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Google Vehicle Ads: What You Need to Know About The Bidding Process
Understand the basics of Google's newest performance ad format for car and the bidding process that powers it.
If you’re looking to purchase a new car, you’ve probably seen google vehicle ads. These ads appear when you search for vehicles on Google near the top and look similar to other shopping ads. But what are they? What’s the bidding process like? And why are they so effective?
In this blog post, we’ll answer all of these questions and more. We’ll also discuss what smart shopping campaigns are and how you can use them to increase your chances of winning a Google vehicle ad campaign. So read on to learn everything you need to know about the Google Vehicle Ads bidding process!
If you are just learning about Google Vehicle Ads, check out our blog post that explains how the program works, its benefits, and how to get started.
Why Google Vehicle Ads are High ROI
If you are an automotive dealership looking to invest in online advertising, Google Vehicle Ads are perhaps the most powerful option. They’re effective and can generate a high ROI for your business.
Make sure you have a solid understanding of what’s being measured in terms of performance metrics. There are many factors to consider when running Google Vehicle Ads, so be sure to fully understand how they work. The bidding process is seemingly automated but can actually be manipulated and managed with ROAS bidding.
Google Vehicle Ads are Smart Shopping Campaigns
Google has made notice that vehicle ads are now created using “Smart Shopping Campaigns” and will become “Google Performance Max” campaigns in early 2023. Pro-tip: Google may give you the option to set your vehicle ads up as Google Performance Max campaigns. Do not opt for this option, as vehicle ads do not work when set up under Performance Max Campaigns.
Currently, Google Vehicle Ads are Smart Shopping Campaigns that allow automotive businesses to feature their inventory prominently across Google surfaces, including search and maps.
“Simplify your campaign management, maximize your conversion value, and expand your reach with Smart Shopping campaigns. This campaign subtype combines Standard Shopping and display remarketing campaigns and uses automated bidding and ad placement to promote your products and business across networks.
With Smart Shopping campaigns, Google’s machine learning uses your product feed to create and show a variety of ads across different networks, including the Google Search Network, Google Display Network, YouTube, and Gmail. Our systems test different combinations of the image and text assets you provide, then select and show the most relevant ads, automatically.”Google https://support.google.com/google-ads/answer/7674739
How Smart Shopping Campaigns Work
When it comes to Google’s new smart shopping ads, the key is tracking conversions.
The base conversion we track is VDP (vehicle detail page) conversions. We typically assign a value of $1 to each of these conversions. This provides a necessary feedback loop so that the Google Smart Campaign can get “smarter”.
Without this feedback loop, the Google Smart Campaign remains dumb, and the traffic you get (if any) is more random. By giving the Google Smart Shopping Campaign a conversion feedback loop, you begin to leverage the power of Google’s data.
The campaign begins showing your ads to those more likely to click and convert and shows your ad less to those that are not likely to convert.
This feedback loop is measured by Google internally, and a ROAS for the campaign is established. ROAS (return on ad spend) = ratio of spend to conversion value (shown as a percentage)
Example – Spend = $100 and VDP Conversion Value = $200 —> ROAS = 200%
How the Bidding Process Works for Google Vehicle Ads
Google Vehicle Ads are a great way to get your dealership’s car ads seen by potential customers. However, there is no bidding process – the ads are “pulled” based on your dealership’s location and inventory. This is reinforces Google’s importance that they put on a location’s proximity.
This means you don’t have to worry about irrelevant ads that won’t be effective. It’s also important to keep feed quality and robustness high in order for Google Vehicle Ads campaigns to work optimally. Making sure you are tracking VDP conversions back to your Google ads is by far the most important factor in being able to control the bidding process.
Conversions: The Key to Making Vehicle Ads Fly
Regarding Google Vehicle Ads, conversions are the key to success. Proper conversions tracking will provide the feedback loop necessary for improving the “smart” algorithm. By having adequate conversion tracking, you can establish a base ROAS. Once you have a base ROAS, you can use ROAS bidding properly.
How to Manipulate and Manage Google Vehicle Ad Campaigns
In your campaign settings, there is a checkbox for ROAS bidding available. If your conversions have been tracking correctly, you can utilize this ROAS bidding to force more or less traffic in relation to your daily spend budget. Let’s examine how ROAS bidding works. We will use our example from earlier in this article.
Example – Spend = $100 and VDP Conversion Value = $200 —> ROAS = 200%
Many Google Vehicle Ads users complain they are not spending their full daily budget. Let’s assume that is the case for our example. How do we force Google to send more traffic?
Above, we can see the algorithm is trying to get us 200% ROAS.
Lowering our ROAS goal to 150% or 100% will signal to the algorithm to be less “picky” as to whom your ads are shown to and cause an increase in overall traffic. Please note lowering the ROAS goal will also likely mean a lowering in CTR (click thru rate).
Let’s examine another scenario.
You ARE spending your total daily budget with an average of 200% ROAS. In this scario, we want to increase the quality of leads. Therefore, we will increase the ROAS to 225% or 250%. Watch your account and see if you can get more leads for the same amount of money. Keep bumping this ROAS target up until you see that Google cannot fill your daily spend budget. — This is your sweet spot.
Other factors do affect spend and bidding…
- Competition – how many other dealerships in your geo have similar inventory?
- Number of physical people in the geo fence. Google Vehicle Ads are a “local” based product. If you live in a low-population area, there may not be enough people to show your ads to.
Frequently Asked Questions
Is it possible to get a higher placement in Google Vehicle Ads by paying more money?
Currently, the only way to force more traffic with Google Vehicle Ads is to have proper conversion tracking and lower your target ROAS goal.
What are the different types of bidding available in Google Vehicle Ads?
There are no real bidding controls with Google Smart Campaigns. Utilize target ROAS bidding to better control leads and daily spend.
What should I expect if I choose ROAS bidding for my campaign?
Lowering ROAS bidding target = is typically done if the daily budget is not being spent as desired. More (possibly less qualified) traffic.
Increasing ROAS bidding target = for those spending their entire budget. The same amount of spend, but more conversions.
Google Vehicle Ads offers one of the best ways to display your vehicle inventory to those searching. Not only do they offer high ROI, but they are also designed to display in real-time to those looking for your inventory locally. By following the tips mentioned in this blog, you can easily generate conversions and manage your Google vehicle ad campaigns to perfection!
If you are interested in receiving a full demo of Vehicle inventory and ad programs on Google, or are interested in a management service, please contact our sales team.