can calculate the trickle-down metrics using Google’s calculator.
This will tell you that your lead submission is worth $100, your lead form start is $83, and your pageview is $50.
If your approach requires lifetime values to be calculated, use your CRM as a source of truth to gauge your customers’ fullest potential within your company.
Once you’ve calculated the highest value (within the ~30 conversions per month guideline), work backward with your analytics team to determine specific values for the events leading up to the main goal.
Offline data: To ingest or not?
The last major commonality in a non-retail bidding strategy is the ingestion of offline conversion data to include in optimizations.
In a best-case scenario, offline conversions are set up and directly available in Google Ads or SA360 for conversion action with minimal proxies or gaps.
In reality, there are often data lags, connectivity issues, and other unforeseen hurdles when setting up offline conversions.
To get ahead of this, consider what resources you have available.
- Do you have a 20+ person team that can help get everything in order?
- Do you need to work with six different vendors to attach each puzzle piece?
Evaluate your appetite for a heavy lift and how you can set smaller goals to reach full value-based bidding. Can you set up value-based bidding using only online tags to start?
I’d offer that most of your customer journey on your website or in your ads is helpful to inform value-based bidding.
You’ve set up a great user experience online for your customers to find you (paid ads), reach you (your contact information is listed somewhere, I’m sure – if not, please make sure it is!), and raise their hand showing interest in your company (a lead form, a phone call, an appointment booking, and so forth).
Anything outside the web for the majority of these industries (a closed booking, showing up to an appointment, scheduling a follow-up meeting) will happen more naturally and at higher rates by strengthening the online footprint using value-based bidding.
Embracing what sets your industry and business apart
The shift into more automated bidding and the emergence of value-based bidding as an option for many verticals come with both headwinds and tailwinds.
Any businesses considering shifting to value-based bidding but wary of the effort or setup should zoom out and consider the strategies outlined above to start their journey towards bidding to value.
The future of advertising will only get more automated in exciting ways, so ensure the “best practices” work best for you before they are no longer optional and/or continue to evolve.
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