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Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns

Google Shopping Ads: The Definitive Guide (2022) – A Brief Introduction to Google Shopping Campaigns

Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns
When running an ecommerce business, it can be difficult to get your products seen by the general public. Luckily, there are many ways to easily advertise your business in the places consumers are likely to go. Read on to learn all about Google Shopping campaigns and determine whether they might be a good fit for your ecommerce business.

Why Should You Use Google Shopping Ads?

Many people still start their product search on Google. So advertising on Google allows you to be right there where your potential customers are.

In these search results, there are text-based Search Ads, where you have to write the ad copy and add keywords manually.

But also Shopping Ads, where Google does a lot of this work for you. Its algorithms will automatically pull the data from your store, craft ads for your products, as well as match them with relevant search queries.

While Shopping Ads can take more time initially (to set up everything), they require a lot less ongoing effort afterward.

This is the main reason why I advise stores to start with Google Shopping. There is less that can go wrong compared to Search Ads, which means you’re less likely to blow through your ad budget with nothing to show for.

Reason 1: The Only Way To Rank on Top of the Google Search Results

Another big difference between Shopping and Search Ads is visibility.

Check this screenshot of a typical Google search results page to better understand what’s going on:

Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns
The Google search results

As you can see, there isn’t much room left for organic results.

But Search Ads are also getting pushed further down the page.

Shopping Ads get the premium spot in the search results as their visual format attracts most of the clicks.

More clicks mean more profit for Google, but it also seems to be working for retailers.

An increased number of retailers are moving ad budgets from Search to Shopping Ads. According to research done by Merkle, ad spend has increased by 38% on Google Shopping compared to last year, while it decreased by 12% for Search Ads.

What is Google Shopping?

Google Shopping is a marketplace that allows consumers to compare and shop for products across different retailers who have paid to advertise their products. When you type a word into the search bar on Google, the first section of the page will show you products for sale that pertain to that keyword. (You can also click on the Shopping tab to view more options and apply filters to your search.)

 

Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns
 

Google Shopping comes second to Amazon as the most popular platform where customers start their product searches. A benefit to Google Shopping is that a consumer who already knows what your product looks like and how much it costs is more likely to convert.

How does Google determine when to show your products?

Unlike with Google Display Ads, Google Shopping campaigns do not use keywords—instead, you are bidding on your actual product. You also have the ability to show what products you want to be advertised, so if there are some items you do not want to advertise, you do not have to add them to the campaign. You can also control bids on audiences, devices, and locations.

Is Google Shopping right for my online store?

While a Google Shopping campaign can be great for an ecommerce business, it is not the best investment for all companies. What makes an ecommerce store a good candidate for a shopping campaign? Consider the following factors:

  • Number of products: Google Shopping campaigns work best when your online store has at least a few hundred products to work with; however, the more the merrier.
  • Brand authority: If you are the manufacturer of the item, Google will show your items before a reseller. This is not needed, but it definitely helps with the algorithm. For example, Nike would have authority over Dicks Sporting Goods for their products since they are the manufacturer of the items.
  • Competitive prices: Low prices and/or free shipping can stick out to a consumer who is comparing multiple products from different brands. We are all looking for the best deal, and this can be the best way to stand out from the competition. If your prices are not competitive, a Google Shopping campaign will only highlight that.
  • Quality Images: Images must meet certain requirements to be shown on Google Shopping. Having more than one photo can be very beneficial. For example, if you have an image that does not meet Google’s requirements, Google can pull an image that does meet that requirement for that product from the other images provided. The general rule of thumb is to have the product displayed on a white background, but this can also depend on the industry you are in.
  • Reviews: Although this is not a requirement, studies show that 92% of people read at least one review before purchasing a product. Having high reviews of your products can help you stand out from the competition.

How do I run a successful Google Shopping Campaign?

While Google does most of the heavy lifting for you in these campaigns, one of the best things you can do is to strategize your budget, cost per click (CPC), and bidding strategy. Some industries will be more competitive than others, leading to higher CPC for your items. When it comes to bidding strategies, there are a few you can choose from, including Target ROAS, Maximize Clicks, Manual CPC, and Enhanced Manual CPC. Each one is beneficial in its own way, and it takes trial and error to determine which one will work best for your products.

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When first starting a campaign, it is important to remember that it can take time to catch momentum. Google prioritizes campaigns that have been running for a while over those that are just starting. If your campaign doesn’t immediately show results, don’t give up. Consider giving the bidding strategy about two weeks to run before evaluating its performance. This will give you a better understanding of where to increase or decrease your bidding and how to optimize your campaign.

How Does Google Shopping Work?

As discussed before, Google Shopping Ads are very different in how they work than regular Search Ads.

First, Google’s algorithms process a special file called a product feed (more on this later) that contains all of your store’s product data (things like titles, descriptions, images, price, etc.).

Google uses this data to match your products with relevant search queries as well as to create the actual ads.

People will see Shopping Ads that are relevant for their search queries, showing an image of the product, with the price and additional information (such as reviews).

If someone likes what they see, they click on your ad which will take them to your website.

In return, Google charges you for that click.

Let me show you a simple example. You sell mobile phone accessories and launch a Shopping campaign to increase your sales.

  1. You provide Google with your product data in a product feed
  2. Someone searches for “iPhone 11 wireless charger” in Google
  3. Google’s algorithms select an iPhone 11-compatible wireless charger from your store, create a Shopping ad for it, and show it to the searcher along with other ads
  4. The searcher sees the ads and clicks on yours
  5. The searcher is taken to your products page
  6. Google charges you for the click

How Much Do Google Shopping Ads Cost?

Similar to Search Ads, you pay each time someone clicks on one of your Shopping Ads.

Let’s look at the typical cost of these clicks.

Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns
Average CPCs per niche on Google Shopping – source

The image above shows the Google Shopping’s average Cost Per Click (CPC) for each of the different niches.

Overall the average CPC is $0.66, a little bit higher compared to a Google Ads average of $1.16 for ecommerce stores.

While clicks cost much less, the average conversion rate of Google Shopping (1.91%) is also lower than the Google Ads average for the ecommerce industry (2.81%).

As Shopping Ad clicks are cheaper, the Cost Per Action (CPA) is also lower, $38.87, compared to $45.27 for all Google Ads clicks.

While these statistics here show the averages for Google Shopping, the REAL performance of your Shopping campaigns is in your hands.

Out of the box, Google Shopping campaigns may perform worse than regular Search Ads, but with the right tweaks, there’s plenty of room for improvement.

How to Add Your Products to Google Shopping?

Your first step to start advertising on Google Shopping is to turn your store’s products into Shopping ads. This process consists of four elements:

  1. Your store and products
  2. Your product feed
  3. Google Merchant Center Account (GMC)
  4. Google Ads Account

All these parts are connected and help Google Shopping Ads to work efficiently.

I like to call this whole process the “Google Shopping Puzzle” as it can be a puzzle for someone going through this the first time.

In the next sections, I’ll show you how to add your products to Google Shopping.

Pro tip: If you need more detailed instructions, check out our in-depth Google Shopping setup tutorial.

Step 1 – Creating Your Product Feed

The product feed is the heart of your Google Shopping campaign. In essence, it is is a big spreadsheet that contains your product data.

Google is pretty strict about what information to include and what format to put it in. That’s why it is pretty easy to mess up something when creating it.

When that happens, Google will disapprove those products and you’ll not be able to advertise them. But if you fix the errors by adjusting your product data, you’ll be able to advertise again.

Basically, there are two approaches to creating your product feed for Google Shopping Ads: generate the feed by using an app, extension, or tool, or do it manually by creating a spreadsheet.

If you are on one of the major ecommerce platforms (Shopify, WooCommerce, Magento, etc.), you can download an app to speed up your product feed set up.

Let me share with you the best apps for each platform:

Shopify

Google Shopping app – link – Despite the poor ratings, the official Google Shopping app for Shopify works like a charm (they made plenty of changes to it recently).

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Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns
Google Shopping app on Shopify

Pro tip: Stay away from choosing the “Smart Shopping” option when configuring the app (more on Smart Shopping later).

WooCommerce

  • WooCommerce Product Feed PRO – link
  • WooCommerce Google Feed Manager – link

Magento

  • Google Shopping – M2 (paid – Magmodules) – link
  • Simple Google Shopping – M2 (paid – Wyomind) – link

BigCommerce

  • Sales&Orders (BigCommerce partner) – link
  • DataFeedWatch – link
  • GoDataFeed – link

While Google automates a large share of the work, the apps and extensions I’ve listed here help you to export your product data feed and usually they will tell if there’s something wrong with it.

If the product feed you get from your ecommerce back-end isn’t in great shape, you might need to make some extra changes before uploading it to Google Merchant Center.

This in-between zone is covered by product feed management tools. Here are a few examples:

  • Channable – link
  • GoDataFeed – link
  • Sales&Orders – link
  • DataFeedWatch – link

Step 2 – Setting up Google Merchant Center

After your feed is ready, you can create a Google Merchant Center account.

When you are done with that, you have to claim and verify your store’s domain to prove that you own it. You can do this using Google Analytics, Google Tag Manager, or adding a meta tag to your website.

If so, then you can skip this section.

If not, you have to do this manually. Click “Products” then “Feeds”.

Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns
Adding a product feed in Google Merchant Center

To add a new product feed, click this big blue + button. You’ll be guided through the whole process.

When you’re done and Google has processed your feed, head over to Diagnostics to see its health.

Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns
Product feed health in Google Merchant Center

When first uploaded, most product feeds have a few errors at least.

Don’t be scared by this, but follow the instructions to clear the most urgent ones (the red ones). Don’t put this off because neglecting to provide any fixes could result in an account suspension.

To guide you through clearing those errors, I’ve created an in-depth guide to fix Google Shopping product feed errors efficiently.

In addition to uploading your product feed, you have to supply Google with your shipping and/or tax details.

Configuring Shipping Settings

Google needs to know the shipping costs to make an accurate price comparison with other vendors.

You can configure this in Google Merchant Center.

Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns
Shipping and returns settings in Google Merchant Center

To do that, click the wrench icon in the top bar, inside select “Shipping and returns”. There you can create a new shipping service where you can define your shipping costs. Anywhere from a flat rate, depending on the order size or integrate with carrier pricing like FedEx or UPS.

Configuring Tax Settings (US Only)

Configuring sales tax only applies if you are selling within the US. If you’re not, you can skip this part.

Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns
Configuring tax settings in Google Merchant Center

To find this menu, click the wrench icon in the top bar, and select “Tax”. There you can set up different tax rates depending on the state you’re located in and selling to.

Bidding in Google Shopping

Since Google Shopping charges for every click, you want to make sure that each click contributes to your results.

But how do you make sure that you’re not wasting money on your Shopping campaigns?

Obviously, keeping your max CPCs low prevents you from spending too much overall.

But if your bids are too low, Google won’t show your ads that often.

So, you have to find a good balance between staying cost-efficient and receiving decent traffic on your Shopping ads.

But how much money should you start with?

We’ll explore this question in the next section below.

Always Start Small

If you’re new to Google Ads, or you’re launching your first Shopping campaign, I always recommend to start out with very low bids.

The reason for this is simple.

When starting out, you will always make mistakes, and since every mistake costs you, it’s better to keep your ad spend in check.

While starting with a low bid can’t really hurt your campaign, an initial high bid could spend the budget you had set aside for testing.

To ensure that your Google Shopping campaign is profitable, you need to first focus on the QUALITY of your traffic, not the QUANTITY.

High-quality traffic means good CTRs, low bounce rates, decent conversion rates, and better profit margins.

Once you are sure that your Google Shopping Ads traffic is high-quality, then you can scale your campaign by increasing your bids.

Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns
The Google Ads Bid Simulator can help scale your campaigns

Pro tip: If you’re curious about how your campaign can scale, check out Google Ads Bid Simulator.

Sacrificing Control vs. Time

When deciding how much you want to pay for each click, you have two options: use manual or automated bid strategies.

Manual CPC gives you the most control as you can a specific bid on a product group or even product level.

If you have hundreds of products, manual bidding can be a time-consuming process as it requires you to manage and optimize your max CPCs based on data coming on.

That’s why Google has introduced automated bid strategies that utilize algorithms and machine learning to automatically adjust your bids based on your goals and historical data.

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Here are some examples of automated bid strategies you can use for Google Shopping campaigns:

  • Enhanced Cost-Per-Click (eCPC): Based on the likelihood of conversion for each click, eCPC either decreases or increases your manual CPCs with the goal of increasing conversions.
  • Maximize Clicks: Uses your budget to set bids automatically to get as many clicks as possible on your ads.
  • Target Return On Ad Spend (Target ROAS): The goal of this strategy is to maximize your conversion value while reaching your desired target ROAS.

When talking about automated bidding, I find it important to mention the obvious conflict of interest that Google has.

On the one hand, they claim that they will get you the best possible results from your ad budget.

But on the other hand, they are a business looking to make as much money as possible.

So it’s up to you as an advertiser to keep this trade-off in mind as you go along and do things that are suggested by Google.

Pro tip: Start out with Manual CPC and gather baseline data. If you want to go automated, then experiment with Enhanced CPC first (as it allows for the most control among automated bid strategies), compare your results to the baseline, and evaluate other automated strategies in the same way.

Bidding strategy can become a complex topic, so if you’d like to learn more, check out my in-depth guide on bid strategies in Google Ads.

Google Shopping Bid Adjustments

The products you are selling, your industry, as well as your target audience and location, can all influence how much a click is worth to you.

If you are selling lawnmowers, it might not be profitable to show Shopping Ads to people living in apartment buildings in the middle of the city. It might be more profitable to target suburban locations instead.

The same can happen with:

  • The hour of the day
  • The day of the week
  • The device searchers use
  • Your target audience

With the help of bid adjustments, you can adjust your CPCs (up or down) according to your needs, which helps you in spending your budget more effectively.

You can set bid adjustments for your Shopping campaign for Locations, Ad schedules, Audiences, or Devices.

You do this by setting a percentage value for bid adjustments.

For example, if you want to attract more mobile visitors, you may decide to set a +20% bid adjustment, which increases your standard bid by 20% (e.g., from $1 to $1.20).

Using Audiences for Google Shopping Ads

Using Audiences, you’re able to target people that have been on your website but left without a purchase.

This is called Remarketing Lists for Search Ads (RLSA) and allows you to increase (or decrease) your max. CPC based on what other information you have about a certain visitor.

Someone that has abandoned her cart might be a lot more valuable than a product page visitor. Through Audiences, you’re able to adjust your bid accordingly.

To use an Audience in your Google Shopping campaigns, you need a minimum of 1,000 people in that audience.

That’s quite a lot of people. So while you could create a specific campaign to exclusively target these visitors, very often these Audiences are added to existing campaigns.

To see this in your Google Ads account, navigate to the “Audiences” menu that you can find on the left side of the page.

Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns
Adding Audiences to your Google Shopping campaign

In case you don’t have any audiences yet, click the plus icon in the middle to add a new one.

When adding new audiences, you can add them in two ways: targeting or observation mode.

Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns
Targeting vs observation on Audiences in Google Ads

Targeting: only targets people that are part of the audience that you select. You’ll only use this option if you’re creating a specific campaign to target these audiences.

Observation: this option doesn’t limit the reach of your campaigns, but you’re able to increase or decrease the max CPC based on people being part of this audience.

In case you don’t have at least 1,000 people on the lists you’ve added, then you’ll get a notification from Google.

Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns
Notification indicating your audience is too small

If you have enough traffic, these warnings should go away.

Once you’ve selected your ad format and chosen a name for your product ad group you’re pretty much done! As Google already has all your product details thanks to the product feed you have no need to upload images, write descriptions or select keywords.

If you don’t want all of your products to have ads for them or would specifically like to only advertise some of your products then you can specify which products you would like in your campaign. Simply go to the “Product Group” section of the campaign and select which products you would like to be excluded.

Google Shopping Ads: The Definitive Guide (2022) - A Brief Introduction to Google Shopping Campaigns

A great way of controlling your budget, and ensuring that your higher value products receive more exposure is to create multiple campaigns. Separating your products either by the product type, or by “High priority” or “Low priority” products. Setting up new shopping campaigns now should be easy.

So, get going and start using one of the most effective campaign formats for selling products.

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