Ecommerce PPC in 2025: How AI and ROAS Strategies Drive Success

As we move into 2025, AI continues to dominate conversations across industries, and ecommerce is no exception. Businesses in the UK are increasingly leveraging AI to optimise operations, and PPC campaigns on platforms like Google and Bing are firmly at the forefront of this transformation. The rapid development of AI-driven tools is reshaping how advertisers manage budgets, target audiences, and achieve strong returns on ad spend (ROAS).

How AI is Shaping Ecommerce PPC in 2025

AI has firmly established itself as an essential part of PPC campaign management. From predictive analytics to real-time budget optimisation, it’s enabling ecommerce businesses to work smarter rather than harder. For example, machine learning models can now predict how specific products will perform based on historical data, seasonal trends, and even broader market conditions. These insights help advertisers stay ahead of the curve and make data-driven decisions.

Meanwhile, smart bidding strategies, powered by AI, are allowing businesses to dynamically adjust their bids to meet specific goals, whether that’s boosting conversions or increasing visibility. This is particularly useful in competitive sectors like fashion and electronics, where getting the bidding balance right can make all the difference. And let’s not forget the role of AI in tailoring ads to individual users, which has become more sophisticated than ever. Shoppers searching for a particular product, such as “men’s waterproof hiking boots”, are now served highly relevant ads that match their intent, improving click-through rates and driving conversions.

Tackling Wasted Ad Spend

Despite these advancements, wasted ad spend remains a common issue. Many businesses find themselves overspending on products that deliver poor results while underfunding those with high potential. This inefficiency can be a major drain on budgets, especially for smaller retailers competing against larger players. One of the most effective ways to address this challenge is by categorising your products into ROAS buckets.

What Are ROAS Buckets and Why Are They Useful?

ROAS buckets are essentially a way to segment your product catalogue based on performance. Imagine breaking your products into three groups: high performers, average performers, and underperformers. For instance, a high-ROAS product might be a best-selling coffee machine that consistently generates a return of 400% or more. In contrast, a low-ROAS product might be a niche accessory with limited demand, returning less than 200%. Lets not forget your zombie products, or products that aren’t getting many impressions, these are considered “sleeping”, hence the zombie. For larger catalogues these may make up a large percentage but bucketing these within a standalone campaign will ensure that these are not forgotten and they may even move into your high or average buckets.

By grouping products in this way, you can allocate your ad budget more strategically. High-ROAS products deserve the lion’s share of your investment because they’re proven performers. Medium-ROAS products can be managed with balanced budgets to maintain profitability, while low-ROAS/Zombie items might warrant reduced bids or even be removed from campaigns altogether. This targeted approach helps to cut down on wasted spend and ensures your budget is working as hard as possible.

Lets Put This into Practice

Platforms like Google and Bing Shopping are well-suited to this strategy. Let’s take an example from a hypothetical online retailer selling sports equipment. Their high-ROAS bucket might include premium football boots that are top sellers during peak football season. These products would be prioritised with higher bids to maximise visibility and sales. In the medium-ROAS category, the retailer might include mid-range running shoes that perform steadily but don’t deliver standout results. For these, they might maintain moderate bids and look for ways to improve performance, such as bundling them with popular accessories like running socks.

Low-ROAS products, such as outdated or highly niche items like a specific model of cricket bat, would be placed in the final bucket. For these, the retailer could experiment with promotional offers or discounted pricing to improve performance. Alternatively, they might scale back advertising entirely for these products and redirect funds to better-performing ones.

AI tools make this process significantly easier by automating the analysis of product performance and continuously updating buckets based on real-time data. For example, if a medium-ROAS product starts trending due to seasonal demand, AI systems can quickly reassign it to the high-ROAS bucket, ensuring no opportunity is missed.

Why This Approach Works

Categorising products into ROAS buckets offers a range of benefits. Firstly, it improves return on investment by focusing spend on high-performing products. Secondly, it saves time and effort, as AI tools handle much of the heavy lifting, from analysing data to recommending adjustments. Finally, it provides clearer insights into your product catalogue’s performance, helping you identify areas for growth or improvement.

This approach proved highly effective for one of our key eCommerce clients Wolf 1834 during their Q4 preparation. By implementing this strategy, the client achieved record-breaking performance, delivering a 29% increase in revenue and a 13% improvement in ROAS year-over-year.

The Road Ahead

Looking to the future, AI is set to become even more integral to ecommerce PPC. We can expect tools that offer predictive analytics for new product launches, generate automated ad creatives tailored to specific audiences, and refine audience segmentation with unprecedented accuracy. Staying ahead of these developments will be key for businesses aiming to remain competitive in an increasingly crowded marketplace.

Final Thoughts

By embracing AI and adopting strategies like ROAS bucket categorisation, UK ecommerce businesses can dramatically improve the efficiency and effectiveness of their PPC campaigns. Whether you’re a small retailer or a major player, these techniques will help you minimise wastage and ensure that every pound spent delivers the best possible return. As we navigate 2025, the companies that invest in smart, AI-driven solutions will undoubtedly come out on top.

Ready to take your campaigns to the next level? Reach out to our team at hello@spaceandtime.co.uk to start your journey.