The 80/20 Rule Applied: Optimising Google Ads for Mass SKU eCommerce

Google Ads is a powerful tool for marketing your products and services online. Seeing as you’re an ecommerce website owner, we’re going to be talking about mainly selling products online.

So how big is the marketing for ecommerce? I’ve no idea but all I can say is that it’s HUGE. Whatever market or niche you’re in, you’re going to find a ton of people searching for products on Google Search.

Google is the new Yellowpages and it’s been like this for a long time. All you have to do is look up the Google Keyword Planner and you can see the sheer volume of searches for any particular keyword. 

Let’s type in “toys” and see what it returns in the UK market.

We have about 110k searches per month and that’s just the word toys. You can imagine other variations and specific names for toys.

Dynamic Driven Websites

So how does this all tie in with Google Ads and being a mass SKU ecommerce business? It means that you have a “chance” to make ecommerce work if all you did was source product lines en masse. 

Just the sheer act of creating a website and loading it up with tons of products, and then running traffic campaigns, you’ll start making sales.

In my early days of messing about with websites, I built a dynamic website with pagination by pulling a feed of an affiliate website. I then loaded the site up with the CSV file which produced dynamic unique urls for each product. 

Bear in mind, I didn’t even change up the titles of the product. What happened was that Google indexed all 4,000 products into its search engine and through that act alone, the site started to get traffic and affiliate sales. Granted, it was the early days about 2011 and not much competition for the Google index.

Product, Price, Promotion

These days it wouldn’t be so easy to do that but not impossible. You’d have to change up the titles and description which can be done with AI to stand a chance for free organic search traffic.

The same logic can now be applied to an ecommerce website whether it’s built on a platform like Shopify or Woocommerce. Because you’re not a boutique website or aspiring to be a “brand” with only 10 product lines, you won’t have to worry about dropping a line.

The thing is with specialist boutique brands, their marketing is more based on feelings, creating a story, an emotion to connect with the customer so they can’t exactly just dump a line. They would have to spend a lot of time marketing it before they believe it’s a dud line.

This is NOT something a mass SKU ecommerce seller has to worry about. There is no need to worry so much about branding and feelings. In most cases, it’s these factors that gets the sale:

  1. Good website
  2. Good product
  3. Good price

Done deal

It’s also easier to set a criteria before you drop the product / category / range using your own rules such as the amount of clicks it’s had before you kill it off.

80 / 20 Rule Principle

The 80 / 20 rule says that 80% of your revenue will come from 20% of your products. Now the number varies. It could be 95 / 5 or 70 / 30 but the principle is what matters here. 

A boutique ecommerce company with 10 lines and 10 products each making a total of 100 products, would have in theory only 20 products that are winners and the rest duds.

No one anytime soon is going to feel comfortable telling a boutique company to get rid of the 80% products which are wasting time. 

This is why it is easier to play the marketing game using 80 / 20 principle when you have mass SKU’s. In our experience at Click Metrics, we feel the minimum SKU number to be about 500 product IDs because it allows enough room for speculation and zoning in on winners.

Based on the 80 / 20 rule, you’ll still have 100 product winners to work with whereas it could only be 20 products with a boutique company setup.

Applying the 80 / 20 is a case of knowing how to “read” data and presenting the data in a readable fashion. Take the below example:

The Google Merchant Shopping feed has been broken down into its respective categories and is currently showing at level 0. You can see the hardware category has 13,678 clicks with a ROAS of 2,392% or 23.92x and produced the most revenue whereas the category below it, starting with c has only a 8.85x. Further down we see a dead category with 286 clicks and only 1.11x or 110% return on ad spend. 

We can be smart and make a decision right now and kill off the category with 286 clicks

When the table is sorted via revenue, clicks or ROAS, you’ll see a pattern of 80 / 20 appear. You can then decide based on your own analysis what is your next move. Let’s sort by revenue generated:

Optimising for ROAS

We can still see hardware producing most of the revenue at 23.92x but look below it. There’s a category producing 42.89x with only 314 clicks. When we see data like this, we can question it:

What would happen if we sent more clicks to this category, could we maintain 42.89x or would it drop down to 30x? Either number would be amazing.

What about the 117x from £25.35 spent to get £2,984.17. It only had 34 clicks so let’s send another 200 clicks to see what happens.

I think you get the idea, this is how you play the data game. We need to be methodical about our approach. We just need mass products, a great looking website, good pricing and you’ll be winning eventually when you apply 80 / 20 principles.

By taking this approach you don’t need to worry so much about building a brand for your mass SKU ecommerce website because your sales are led by product and pricing whereas with a luxury or boutique brand, the product is led by feelings, associations, status given etc.

When you can apply rules and filters for mass SKU ecommerce, the only thing you need to worry about is finding distributors with huge SKU list which is pretty much easier than building a brand.

Do you think your website could do something similar? Get in touch so we can strategise: 

https://tidycal.com/michaelnguyen/60

Best regards

Michael Nguyen

Michael Nguyen
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