Drive and Convert

Announcer:
You're listening to Drive and Convert, a podcast about helping online brands to build a better eCommerce growth engine, with Jon MacDonald and Ryan Garrow.

Jon:
All right, Ryan. Let's jump in today. I am excited to talk about conversion tracking in P Max. As you know, conversions excite me. I want to hear more about this.

Ryan:
Any time I can get the word "conversion" in a title, I do it. I'm like, "Talking to Jon. Let's get a "conversion" in the title."

Jon:
You know my number. Let's make it happen.

Ryan:
What's interesting now and I'm finding a lot, in the Google Ads space, we're talking more and more about the actual conversions in the system, because what we're seeing at a high level, smaller spends, generally speaking, struggle in Performance Max. If they don't have an agency or resources, they just call Google and Google's like, "You've just got to give it more improved data to let it have something to optimize off." Which conceptually sounds smart.
What we end up seeing after the fact is like, "Great, you gave all these data points to Google's algorithm to optimize off of, and it turns out they're doing really good. The algorithm is excited. It thinks it's awesome, but it's not driving any revenue." So congratulations. You've got a lot of conversions that Google loves, but they're not the right conversions. So it's understanding how to manipulate an algorithm in your favor and understanding that if you call Google, Google may have a different goal than you in that conversation.
Today, I want to dive into just what does conversion tracking look like in this new world of P Max, and what should you or could you be doing to help your system and your ads perform a little better once you get some of the right data points.

Jon:
Okay, so I'm going to need a little more info than that, since I don't drive traffic. Why is Google adding conversions? Tell me more about that.

Ryan:
Yeah, so what we've got is last year, Google moved us all over from Smart Shopping to Performance Max, and they said it's going to be great because Performance Max is going to be one campaign to rule them all. Not only run your remarketing, but display YouTube, text ads, whatever information you give it. Great.
The struggle we're seeing now, especially on smaller advertisers, is if you spend a thousand dollars a month or $2,000 a month, your shopping campaigns before may have only been getting a couple conversions a week, couple conversions every couple weeks, depending on the size of your product or price point. Not a lot of data points. And the more data you give an algorithm, generally the better it's going to be able to accomplish your goal.

Jon:
I see. So now Google's asking for other types of conversion, essentially.

Ryan:
Yeah. So Google's saying, "All right, you're not getting the actual end of process, the revenue sale, so let's go a few steps further up the funnel and give this algorithm more data points like, 'Hey, add to cart.'" Why not? Makes sense. Let's even go page views or time on site and start adding all of these what Google calls and most people refer to as micro-conversions. It conceptually makes a lot of sense. From a high level, not a terrible deal. But the big punchline to this is what we're seeing in a lot of these systems is, great, you've given these goals and you want to max conversions instead of revenue, because you don't have enough revenue to, say, max revenue. Max conversion.
Turns out there are a lot of people that will add stuff to a cart and never check out, and Google is really, really good at finding them. So you've got all these carts out there and your remarketing piece of the system is not working to bring them back. Either you don't have a discount going toward them or the system's not... So it's like if you maybe had a Klaviyo autoresponder on email to give a discount, maybe. But the system looks great. From a goal perspective, you're getting a shit ton of conversion. There it's not conversion that's driving revenue.

Jon:
Okay, so first of all, I'm not shocked that Google is good at finding people to add to cart and not buy, but I am shocked that Google isn't doing the math and saying, "Yeah, that conversion is there, but ultimately, this isn't leading to sales, so we know the add to carts aren't showing a conversion of a purchase, so it's really not as good as we're putting it out to be." They know, but of course they're in the business of selling ads, not fixing carts, right?

Ryan:
Mm-hmm.

Jon:
Getting people to buy. So I can understand that. But I look at all these micro-conversions and I say, "These should be shedding light where there's friction in the process," right? That's why we use it at The Good. So people aren't checking out. Maybe the checkout is just broken or has a horrible UX, right?

Ryan:
It could be. There's a lot of options for where and how these ads are showing as well. It may not always be down the funnel. Yeah, it's a shopping feed going out there and getting clicks coming to the site, but if they're only putting it in the cart and not checking out... A lot of these small merchants are on Shopify. Shopify is a pretty solid system that doesn't have a lot of the ability to break it, right?

Jon:
Yeah.

Ryan:
If I'm on a Shopify site, I know it's a Shopify site, because the checkout's similar.

Jon:
So tell me this. I often see in Shopify checkout, unless somebody is on Plus, it takes them to a different Shopify domain to checkout. And I often see in data that that screws up people's analytics because what's happening is they track and then it drops off because they don't have the proper tracking code being embedded into the Shopify checkout. That's a hosted checkout essentially, right?

Ryan:
Mm-hmm.

Jon:
And this is all unless you're on Plus. If you're a bigger brand, you're on Plus, you control your checkout, which is great. But all in all, I do think Shopify's checkout is pretty optimized. Have you noticed at all that maybe the data tracking is just off when it gets to checkout, and that's why it's saying, "We know people are adding to checkout," because they're going to checkout, they're leaving this domain to go to the checkout domain, but then the conversion isn't being tracked appropriately there? Is that an option?

Ryan:
Could be, but we're just not even seeing the revenue and analytics even. And if the pixel is optimizing off all these add to carts and they're checking out, you'd still see in Analytics, "Things are great. I love it."

Jon:
Because they do come back to the domain after they complete checkout. Yeah, okay.

Ryan:
Yeah, so-

Jon:
Purchase, yeah.

Ryan:
... it ends up becoming a function of giving enough data to an algorithm so it can feel like it's successful and push towards a goal, because you gave it the goal of max conversions because you don't have enough revenue to maximize the revenue. So you have all these micro-conversions, great, you're getting people to get on the site and stay there or view enough pages. That's not what you're looking for in a business that's trying to sell stuff.
In fact, I even had an eComm, it was yesterday, it was a lead gen. They put a bunch of these conversions on there and let the system kind of do it. This company thought they were doing really well because their conversions were just off the charts. They had a display campaign that had a 12.5% conversion rate.

Jon:
Whoa.

Ryan:
I mean, if you're giving away free crack, maybe you've got that kind of conversion rate on display, but there is no scenario those are good leads for your business. And they're like, "Yeah, we kind of were concerned about that." And Google was double counting lead form. It was terrible.
So I think if you're a small business and you're calling Google, I get why you get to that point. But you have to understand too, if you're small, you're talking to somebody at Google that probably doesn't have a lot of seniority. They're new. They're on the phones. They're smart usually, but they just don't understand the complexities of tracking, conversions, what the system does and what it's trying to accomplish. So you're better off probably getting on some groups on Facebook or something else to try to solve some of these problems, but the punchline is don't add a bunch of conversions that don't turn into revenue or aren't tracking revenue to try to get a system to start working.

Jon:
Right. Yeah. You're better off just focusing on getting people to the site and then tracking what happens from there.

Ryan:
Yeah. Let your site do its job, and you probably have to start focusing a little bit more in the CRO space, but you're not big enough probably to do official CROs, so you have to do that... Well, we've coined CRI, conversion rate improvement, where you do small little tests that just follow some logic to remove some of the friction.
But for small sites, if you're on Shopify, it's likely there's not a massive amount you're going to be able to do, and there's probably not a ton of friction anyway. So it comes down to more about what's your business trying to do or how are you competing in the space, why is somebody going to buy from you versus somebody else. If you're competing against Best Buy in the electronics space, you have to figure out something that is going to cause people to want to buy from you.

Jon:
Yeah, you might want to niche down a little more.

Ryan:
Yeah, niche down. Have a loss leader. The other thing. So from a conversion standpoint, my advice for small businesses, keep it simple. You don't have enough spend or resources to get really complex and cute in your conversion tracking. That's going to give you an advantage over other small advertisers or big advertisers.

Jon:
So then what should, in your opinion, eCommerce advertisers be tracking?

Ryan:
One thing, revenue. You have one pixel for ads, put it on there, track conversions. You can have analytics tracking as well. I don't care if people visit five pages on my site. That's something I can look at in analytics, but if they're not checking out, maybe I didn't want that visitor in the first place. So track conversions.
And yes, your Performance Max campaign might not have enough data to do what it's going to do. You can still set up standard shopping campaigns. And maybe that's what you need to do is start focusing on, yes, manual bidding, which sounds archaic, but you're small enough that you don't have the ability to give an algorithm a lot of data.
If you're going to do Performance Max, keep that conversion, but really tone down your goal if you're shooting for a highly profitable return on ad spend as a small business stop. There's no option that you should be trying to push for profitable first orders from Performance Max campaigns. Like adjust your goals and let the system maybe get you a bunch of conversions that don't make profit. Break even would be a great thing, but at least lower it and start it. Right.

Jon:
So you're saying it doesn't really matter if it's a analytics pixel, an ad pixel, basically track. But have both metrics, but really just focus on revenue.

Ryan:
Yeah, focus on revenue and yeah, you have to understand that analytics is going to track it differently than ads. You don't need... Though the nuances do a little research. It's not complicated, but that's not something we're discussing.

Jon:
Are you of the camp, I know we've talked about this before, of having a single source of truth? So which one would you rely on over the other, or am I putting words in your mouth?

Ryan:
The single source of truth is you're going to look at analytics for the holistic what's the going on in the brand. Within ads, I want my source of truth likely to be my ads pixel because it's aggressive and it's going to take credit anywhere on the path. Because what happens in a shopping campaign in Google Ads is it generally will fall to my left, I guess. First click would be where I'd say left. It's going to convert maybe through direct organic, maybe through an abandoned cart email.
In analytics, it might not get as much credit as you'd want it to have. So the ads pixel, it should always be higher than the analytics pixel tracking your return there. So I want them in the respective places, and most of my analysis is going to happen in analytics that I want to be my source of truth, if you will, around what's going on in driving my business forward to where I want it to be.

Jon:
Okay, great. So let's say we've cleaned up our conversion tracking and we're only tracking revenue. Is it now guaranteed to work? I mean, because...

Ryan:
Yeah, I wish. But I mean, if you think about it from a high level, when they created this Performance Max campaign, it was ideally to be the easy button to let small advertisers do some stuff.

Jon:
Right. Right, right.

Ryan:
But if you don't know how to push an algorithm forward, you're going to struggle. And it's become much more complicated to operate. So I mean, start with your goals and make sure that you're shooting initially for really high goals.
In fact, if you talk to most agencies, experts, even Google, you've got to feed this algorithm a lot of money to get it going. If you're competing in a space with a lot of large advertisers, a lot of competitors, and you're willing to spend $5 a day on Google ads, that algorithm is not going to get enough data for months and months, if ever, because you've got competitors that may be spending a thousand dollars a day, if not more.
So push for conversions, which is sales. It should be don't give it maybe return on ad spend goals. Just say , "Hey, let's give it some budget, give it some juice to get some sales." Understand that if you're feeding data in in addition to conversions, it has to do with feed, it has to do with understanding the marketplace that you're in. If you're a map pricing industry, everybody has the exact same price point, so you can't really compete on price.

Jon:
Hopefully.

Ryan:
Yeah. There's going to be some, but what I will say is there's some large advertisers that are big enough as a retailer that they can still be on map, but they're maybe 5 cents less, like 149.95 instead of 150 is the map. That 5 cents does make a difference. Because the Google algorithm or the shopping system will say, "This one's cheaper." If you don't have free shipping and everybody else does, it's a total price point that's important. You can go there. There's some ways you can bundle products to create new ones in your feed. But you have to understand that if everything is equal and you're the small advertiser, you're going to lose to a bigger advertiser. So you have to be scrappy. I mean, that's probably the best description.
Right now in the Google Ads world, if you're smaller, you had better find a way to be scrappy and be really creative in thinking outside the box, and optimizing your feed. The titles that you put into your feed have an impact. They're going to be truncated. And if you can get a better title for the same exact product, same price to encourage a click, you're going to have a lot of advantages in Google, because they want the clicks, and you're going to get more of them, so they're going to like you better. So be testing a lot of that, optimize that feed.

Announcer:
You're listening to Driving Convert the podcast focused on eCommerce growth. Your hosts are Jon MacDonald, founder of The Good, a conversion rate optimization agency that works with eCommerce brands to help convert more of their visitors into buyers, and Ryan Garrow of Logical Position, the digital marketing agency offering paper click management, search engine optimization, and website design services to brands of all sizes. If you find this podcast helpful, please help us out by leaving a review on Apple Podcasts and sharing it with a friend or colleague. Thank you.

Ryan:
So when P Max was released or pushed on to everybody at the end of last year, it was really a perceived easy button for small businesses to get everything going. It's the one campaign to rule all within Google. Display, YouTube.

Jon:
Wouldn't that be nice.

Ryan:
It'd be great. So as an agency, you're like, "Damn, what's going to happen on this?" or, "Am I going to have value?" or, "What am I going to be able to do? Who's going to need an agency?" Well, what we've figured out after playing with this for a few months now is that the perceived simplicity of it actually made it more complicated. Because it can do so much, there are so many optimization points to help get that Performance Max campaign to work, that it's become more difficult. If you don't have an agency working for you or internal experts, you can dig yourself a hole very quickly that's difficult to get out, especially if you've got that wrong conversion data.
Because AI, as we're figuring out with a lot of buzz around ChatGPT and the weird one that Google released that lied to people, it can go very quickly in the right direction and very quickly in the wrong direction. And if you are giving it wrong data, it's going to quickly go in the wrong direction for you. That's why I'm seeing that a lot.
So I think business owners are going to have to start probably getting a little uncomfortable with budgets and accepting little returns, again, that make them uncomfortable, getting this going. Because if you are... The rich are going to get richer in this scenario. I've been beating this drum for a while. AI is going to have a few brands succeed and a lot of brands have no chance, and you've got to get your brand in position to be one of the winners, or you're going to be left out in the cold with very few options for driving new customers to your brand.

Jon:
So there's a big warning here about P Max. Do you have to be on P Max right now?

Ryan:
You don't have to be.

Jon:
Would you recommend people wait?

Ryan:
Probably going to be valuable for a lot of small brands to be testing standard campaigns on some of their products that they just need to get into the marketplace. If Google's not seen that product before, it has no data in Performance Max other than the feed description and titles to try to figure out what it is.
So we've helped some brands start up that you might just need to get really aggressive on bids and shopping and just get it out there and start targeting or sculpting some keywords for it, because you can still do that in standard shopping campaigns, to say, "Google, this is for this. Let's get it in there." So you start seeing it. And then if you're the only one that has it and you've done the Manufacturer Center, all the things to protect our IP, almost, there's opportunities there, but it's, again, complicated and going to be very difficult for a brand to do that without a team of experts, I think.

Jon:
Awesome.

Ryan:
I mean, I wouldn't be able to do it.

Jon:
Yeah, no kidding. Well, I've learned a lot today. Thank you, Ryan. I think I'm a little leery of P Max after this conversation, but I also think that businesses who have not found a product-market fit, can't close and sell a product yet, they need to fix their business and their product before you really need to be blaming P Max. That's what I'm getting out of this.

Ryan:
Yeah. And don't just add conversions to try to get P Max to work. That's not going to be the system that fixes your business or the Performance Max can as it sits.

Jon:
Right. Outside of P Max, I wholeheartedly believe they should be looking at that data and trying to fix those, but not just tracking that data only to feed better ads, because that's not going to work.

Ryan:
Yeah. Keep that in analytics and let a team like Jon look through some of that data to be like, "You've got a lot of people adding to cart, but not getting to the checkout," or, "You've got a lot of people landing on category pages that aren't getting into product pages. Let's try to figure out where the friction is in the flow." Performance Max campaign's not going to solve... I'm saying you don't want just a bunch of people that are willing to look at a bunch of pages or add something to cart that never have an intent to check out.

Jon:
Awesome. Well, thank you, Ryan. Appreciate it.

Ryan:
Yeah, thank you, Jon.

Jon:
[inaudible 00:17:55].

Ryan:
Cheers.

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Thanks for listening to Drive and Convert with Jon MacDonald and Ryan Garrow. To keep up to date with new episodes, you can subscribe at driveandconvert.com.