When done right, Performance Max campaigns can be the reason your eCommerce brand scales to unimaginable heights.
But what’s the perfect strategy for your eCommerce brand specifically and how do we find it?
Over the past two years, I’ve had the opportunity to work with countless eCommerce brands in varying different niches.
And while our main focus has always been profitability when working with eCommerce brands, we’ve found a way to test different approaches for the campaign types we run along the way.
But before we can dive into our findings and exactly what the perfect Performance max structure is for eCom brands, let’s understand what ‘perfect’ even means.
Giving ‘Perfect’ A New Meaning
In the world we live in, ‘perfect’ is essentially ideal from all sides and angles as we deem fit. But when it comes to Google ads and eCommerce, ‘perfect’ can have a whole different meaning.
The reality is, this word can be changed based on the brand we’re working with.
The ‘perfect’ Google ads strategy for a beauty brand may be a flop for a furniture brand. In a situation like this, how do we even define ‘perfect’?
In order to get to the ‘perfect’ strategy for your eCommerce store, we need to begin work with a very general approach.
In this case, we could label this approach as the ‘perfect’ approach to figuring out an ideal strategy for your brand. Because simply put, there is no ‘perfect’ without a deep analysis.
Some things that affect the best approach when it comes to Google ads include the average order value (AOV) of the brand, the previous data the account has, the conversion rates, and many more small details that create the whole.
In order to pinpoint the perfect strategy, it’s important to keep an open mind and start with the best possible generic approach that can take us to that level. But before we do that, let’s understand Performance Max on a fundamental level.
How Performance Max Really Works
Since I’ve been involved in scaling eCommerce brands past 7 and 8 figures, I’ve gotten a direct look into how the algorithm works when it comes to Pmax.
And while it’s technically not any different from what we’ve already seen in the past (smart shopping, standard shopping, etc.), it’s still worth mentioning.
On a fundamental level, Performance Max is designed to “maximize performance” (hence, the name).
It does this by using all of the cues available within the ad account and within the market. So the reality is, a Performance Max campaign needs previous data to work properly.
The only real difference between Pmax and other shopping campaign types is that Performance Max combines multiple placements with shopping to gather data faster.
Within the backend, the auction reacts the same way as it would to any other campaign type and whether your product ranks #1 of #50 is still determined by:
CTR + bid + landing page experience
So despite the powerful nature of the campaign, the fundamentals remain the same.
Have the best possible landing page that your audience would interact with the best.
Use the best product images and have SEO techniques within the title and description.
Price competitively.
Unfortunately, most eCommerce brands do the opposite.
What Most Ecommerce Brands Do
When it comes to Google ads, most eCommerce brands have a backward approach to scale.
To these brands (and your brand might be repeating these mistakes), it’s all about the campaign budget or the product price.
There’s very little effort put into improving the conversion tracking or making the Google Merchant Center more optimized or optimizing the campaigns.
Rather, it boils down to bidding the most or spending the most.
Or maybe lowering prices to defeat competitors.
Eeek.
A failing strategy that leaves profits and revenue dwindling to no end. All this approach does is put your eCommerce brand at the brink of destruction.
This is where the perfect Performance Max strategy comes in.
The Perfect Strategy Overview
As I’ve made clear earlier, we need to use the ‘perfect’ generic approach to find the ideal strategy that’s best suited for our eCommerce brand.
And this generic strategy can go either of these two ways:
Strategy #1 (Newer ad accounts)
Strategy #2 (Established ad accounts)
The entire approach to finding the ‘perfect’ Pmax strategy for your eCommerce brand starts with two different pathways.
And the pathway you decide to take is fully determined by the amount of ad spend done within the account so far.
Let’s dive into each strategy separately.
Strategy #1 (Newer Ad Accounts)
The ideal Performance Max campaign strategy for newer ad accounts begins with a standard shopping campaign.
In this situation, we’re essentially forced to go the standard shopping route simply because a Performance Max campaign needs data to run properly.
At least $1,000 worth of ad spend data and 50+ conversions on the account level.
But with this strategy, it’s as simple as launching via the 2:1 launch strategy:
2 standard shopping campaigns
1 branded search campaign
In terms of the standard shopping campaigns, the actual settings don’t matter as much as the distribution of ads. Essentially, one shopping campaign should be a higher bid and the other one a lower bid.
This distributes out the ‘net’ properly and allows the campaigns to get both a broad audience as well as an extremely narrow one.
This is, essentially, the strategy that should drive the ad account towards that $1k ad spend and the 50+ conversions.
Once this metric is met, we can transition this strategy into strategy #2.
Strategy #2 (Established Ad Accounts)
Once you reach those initial metrics, things get more exciting.
This is where the ‘perfect’ Performance Max campaign strategy can really be derived.
But before we can do that, we need to start with and test two separate template strategies:
> Pmax based on KPIs
> Pmax based on collections
Either of these can be the perfect starting point but for best results, I recommend testing both thoroughly.
The strategy here is fairly simple.
You can distribute the products within each individual Performance Max based on a certain KPI (Target ROAS, cost to fulfil, etc.) or you can simply distribute the products based on collections.
Once the campaigns have spent enough of a budget ($500+), we can begin to further narrow the strategy down. But ideally, the best Pmax structure is derived from either of these two layouts.
This brings us to the long term overview of these two strategies.
Long Term Optimization / Scale
At this point, the campaign(s) should have been running for several days and getting a decent number of conversions.
It’s important to note that running campaigns for an extended period of time should only be done if they’re profitable and hitting desirable KPIs. But once they are, we can further narrow them down based on what’s working.
Of course, if the KPI strategy hasn’t worked the best for your brand, running the products within individual campaigns based on collections can do the trick and vice versa.
Don’t panic if the campaign doesn’t show positive results right away.
It can be a matter of simply excluding the bad products or running the Pmax with shopping only or even completely getting rid of TROAS.
But once something has shown even small signs of effectiveness, the next step is to further segregate into the ‘winners’ vs ‘losers’ strategy.
This is the approach where the losing products get a second chance while the main best selling products remain where they are in their original campaigns.
Any other customizations can be done from this point on to further optimize the strategy, such as with locations or devices and more.
Wrap Up
The perfect Performance Max strategy is really something that is based on a variety of different factors that directly impact individual ad accounts.
One strategy that works best for beauty brands may completely flunk for electronic brands.
In order to derive this perfect approach, we need to start with two generalized approaches, as was shown in the blog post.
Once a winning approach is chosen, it can further be modified to fit the specifics of our brand.
In today’s ever-changing eCommerce rules, it’s important to not use one generalized approach and simply stick to it – especially when it comes to ads.
After all, change is the only constant that’s real with eCommerce.
