Performance Max Campaigns for Marketplaces

Google has introduced specific performance max campaigns for marketplaces, simplifying advertising for sellers on these platforms. Here are the key points:

Requirements and Setup:

No Website or Merchant Center Account Needed: Only a Google Ads account is required.

Direct Connection: Link your Google Ads account to the marketplace's ad manager using the latter's product data. It is not possible to promote your website simultaneously in the same campaign.

Management and Monitoring:

Check Participating Marketplaces: You must ask your marketplace if it participates in this program.

Conversion Tracking: Managed by the marketplace; review their tracking methods.

Key Differences:

URLs are not expanded, nor are assets automatically created.

No video assets and no cross-account conversion tracking.

No data segments for audience reporting or new customer acquisition modes.

This simplified approach is designed to make it easier for sellers to use advertising on marketplaces without the usual complexities.

Key Formulas for Establishing a Paid Media Budget

In digital marketing, calculating a paid media budget requires precision, and knowing what to calculate and how to do it. Here's a quick guide to understanding the essential formulas that will allow you to optimise your investment.

🔍 Definitions to keep in mind:

📌 Average Order Value: Average amount a customer spends per transaction.

📌 Direct Costs: Costs directly linked to the production or delivery of the service/product.

📌 Lead Conversion Rate: Percentage of leads that convert into customers.

🧮 Essential Formulas

Target CPA:

Gross Profit per Order * Percentage of Profit Allocated to Paid Media.

CPL Target:

CPA Target * Lead Conversion Rate.

Monthly Budget:

CPA Target * Number of Customers Needed

ROAS for E-commerce:

Total Monthly Revenue / Monthly Budget

Use these metrics to set up and adjust your campaigns more effectively, based on actual performance and market conditions.

Remember: successful paid media management starts with a well-thought-out budget.

Performance Max Campaigns: Budget Considerations and Conversion Rates

If you can't budget for at least 10 clicks/day for your Performance Max (target leads) campaign, there is a considerable chance that it is not going to perform well.

The budget needs to be able to realistically achieve at least an average of 1 lead/day, and if you can't achieve at least 10 clicks/day on average, you are asking your Pmax lead campaign to perform at a conversion rate of over 10% (which is rarely the case unless we are talking about branded search). The average conversion rate on Google Ads in 2023 was 7%. *Source: Google Ads Benchmarks 2023 by Industry - Mega Digital