Conversion tracking has come a long way—from basic revenue tracking to advanced techniques like Enhanced Conversions and server-side tracking. The latest trend in 2024 is to offer enhanced conversion tracking into e-commerce metrics with two features: Cart Data and Profit Data. These provide valuable insights into product performance and profitability.
Cart Data can be used to track specific products sold and Profit Data to monitor profit margins. Let’s take a closer look.
- Cart Data: By tracking specific products sold, Cart Data offers detailed insights into product performance. This helps businesses optimise their product offerings, fine-tune inventory management, and tailor their marketing strategies to target high-performing products.
- Profit Data: Profit Data measures the profitability of each conversion, providing insights into high-margin products and campaigns. This data helps businesses optimise their marketing efforts and maximise ROI.
Together, Cart Data and Profit Data helps businesses gain a deeper understanding of their customer behaviour, optimise their sales funnels, and drive sustainable growth.
Conversion Tracking With Cart Data
We’ve all become familiar with the fundamental principles of conversion tracking: attributing revenue to specific campaigns to assess their effectiveness and optimise our ad spend. In recent years, this practice has evolved significantly, particularly with the advent of Enhanced Conversions and server-side tracking, which have expanded our ability to track conversions even in the face of cookie restrictions.
Here’s how Cart Data and Profit Data have made a significant leap in conversion tracking:
Cart Data
Now, instead of merely tracking which campaign led to a conversion, Cart Data allows us to delve deeper into the specific products purchased in each transaction.
This helps advertisers to:
- Identify top-performing products: Pinpoint which products drive the most conversions and revenue.
- Optimise bidding strategies: Adjust bids for campaigns promoting high-margin products.
- Refine product targeting: Refine ad targeting to reach audiences interested in specific products.
Profit Data
Traditionally, conversion tracking has focused on revenue. While revenue is important, it doesn’t always tell the whole story. Profit Data enables advertisers to track the actual profit or contribution margin of each transaction.
This helps advertisers to:
- Measure true campaign profitability: Assess the profitability of campaigns beyond just revenue.
- Optimise ROAS: Focus on campaigns that deliver the highest ROI.
- Make data-driven decisions: Use profit data to inform strategic decisions about product pricing, promotions, and marketing budgets.
How To Set Up Cart Data and Profit Data
To use the power of these advanced features, you’ll need to:
- Integrate your eCommerce platform: Connect your Google Ads account to your online store (e.g., Shopify, WooCommerce, Magento) using the appropriate integration method.
- Configure data feeds: Ensure that your product feed includes the necessary information, such as product IDs, prices, and costs.
- Set up conversion actions: Create conversion actions for specific products or product categories to track their performance.
- Implement tracking code: Add the Google Ads conversion tracking tag to your website to capture data on product sales and profits.
By using Cart Data and Profit Data, you not only get a deeper understanding of your advertising performance but also make data-driven decisions that drive sustainable growth for your e-commerce business.
Conversions with Cart Data
Conversions with Cart Data offers a more granular view of your advertising performance by tracking the specific products sold, not just the campaigns that were clicked.
This feature introduces two key metrics:
- Lead Revenue: This metric measures the revenue generated from products that were directly clicked on in your Shopping Ads. It provides insight into the immediate impact of your ad campaigns.
- Cross-Sell Revenue: This metric tracks the revenue from products that were not clicked on in your Shopping Ads but were purchased alongside the clicked-on product. This reveals the indirect impact of your ads on driving additional sales.
For both metrics, you can also track the units sold. This provides a clearer picture of the quantity of products sold through each channel.
Why is this valuable?
- Identifying Top-Performing Products: Pinpoint the products that are driving the most revenue and conversions.
- Optimising Bidding Strategies: Adjust bids for campaigns promoting high-margin products or those with strong cross-selling potential.
- Refining Product Targeting: Refine your ad targeting to reach audiences interested in specific products or product categories.
- Understanding Customer Behaviour: Gain insights into how customers interact with your products and make purchasing decisions.
By using Conversions with Cart Data, you can make more informed decisions about your advertising strategy, improve your ROI, and drive more sales for your business.
The Power of Cart Data
Very often, for online retailers with a vast product catalogue, there is a significant gap between the products that are clicked on in ads and those that are ultimately purchased. This discrepancy can be as high as 50% in some cases.
By using Cart Data, advertisers can gain valuable insights into consumer behaviour and optimise their campaigns accordingly. This data reveals which products are actually driving sales, even if they weren’t the initial focus of the ad click.
Key Benefits of Cart Data:
- Enhanced Bidding Strategies: By identifying high-performing products, advertisers can allocate more budget to campaigns targeting these items. This strategic bidding approach can lead to increased conversions and higher ROI.
- Improved Product Targeting: Analysing Cart Data helps pinpoint the products that complement each other. Advertisers can create more effective product groups and target audiences with greater precision.
- Optimised Ad Creative: By understanding the products that drive sales, advertisers can tailor their ad creative to highlight these items. This can increase click-through rates and conversions.
By bridging the gap between clicks and purchases, Cart Data empowers advertisers to make data-driven decisions that ultimately drive more revenue and improve overall campaign performance.
How To Set Up Cart Data?
The process of implementing Cart Data varies depending on your tracking setup.
For Advertisers Using a Tracking Platform:
- Check Platform Compatibility: Most modern tracking platforms, like Elevar, support Cart Data. Consult your platform provider to confirm their capabilities.
- Update Tracking Scripts: If necessary, your platform provider will guide you through the process of updating your tracking scripts to enable Cart Data.
For Advertisers Managing Their Own Tracking:
- Add the Cart Data Script: Integrate the necessary script into your website’s code. While the specific implementation details may vary, it's generally a straightforward process.
- Ensure Product ID Consistency: Verify that the product IDs used on your website match those in your Merchant Center feed. Any discrepancies can hinder the accurate tracking of Cart Data.
A Note for Shopify Store Owners:
A common challenge for Shopify stores is the potential mismatch between product IDs on the website and those in the Merchant Center feed, especially if you’ve used a feed optimisation tool. This can prevent Cart Data from functioning correctly.
Here’s how you can work around these:
- Consult with Shopify Experts: Seek advice from Shopify experts to explore potential solutions, such as custom app development or workarounds.
- Await Google’s Integration: As Google continues to incorporate Cart Data into its Smart Bidding algorithms, it’s likely that the platform will become more robust and accommodate a wider range of scenarios.
While setting up Cart Data may require some technical expertise, the potential benefits are significant. By gaining deeper insights into customer behaviour and product performance, you can optimise your advertising campaigns and drive more sales.
Who Will Benefit from Cart Data?
While Cart Data can be a valuable tool for many e-commerce businesses, it’s particularly beneficial for those with a large and diverse product catalogue.
Here are some ideal scenarios:
- Large Online Retailers: Companies with thousands of products can use Cart Data to identify top-performing items and optimise their advertising strategies accordingly.
- Businesses with Complex Product Hierarchies: If your product catalogue is organised into multiple categories and subcategories, Cart Data can help you understand how different product combinations influence sales.
- Brands with Strong Cross-Selling Opportunities: By tracking which products are often purchased together, you can tailor your advertising campaigns to promote complementary items and increase average order value.
When Is Cart Data Not Useful?
For businesses with a limited product range, the impact of Cart Data may be less significant. If you have a small number of products and a clear understanding of their performance, the additional insights provided by Cart Data may not justify the implementation effort.
Ultimately, the value of Cart Data depends on your specific business needs and the complexity of your product catalogue. By carefully considering these factors, you can determine if this feature is worth exploring.
Profit Reporting in Google Ads
Profit Data in Google Ads allows advertisers to track the profitability of their campaigns beyond just revenue. By incorporating the cost of goods sold (COGS) into the equation, you can gain a clearer picture of your true ROI.
Why is Profit Reporting Important?
- Optimising for Profitability:
- Identify Profitable Products: Pinpoint the products that generate the highest profit margins.
- Refine Bidding Strategies: Allocate more budget to campaigns driving profitable conversions.
- Make Informed Decisions: Use profit data to make strategic decisions about product assortment, pricing, and promotions.
- Accurate ROI Measurement:
- Beyond Revenue: Consider the true cost of goods sold to assess the profitability of your campaigns.
- Optimise for Long-Term Success: Focus on campaigns that deliver sustainable, profitable growth.
How To Set Up Profit Reporting?
To set up Profit Reporting in Google Ads, you’ll need to:
- Add Cart Data Tracking: Implement the necessary tracking code to capture product-level data, including product IDs and prices.
- Provide COGS Data: Include the cost_of_goods_sold attribute in your product feed. This attribute should be filled out for as many products as possible.
- Use Fallback Margins: For products without specific COGS data, consider using brand-level average margins or a general fallback margin.
Who Should Use Profit Reporting?
While Profit Reporting can be beneficial for any eCommerce business, it's particularly valuable for:
- Large Online Retailers: With a diverse product catalogue and varying profit margins, these businesses can significantly benefit from granular profit tracking.
- Businesses with Complex Product Hierarchies: Understanding the profitability of different product combinations can help optimise marketing efforts.
- Advertisers Using Smart Bidding: By incorporating profit data into Smart Bidding strategies, you can maximise ROI and drive sustainable growth.
With the power of Profit Reporting, you can make more informed decisions, improve your campaign performance, and increase your bottom line.
The Future of Smart Bidding with Cart Data and Profit Tracking
While Cart Data and Profit Tracking are relatively new features, their potential impact on Smart Bidding is significant.
How Cart Data Will Influence Smart Bidding
Currently, Smart Bidding primarily relies on click-based data to determine optimal bids. However, with Cart Data, Smart Bidding can gain a more comprehensive view of customer behaviour. By analysing the products that are actually purchased, the algorithm can:
- Identify High-Performing Products: Focus on products that consistently drive sales and conversions.
- Optimise Bidding Strategies: Allocate more budget to campaigns targeting these products.
- Refine Targeting: Improve audience targeting based on product preferences.
The Role of Profit Tracking in Smart Bidding
Profit Tracking, combined with Smart Bidding, opens up exciting possibilities for advertisers. By incorporating COGS into the equation, Smart Bidding can:
- Maximise Profit: Prioritise campaigns that deliver the highest profit margins.
- Optimise ROAS: Focus on campaigns that drive profitable growth.
- Adapt to Changing Market Dynamics: Respond to fluctuations in product costs and market demand.
As Google continues to refine its machine learning algorithms, we can expect to see even more sophisticated bidding strategies that leverage Cart Data and Profit Tracking. By embracing these features, advertisers can unlock new opportunities to improve their campaign performance and drive sustainable growth.
Need a fresh perspective? Let’s talk.
At 360 OM, we specialise in helping businesses take their marketing efforts to the next level. Our team stays on top of industry trends, uses data-informed decisions to maximise your ROI, and provides full transparency through comprehensive reports.
