January 2017 – Alex Czartoryski

Remarketing Theory

The deeper a user is in your sales funnel, the more likely he is to buy. A shopping cart abandoner is more likely to buy than a product browser who is more likely to buy than someone who briefly visited your homepage.
The more recent the user’s visit, the more likely he is to buy. A user who visited your site yesterday is more likely to buy than a user who visited your site 10 days ago.
The more likely a user is to buy, the more you want to bid on that user.

Audiences

Please read the post Essential Google Ads Remarketing Audiences and follow the instructions to create your remarketing audiences.

Campaign Setup

Create one campaign per major market you are targeting, and give them a descriptive name:

USA: Display Remarketing
Canada: Display Remarketing

Generally, but not always, you will want a separate campaign for every unique currency and language you are targeting.

Core Ad Groups

1. Cart Abandoners

This ad group will target cart abandoners: Visitors who added a product to their cart but never purchased. Dynamic Product ads perform particularly well with cart abandonment, as your visitors are shown the exact products that they added to their cart.

Audiences:

Cart Abandoners – 7 day
Cart Abandoners – 14 day
Cart Abandoners – 30 day
Cart Abandoners – 90 day
Cart Abandoners – 180 day

2. Product Viewers

This ad group will target users who visited a product details page but who never added a product to their cart.

Audiences:

Product Viewers – 14 day
Product Viewers – 30 day
Product Viewers – 90 day
Product Viewers – 180 day
Product Viewers – 365 day
Product Viewers – 520 day

3. Past Buyers

This ad group will show ads to people who have previously purchased. This is a good place to push micro conversions such as joining a loyalty program, joining a community, new product launches or related product up-selling.

Audiences

Past Buyers 14 days
Past Buyers 30 days
Past Buyers 90 days
Past Buyers 365 days
Past Buyers 520 days

Other Tips

Exclude Mobile App Placements

Exclude placements where users are unlikely to interact with your ad, or where they may accidentally click your ad, such as in mobile apps and games.

To exclude mobile apps, go to your ad group and then select:

Placements > Exclusions tab > Exclude placements
App Categories > Expand All App Categories, and exclude all app categories individually
Repeat for all your display ad groups

Exclude YouTube Placements

YouTube tracks View Through Conversions as if they were Click Through Conversions. This leads to attribution poaching, and makes your display campaigns appear to perform much better than they actually do. This ultimately causes you to increase bids and budgets, and overspend.

To exclude YouTube placements, go to: Campaign Settings > Additional Settings > Content Exclusions and select all of the following for exclusion:

Live streaming YouTube video
Embedded video
In-video

Exclude GMail Placements

Gmail “clicks” don’t necessarily result in a visit to your site, and usually only represent the expansion of your ad. This can lead to attribution poaching, in particular if you have a newsletter that you send our regularly.

To exclude gmail placements, go to Placements > Exclusions and exclude mail.google.com

A word about View Through Conversions

View Through Conversions are conversions where a display ad appeared on the screen, was NOT clicked, but the user ended up purchasing on your site sometime later. In general I recommend that everyone IGNORE View Through Conversions, in particular in remarketing campaigns.

What usually happens, is that an ad is displayed on screen, the visitor may not even see it, but clicks instead on a cart-abandonment e-mail and makes the purchase. AdWords will credit that conversion to the view through.

The one exception is for “brand unaware” customers. These are customers that have never visited your website before. If such a customer sees you ad, and purchases, then the odds are better that it was a result of your ad.

In an ideal world, there would be a simple way to test the value of your view-through-conversions, as they are different for every segment, and every business.

Other Resources

Consider this Scenario:

You spend $1,000 on a new Ad Campaign that generates $10,000 in revenue. “That’s a great ROI” you tell yourself, “Let’s double the spend!“.

When you double the budget to $2,000, your Campaign only generates $12,500 in total sales and not the $20,000 you were expecting. Why?

	Spend	Sales	Cost of Sales	ROAS
Ad Campaign #1	$1,000	$10,000	10%	1000%
Ad Campaign #2	$2,000	$12,500	16%	625%

Increasing spend by $1,000 only resulted in $2,500 in additional revenue: An incremental cost of sales of 40% and an incremental ROAS of 250%

Why doesn’t it scale?

By scale I mean that your ROI should be linear: If the first $1,000 generates $10,000 in sales, then the next $1,000 should also generate $10,000 in sales.

The issue is that rarely is your campaign performance evenly distributed. If your drill down deeper into your initial $1000 Campaign, you might see the spend broken down into something like this:

	Spend	Sales	%COS	ROAS
Branded	$200	$8,000	2.5%	4000%
Unbranded	$800	$2,000	40%	250%
$1000 Campaign	$1,000	$10,000	10%	1000%

Majority of the sales are being generated by a small subset of the overall campaign. A classic 80/20 scenario. The performance of the Branded ad set is subsidizing the cost of the unbranded ad set.

The performance of the Branded subset is subsidizing the cost of the Unbranded subset. 80% of your sales are coming from only 20% of the spend, while 80% of your spend is going towards an underperforming segment.

When we try to double the budget to $2,000, here is how the budget gets allocated:

	Spend	Sales	COS	ROAS
Branded	$200	$8,000	2.5%	4000%
Unbranded	$1,800	$4,500	40%	250%
$2,000 Campaign	$2,000	$12,500	16%	625%

When budget is doubled, most of the spend goes towards the underperforming segment, resulting in disappointing incremental sales.

With this new data in mind, we should probably:

Decrease budget on the Unbranded segment
Increase budget on the Branded segment

However, it is probably the case that your performing segment is already receiving 100% reach/impressions. So spending more is usually not possible. (In particular for Google Search Ads targeting your branded term: How much you can spend is a function of how many people are searching for your brand. Once you reach everyone, spending more can’t get you more people).

If you want to increase your spend, the only place to do so is in the underperforming unbranded campaign. But at least you’ll have a better expectation of the results.

Summary

Avoid making budget decisions on aggregate data. Always try to segment and dig a little deeper.
Don’t let underperforming segments ride the coat tails of your top performers. Look for 80/20 campaign and ad group performance and analyze those individually.
For Google Search Ads, always separate your Branded search terms and Unbranded search terms into separate campaigns.