Starting your online business may be a little daunting at first. One of the hardest decisions to make when starting up is deciding which platform you are going to advertise with. Each has its pros and cons. In this article, we will look at all of the points to consider prior to advertising your dropshipping store with Google Ads.
I won’t be telling you why Google Ads is perfect for you, there’s a chance it may not be, but I hope to give you the right information here so you will be able to make a well-informed decision.
Why do people use Google Ads for their Ecommerce Stores?
People use Google ads for many reasons, with the main one being it brings people to you who are already potential buyers. This means not a great deal of work is required to persuade them to buy as the intent is already there.
Another big reason is the incredible machine learning which comes with it. Google Ads learns about your audience and can find correlations in buyer patterns the human brain alone cannot comprehend. This is a great help for when you get to the place where you want to scale your business.
Should you use Google Ads for your dropshipping store?
The main question to keep in mind is ‘What is my end goal?’, surely it’s sales, right? Unfortunately, it is not that straight forward.
Getting sales is actually the easy part; however, getting sales and remaining profitable is what will keep your business going.
Ad spend plays a huge part in your business, so it is incredibly important to get this under control from the beginning. Getting your name out there to begin with is beneficial to all businesses, so just because a customer doesn’t buy from you, it doesn’t mean it is a lost cause. Many don’t convert on the first visit.
Unfortunately, brand awareness isn’t a metric you can measure nor put a price on, it is something that comes along with advertising on any platform, so a visit without a sale is not a wasted visit.
If you’re not yet decided on whether you want to use Google Ads or not for your dropshipping store, then don’t worry. I collected the pros and cons of using Google Ads for you below.
The Pros & Cons of advertising your dropshipping store with Google Ads
With your business goals outlined above, why don’t we dig a little deeper into the pros and cons of using Google Ads for your dropshipping business?
You will get engaged shoppers from Google Ads
They are searching for your product or service, so they are already interested. Social media does it differently as they have an ad put in front of them and they don’t have buyer intent at that moment.
Google Ads works well if your product or service is already known and people are actively searching for it, not so well if product awareness is not so high.
A good way to gauge this is by creating a Google Ad account, and using their ‘Keyword Planner’.
It helps you understand the current trends of certain keywords, how many searches they get per month, what they generally cost per click, and how stiff the competition is for the keywords. If you can’t see your product/service in there anywhere then perhaps Google Ads isn’t for you and social media ads would be the better choice.
Analytics and integration, right out of the box
One of the best features of Google Ads is it links in seamlessly with Google Analytics, a data tool that gives you an abundance of data about your site’s traffic.
Google Ads can track conversions via this tool and further on down the road, use this very data to automate who your ads get shown to based on their likelihood to convert into a sale.
Setting it up is a walk in the park, even for those with not a great deal of technical experience as it is all pretty self-explanatory.
One of the cons for this is Google Analytics can be an information overload, so it up to you to decide which data is important to you and sifting through the rest can prove troublesome at times. However, being in this industry, you have to familiarise yourself with this at some point or another.
You pay for the click only
This is a great way to keep a close reign on your spending. With Google Ads, you can set your maximum bid per click and whenever someone performs a search, an auction happens behind the scenes between you and your competitors for ranking on the page.
If you bid $0.50 per click, your competitor bids $0.60, but the customer clicks on your ad, then you won the auction for a lower bid.
The drawback to the PPC method is your search term can fall into an unrelated search query if you’re not careful, you could then pay for a click from a customer who will never buy.
An example of this is if you sell ‘women’s hats’, if you don’t define the strictness of this term, people searching ‘women’s pants’ or ‘men’s hats’ could end up on your site and not be a quality click. Here’s an example from Google:
Google Ads provides automation
Google Ads has an incredible machine learning system that gets smarter as you feed it more data. This means that further down the road when you have had plenty of sales, you are then able to hand over the reins for the keyword bidding over to Google.
Google will then use several factors such as time, device used, keywords, and location to determine how likely the user is to convert based on prior data; it will then bid on your behalf based on this likelihood of them converting.
This is a great feature for a well-converting store that wants to ‘set it and forget it’ so to speak. The downside to this is, if you aren’t getting 30+ sales a month minimum, then the data is not going to be so strong, and Google may just run away with your daily budget.
In this event, it is better for you to know your data inside out yourself and set your cost per click (CPC) manually.
Breaking down your Google Ads budget blueprint
So now that you know all of the pros and cons of using Google Ads and perhaps you’re convinced this is the right advertising platform to use, then now is the time to consider your budget.
Google Ads is not the cheapest platform to advertise with compared to, for example, Facebook Ads. The upside is you pay for the click and not just to show the ad to the people. This gives you great control over your spending.
But to begin with, you do need to know what you aim to spend to get a single sale in order to put together a blueprint for your advertisement campaign.
During this article, we will say we need to spend $10 to get each sale for a product which sells for $50 and costs $20 per unit. The math in this case is relatively easy:
$50 Revenue – $20 cost – $10 ads = $20 profit per sale
Now a healthy conversion rate is 5%, so we will assume that for every 100 visits our store gets, we would expect 5 sales. So now we are slowly getting an idea of what we are expecting to spend and what we should be expecting in return.
So now, knowing that we need to get 100 visits to get 5 sales, we can look at what we can afford to spend per click. You get this by saying 1 in 20 customers in this case will convert to a sale, and you want to spend $10 to get that sale. This is where the math is straight forward to find out your max CPC (cost per click):
$10 budget per conversion / 20 clicks = $0.50 max CPC
You should then take this figure over to the keyword planner mentioned earlier to get a rough idea of what the average CPC for similar keywords are costing.
If your budget per click sits comfortably within the figures shown, then you are in a good place. If it shows, for example, $1 per click, it doesn’t mean you can’t still go for it, just means you aren’t likely to get plenty of clicks doing so.
There is nothing wrong with not wanting to go toe to toe with competitors straight away on your click bids, and many would argue against doing so. On the flip side however, ranking 1st on a search term means YOU are the main player in that sector, which helps with your quality of traffic.
If your cost per click seems viable and the potential traffic seems plentiful, then perhaps Google Ads is for you. If either of the two doesn’t look promising, then consider looking towards other advertising platforms. Alternatively, you could run a test budget of $10 per day for a couple of days and gauge the reception.
If you’re interested in learning more tips on how to set your Google Ads budget correctly, then I suggest reading the article I linked to below:
Google Ads provides you with as much or as little automation as you wish as well as the ability to keep a very close control over your ad spend. To use it, you do need to learn your terminology in order to determine which information is and isn’t relevant to you.
I hope to cover all of this in a later article. You will need to know this regardless of which advertisement platform you decide to go with, so this is not a drawback exclusive to Google Ads.
Finally, it’s a great platform with a fairly low entry barrier for even brand new businesses, which provides you with endless data to help you make well-informed decisions, or you just set it and forget it, making use of their machine learning automation which provides limitless scalability.
Let us know in the comments below if you’re going to use Google Ads for your dropshipping store or not! And don’t forget, you can always contact us if you got any questions. Just press the “Contact Me” button at the top!
Getting Started with Dropshipping in 2020
So, are you ready to get started with dropshipping? Or maybe you have already started, but you’re looking to get some inspiration?
If so, then I suggest reading this complete Shopify dropshipping guide.
It’s a huge article, but it contains everything that you need to know to create your own Shopify dropshipping store in 2020. It’s like a dropshipping course, but then for free!
Reading this article will surely help you to get started and to stay motivated while beginning and continuing your dropshipping journey.
Just don’t forget that success takes time. Keep improving each and every day!
And here are the articles I suggest you read next:
- 21 Awesome Shopify Dropshipping Store Examples
- Influencer Marketing and Your Dropshipping Store in 2020
- SEO for Dropshipping Stores: 7 Ways to Increase Your Traffic
- How to Find Winning Dropshipping Products? (Product Research Methods)