March 31, 2022
• 4 min read
Paid Search

Google Shopping ads are an excellent tool for driving targeted traffic to your business website. While you are required to list your products and supply Google’s Merchant Center with all the metadata your ad needs, that’s where your work ends. Google then uses its state-of-the-art automation to show your ads to the right customers. This helps your ad generate traffic that actually converts, boosting your sales. But how exactly does Google do it? 

Being the most popular search engine worldwide, Google processes over 3.5 billion searches every day. All of this user search data is collected and analyzed by intelligent AI-powered algorithms in order to develop user insights.

These insights tell Google what a user might be more inclined towards based on their age, gender, geographical location, and other demographic parameters. Google uses this data to run highly personalized ads where users are shown product prompts based on their preferences. This helps your business find and reach its target customer base much quicker than manually collecting and analyzing user data. 

With Google Shopping ads, you can harvest the power of Google’s world-class big data algorithms to boost your sales. Here’s everything you need to know to get started. 

What are Google Shopping ads? 

Google Shopping ads are interactive (and responsive) ads displayed to potential customers when they search for a product or related keywords on Google. These appear as a carousel of floating cards at the top of the search page. Each ad consists of a product image and metadata about the product, including item price, product description, size, retailer name and product review score. 

Google Shopping ad example
Google Shopping ad example

Once clicked, Google Shopping ads redirect customers to the product’s landing page on your business’s e-commerce website. As Google says:

“Google Shopping ads have a different, more visual format. In contrast to a text ad, which displays text only, Shopping ads show users a photo of your product, plus a title, price, store name, and more. These ads give users a strong sense of the product you're selling before they click the ad, which gives you more qualified leads.”

How do you create a Google Shopping ad?

Creating your own intelligent ad campaign with Google requires you to have a:

  1. Google Ads account
  2. Google Merchant Center account 
  3. Google Analytics account

To give you a better understanding, we have divided the entire process into two parts - Preparing and Launching. 


In this stage, we tell you everything you need to get in place before you can start your Google Ads campaign:

1. Creating your Merchant Center Account 

The first step is to create a Google Merchant Center account. Merchant Center helps you register your business with Google. You need to upload all of your product and retailer information (including metadata) that you want your ads to display.

Create a Google Merchant Center Account

This includes: 

  • Business information - Your website’s name, store’s name, business address, and a registered phone number for verification. 
  • Checkout options - Your customers can be redirected to the product’s landing page on your website or can be allowed to make the purchase on Google’s own platform. You can also make listings about in-store inventory, which will be shown to customers from nearby locations. The customers can then choose to make a same day or later pickup.
  • Linking third-party platforms - You may want to use a third-party platform to promote, list, or sell your products on Google. You can link your account on a third-party platform with your merchant center account in order to 

2. Creating your shopping product feed

Now it's time to log in and create your shopping feed. This is essentially a comprehensive list of your catalog in an Excel spreadsheet that tells Google about the products to be shown in your campaigns. 

How to create a Google Shopping feed
Create a Google Shopping feed

3. Configure shipping settings

You need to give Google the different costs and speeds of shipping your product.

Configure Google Shipping shipping settings
Configure Google Shipping shipping settings


The next stage covers everything you need to do to set up your first Shopping Ads campaign. 

1. Creating a new campaign 

Now that your products are approved, and you have configured your shipping settings, the next step is to create your first campaign inside Google Ads. All you need to do is click on the plus sign on the campaigns screen. 

Creating a new Google Shopping Campaign
Creating a new Google Shopping Campaign

  1. Select standard vs. smart shopping campaign: Standard gives you full control but with limited reach, whereas smart allows you to run the campaign on autopilot with greater reach. 
  2. Finish setup: Give your campaign a name, a budget, bid strategy, and locations to run. Now you can publish the campaign!

What are Google Performance Max campaigns?

This is a new type of campaign that will replace Smart Shopping by September 2022. This new tool maximizes your conversion value by employing automated bidding and targeting across the search engine and other Google services. It goes beyond Smart Shopping by: 

  • Showing on Discover and Maps in addition to Search, Shopping, Display, YouTube, and Gmail. 
  • Impacting existing Search Ads Campaigns. 

What are Google Shopping ads best practices?

Setting up a Shopping campaign is one thing but doing it efficiently is an entirely different ball game. To ensure you are getting the most bang for your buck, you need to go beyond simply setting up the campaign. You need to find out the elements that work so that you can boost your budget in areas that are delivering the best results.

Here are some of the best Google Shopping ads tips:

Campaign structure 

The first thing you should do is to create new product groups that are differentiated based on product attributes. Some product attributes include brand, condition, product type, and channel.

You can then start managing your campaign based on sales volume and margins. This information can be added to your campaign using labels. You can use product attributes as inventory filters to set up Shopping campaigns for different products and brands. 

Next, you can start search query level bidding. This involves running a number of similar campaigns targeting specific search terms through your campaign. 

Negative keywords 

If you identify and mark out commonly searched keywords that low-intent users search for, you can boost your results. Eliminating negative keywords helps your increase clickthrough rates (CTR) and return on ad spend.

The easiest way to find negative keywords is to go through your search terms report. This report shows you all the search queries your ads have been displayed for. You should look out for:

  • Irrelevant terms: Search terms used by low-intent users or ones that aren’t relevant to your product
  • Competitor terms: Search terms that include your competitors' names
  • Products not sold: Search terms for products you are not selling yet
  • Very generic terms: Search terms like “pants” are very generic and likely have a very low conversion rate. 

Optimize product titles

The product feed is the soul of your Google Shopping campaign. Any improvements that you make here, by adding more relevant information, will boost CTR and performance.

For instance, you can increase your CTR by including the most popular product-related queries in your product titles. 

Optimize product pricing

A campaign that performed badly could simply result from non-competitive product pricing. If you suspect this is the case, you should:

  • Identify poorly performing products and check if pricing is the issue 
  • Analyze the pricing of your competitors and see if the difference is large
  • Identify ways to bridge the gap with competitors
  • Find ways to lower your maximum CPC for the product 

If this sounds complex and you continue to struggle with setting up Google Shopping ads, it might be worth considering hiring us. We have several years of experience setting up and optimizing Google Shopping ads to ensure our clients get the highest return on ad spend. If this sounds interesting and you’d like to learn more, book a free consultation today.

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