We love Google Shopping — and we have a lot of experience with it. That’s why we realized quite quickly that there is a paradigm shift regarding one of the most important AdWords phenomena: the long tail.
- Classic Long Tail approach says that 20% of the products are responsible for 80% of the revenue. The other 80% of the products generate 20% of the revenue.
- SEA experts argue with the classic Long Tail.
- We conducted our own analysis to test the SEA experts’ statement
- Where your costs and conversions come from – an AdWords script
- Introduction how you can use AdWords scripts
The Long Tail
Do you remember what Chris Anderson said about the long tail? It was 2004 when he wrote in an article for wired: “Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.” When it comes to the Google Shopping business, the term long tail implies rank-size distributions and rank-frequency distributions. In general, the classic long tail approach says that 20% of the products (top sellers) are responsible for 80% of the revenue. The other 80% of the products generate 20% of the revenue.
Many online retailers and SEA experts argue with the classic long tail approach — but if you observe the revenue generated from Shopping ads, you can quickly find that about 80% of products are responsible for 80% of the revenue here, whereby only one or a maximum of two conversions is associated with each individual product.
To prove this statement, we analyzed 246 accounts with surprisingly similar results: Up to 70% of costs accrued in Google Shopping derive from articles with as few as 0 conversions, while up to 80% of the revenue is generated by Long Tail products with just 1 or 2 conversions per month.
Many people follow their gut feeling and drastically reduce the CPC for articles with few conversions or completely remove them from their campaigns – but is this the best approach? Most likely it isn’t. Articles which only accrued 0 or 1 conversions during the last month might have the potential to generate more conversions during the coming months. Missing this potential could be fatal as these articles in total generate 80% of the turnover.
Our data scientist Thomas Otzasek wrote an article with the title Avoid Common ROAS Optimization Pitfalls In Google Shopping.
Questions? Don’t hesitate to contact us!
Script: Where costs and conversions come from
In order to give you an impression of the correlation between costs, conversions and the Long Tail within your own account, we sat down and wrote an AdWords script for you. This script will evaluate the Long Tail and the Non-Converters from the last 30 days. The code won’t change anything about your AdWords campaigns, it just analyzes your existing data and provides you with an automatic evaluation. Conversion tracking is a pre-requisite though!
How to use AdWords scripts:
Log in to your AdWords Account (the one with your Shopping campaigns). Click on bulk operations > Scripts
Add a new script.
Authorize the new script.
Allow script to use your information.
Delete the existing code and copy the new script. Click on Preview.
See your results in Logs.
If you like our budget eater script, check out the other scripts we provide on smarter-ecommerce.com. Have fun!