Grow online sales
To grow high-value online sales, top advertisers are using the Google Ads Growth Formula’s four step, best-in-class strategy.
Meet the formula that will drive high-value sales for your business
There are many paths to success with Google Ads. The Growth Formula was designed to help you follow the most direct path to driving your online sales.
To drive results amid economic uncertainty and build resilience for the future, download our condensed best practices guide.
Set objectives
Pinpoint and align your business objectives with your team. Then you can make sure your marketing, media, and campaign objectives and KPIs are working together to achieve that goal.
Align with executives like the CFO and CMO to make sure you fully understand their main business objectives. This usually falls into one of three categories: market share, revenue, or profit.
To create long-term sustainable growth, shift your focus from driving sales revenue to profit.
And keep in mind – great business objectives are measurable, time-bound, and raise the bar above what you’re already achieving.
The marketing objective should be informed by the bottom-line business objective and signed off by the CFO and/or CMO. In this case, we’ll focus on growing high-value online sales as the primary marketing objective.
This positions marketing as a profit center, rather than a cost center.
Media objectives help you meet the marketing objective – which, in this case, is increasing high-value online sales. They’re usually set by the digital marketing team, and break down into two parts:
Performance objectives focus on the bottom of the funnel, measured by KPIs like transactions and form submissions.
Brand objectives focus on the mid-top of the funnel and drive factors like ad recall, brand awareness, and brand interest.
Best-in-class advertisers look beyond lower-funnel performance marketing, and focus on a full-funnel strategy – with brand goals that drive lower funnel outcomes.
Campaign objectives are the KPIs used to gauge the success of a specific marketing campaign. We recommend you keep a close eye on return on ad spend (ROAS).
If you’re measuring proxies like CPA, it’s imperative to shift focus to actual business outcomes, with KPIs like ROAS or lifetime customer value.
EXPLORE HOW JEN DOES IT
See how Jen sets objectives for her company, Feather.
Meet Jen. She’s in charge of digital marketing at the mattress company Feather.
Know your business objective
Jen’s CEO’s business objective for the year is to increase revenue from online channels and affiliates by 25% – from $10M to $12.5M – by the end of 2022.
Knowing this, Jen can draw a direct line from hitting her goals to hitting her CEO’s goals.
Align on your marketing objective
The topline marketing objective that Jen and her CMO care about is increasing the number of sales on their website from new and existing customers by 25% before mid year – from $4.5M to $5.6M.
Set your media objectives
Jen sets two media objectives for Feather:
- Her performance objective is to drive 7K purchases from customers from Google Ads by mid year.
- Her brand objective is to reach 2M engaged viewers on YouTube by mid year.
Together, they should help her CMO reach their marketing objective.
Pick your campaign objectives
Since Jen has two media objectives, she sets a campaign objective for each of them:
- For her performance objective (7K purchases), her KPI is a target return on ad spend (ROAS) of 350% over Q1-Q2.
- For her brand objective (2M engaged viewers), her KPI is a 15% brand lift from viewers on YouTube.
Get ready
Success is built on solid foundations. Make sure you have the big three in place: privacy-safe measurement, an automation strategy, and powerful creative.
Over the past few years, users' concerns over the usage of their data, and increased industry privacy regulations, have made the long-term future of digital measurement more challenging.
Make first-party data your best friend
Use cookies that live on the same domain as your site, known as first-party cookies, to track conversions. This will help prevent potential conversion loss from browser cookie restrictions. It’s best to avoid using third-party cookies that are restricted by some browsers.
Marketers who effectively use their first-party data can generate 2x the incremental revenue from a single ad placement, communication, or outreach.1
Measure the full customer journey
Once you’ve set up the foundation, improve the accuracy of your conversion measurement in a privacy-safe way to mitigate conversion loss. From there, invest in attribution across the entire conversion path.
Advertisers who use enhanced conversions for web see an average increase of 17.1% in measured conversions on YouTube.2
Compare apples to apples
Consolidate platforms to bring all sources of customer data into one place. As your data scales and your process becomes more automated, this will be even more important.
1BCG, Responsible Marketing with First-Party Data, 2020
Some customers bring more value than others, and your strategy should reflect that. In a perfect world, you’d be able to focus on your best customers and spend budget only on them – with 15% of Google searches being new every day, it’s incredibly time consuming and nearly impossible to do manually.
Traditional bid strategies like target CPA control for ad spend and treat all conversions equally, but target ROAS controls for both ad spend and customer value.
To find your target ROAS, use this formula:
Focus on bidding strategies like target ROAS and maximize conversion value, along with broad match keywords, that enable you to bid to the value of each customer – not just how much it’ll cost to acquire them.
Advertisers that switch their phrase and BMM keywords to broad match in campaigns using a target ROAS can see 12% more conversion value.3
2Google Internal Data, Mar 2021- Sept 2021
3Google Internal Data, July 2020.
Combine automation with strong creative. Research backs up what we know to be true: the creative aspects of an ad (like headlines) are still the most important element in driving sales.
Write more effective search ads
Responsive search ads give you the opportunity to provide multiple headlines and descriptions. Google Ads automatically tests different combinations to learn which combinations perform best for your customers.
Advertisers that switch from expanded text ads to responsive search ads, using the same assets, see an average of 7% more conversions at a similar cost per conversion.4
Write more effective display ads
With responsive display ads, you upload your assets, and Google will automatically generate ad combinations.
By adding responsive display ads to an existing ad group, on average we see 90% more conversions at a similar CPA. 5
Create more effective YouTube ads
After lots of testing, we boiled down the essential rules for effective creative on YouTube. Make sure to share them with your creative team before they start on their next video ad.
4Google’s Internal Data, June, 2022
5Google Internal Data, Q3 2020
EXPLORE HOW JEN DOES IT
See how Jen gets measurement and automation in place for Feather
Understand your customers better with privacy-safe measurement
COMPARING ATTRIBUTION MODELS FOR FEATHER
A data-driven model distributes credit differently for each interaction along the consumer journey.
After setting up data-driven attribution, Jen realizes one of their Display ads had a much bigger impact on sales than originally thought. Even though more sales were coming from the Search ad, most of those were from people who had clicked on the Display ad first. As a result, Jen increases the budget on her Display ad.
Find your highest-value customers with a value-based bidding strategy
Feather wants to make $4 for every $1 they spend on advertising, so Jen does three things:
- She deploys a broad match keyword strategy to capture potential new searches she can’t anticipate.
- Next, Jen uses responsive search ads to provide relevant and personalized ad copy.
- Then, using target ROAS, Jen only targets customers who’d give her a 400% ROAS or better. This means spending up to $250 to sell a $1,000 mattress, or up to $10 to sell a $40 pillow.
Using target CPA, Jen would be eligible to target both customers Tony and Tiara. Using target ROAS, Jen would target Tiara, maximizing her return.
Stand out with powerful creative
After making her Search and Display ads headlines and assets more effective, Jen works with her creative team to quickly and easily make a YouTube ad for Feather from scratch using Video Builder.
Take action
Now that you’ve got best-in-class automation and measurement in place, let’s take a look at different types of campaigns that can supercharge your marketing investments.
Start with Search ads
Search campaigns are great for driving sales or traffic to your website because you can show your ads to people actively searching for the products you offer.
Set up Performance Max for retail
The next generation of Smart Shopping campaigns, Performance Max, combines several campaigns into one, simplifying campaign management and allowing you to reach customers across more of Google’s channels – YouTube, Display, Search, Discover, Gmail and Maps – from a single campaign.
Based on early testing, advertisers who upgrade Smart Shopping campaigns to Performance Max see an average increase of 12% in conversion value at the same or better return on ad spend (ROAS).6
Acquire valuable customers with App campaigns
If you have an app, use Google App campaigns to drive purchases and interact with your most valuable customers.
App users generate 3.5x more revenue per user than a mobile website. 7
6Google Data, Global, Ads, September - October 2021.
Feed the funnel
It’s critical to generate more mid and top of the funnel demand. When done well, the mid-upper funnel is the engine for a brand’s growth, and profit.
59% of consumers have found their favorite brands while doing things like watching videos on mobile, catching up on interests, and reading through emails. Once they’ve discovered a brand, 85% of these people take a product-related action within a day.8
To engage these people as they “window shop” and discover new products to purchase, implement Discovery and YouTube campaigns.
YouTube and Discovery campaigns are better together. More than 60% of advertisers who combine Video action campaigns with Discovery ads see incremental conversions at or below their original CPA.9
Nurture your prospects and loyal customers
Re-engage people using remarketing and Customer Match, which recently lowered its audience eligibility thresholds.
7Multichannel Merchant, 2019
8Source: Google / Ipsos Connect, Consumer Discovery Study, U.S., December 2018, n of 2,001 US consumers age 18-54 who go online at least once a month
9Google Data, Global, Feb-Mar 2021. Data from 350 Video action and Discovery campaigns adhering to budget best practices with a minimum of 20 conversions. Incremental conversions are defined as conversions earned at or below the marginal cost for a conversion
10Source: Global, March 2021. Compared 941 campaigns that added product feeds versus without product feeds.
EXPLORE HOW JEN DOES IT
See how Jen captures and generates demand for Feather
Capturing existing demand
Jen uses Keyword Planner to see what customers search for when researching mattresses, and then creates a Search campaign targeting the most relevant terms.
She also sets up Dynamic Search Ads to automatically cover any keywords missed using page content from their website.
Finally, she follows the steps to start migrating her Smart Shopping campaigns to Performance Max to increase conversion value at similar or better ROAS.
Generate new demand
To generate demand with customers who weren’t already looking for mattresses, Jen runs a Video action campaign on YouTube to broaden her userbase, with prominent calls-to-action and headline text overlays.
Evaluate & expand
As time passes, you’ll better understand how your ads are performing. Use this information to optimize your performance, test new strategies, and find more opportunities for growth.
Understand your customers' path to purchase
Unsure how many times a customer has to interact with an ad before purchase? We’ve got you. Go to “Tools & Settings” in your Google Ads account and select “Attribution”.
Meet your superfans
Now let’s see what else we can learn about your top customers. Head to “Tools & Settings” in your Google Ads account and select “Customer value”. This will give you anonymous, aggregated consumer data showing what characteristics your top customers share.
Use pencil before pen
Before trying out new strategies, give them a test drive using drafts and experiments in your Ads Account. Then stop by the Performance Planner to see the impact different budgets could make.
11"The Dividends of Digital Marketing Maturity", Boston Consulting Group, February 18, 2019.
If your campaign is hitting its targets – but maxing out its budget – there’s probably more room to grow. Check your impression share in your Google Ads account – it’ll tell you how many impressions were gifted to competitors due to insufficient budgets.
Reevaluate your campaign objectives
Now that you have more data, evaluate your performance goals. For instance, consider adjusting your ROAS. If it’s too high, you could be missing out on additional sales. If it’s too low, you could be sacrificing profits for volume.
Try to find the inflection point that allows you to maximize your overall profit.
Optimize for lifetime value
Evaluate lifetime value when planning your next steps.
Figuring out the value of each of your customers isn’t easy. You’ll need to evaluate data from paid sources, organic sources, and your other marketing efforts. Figuring out lifetime value will allow you to bid to the full value each customer provides your business.
To get started, find out how much you’re earning from each customer, go into Google Analytics, open reports, and select “Audience > Lifetime Value”.
EXPLORE HOW JEN DOES IT
See how Jen optimized her marketing investments
Jen successfully increases Feather’s online sales by 25%. However, when analyzing the impression share data for her campaigns, she notices that she is still gifting impressions to her competitors.
So she checks the Recommendations Tab, and uses the optimization score to easily identify opportunities to maximize Feather’s potential by increasing the budget of specific campaigns.
By staying on top of all the opportunities for the account, Feather is able to hit their stretch goal for the year.
Congratulations on completing the Growth Formula
Since it’s not a linear journey, you’ll want to revisit steps as time passes. We recommend bookmarking this website. We'll keep this guide up to date with the latest Google product announcements and launches to position you for continued growth.
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