We love Google Shopping and Shopping Ads. We have gained a lot of experience with our customers. Because of that, we realized there is a real paradigm shift with one of the most common definitions in E-commerce. We are talking about 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
“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.”
The Long Tail
When it comes to business, the term Long Tail is applied to 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, it can quickly be established that about 80% of the products are responsible for 80% of the revenue here, whereby only one or two conversions are 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.
Where your costs and conversions come from – AdWords scripts
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! 😉
Download script here:
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.
You like our script? There is something else you want to let us know? Don’t hesitate to write us 🙂