Google Shopping

How to Dominate Google Shopping Ads: The Definitive Guide (2023)

74 · by Dennis Moons · Updated on 13 June 2023

Most of the money online stores spend on Google Ads is funnelled to Shopping Ads.

Consumers also love them because they can immediately see if you have the product you’re looking for. So when they do click, there is a high chance to convert that customer.

So if you want to join the fun, here are 2 ways you can get your products showing as a Shopping Ad. Those are Standard Shopping or Performance Max campaigns.

In this very comprehensive guide, I’ll show you what to pay attention to when you’re getting started, how to decide which campaign type you should pick, and what you can do to get better results;

I’ll cover everything from setup to optimization and share additional resources that allow you to refine your Google Shopping campaigns even further.

Let’s get started!

What Is Google Shopping?

Google Shopping is a comparison shopping engine, which is a service that allows retailers to advertise their products to searchers in a visually appealing way.

This means if someone searches for a product that you sell, Google will show relevant Shopping Ads for your products, and those of your competitors.

If the user clicks on your ad, Google will take them right to the product page:

Example of Google Shopping Ads

The image above shows product ads (also known as product listings or PLAs) for the Google search query “jordan one white” on the top of the page.

A Google Shopping ad includes an image, the product title, the price, the name of the retailer and sometimes some retailer-specific information like shipping costs or reviews.

3 Reasons Why You Should Use Google Shopping Ads

About 32% of consumers start their product searches on Google.

And for these types of searches, Shopping Ads are the best way to advertise your products.

Let’s look at three other 3 reasons.

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:

A typical Google search results page

Above the fold, it’s all advertising. Shopping Ads get the premium spot and Search Ads are getting pushed further down the page.

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

US retailers are now getting 54% of their Google Paid Search clicks from Google Shopping:

Google Shopping share of Google Paid Search Clicks – Image source: Merkle

Google Shopping Ads now accounts for 65% for all Google Ads clicks and for 89% of non-branded Google search ad clicks of retailers.

Shopping Ads have also been more profitable in the same period, netting advertisers 12% more revenue per click than Search Ads on the desktop for non-branded keywords.

Reason 2: Show vs. Tell

If you were looking to buy new Nike Air Max shoes, would you rather click on the Nike Search Ad or one of the Shopping Ads?

While Nike did a good job with the Search Ad, it has a hard time communicating all of the info that a simple picture can.

Shopping Ads can also help when consumers aren’t exactly sure what they’re looking for. Many of them use it as a research tool to learn about different product types, models, colors, prices, as well as the stores they can purchase them from.

Reason 3: Intent vs. Interruption

For most of its history, advertising was interruption-based.

Meaning that you were doing something else, like watching a YouTube video, when a video ad pops up:

purple mattresses youtube ad example
YouTube Ad by Purple Mattresses

When this ad by Purple showed up, I had no intent to buy a new mattress. But I might at a later point in time. And maybe this ad will help them be top of mind when I do.

Compare that to Shopping Ads, which are intent-based. Meaning that the ads show when people are actively looking for a solution.

If I’m searching for “Womens Nike Air Max 270” and you’re selling this exact shoe at a good price, this is a highly lucrative ad slot:

For these types of ads, click-through rates and conversion rates are a lot higher.

That’s reflected in the cost of a click on a Shopping Ad. A view of a YouTube Ad might only cost a few cents, while a click on a Product Ad can easily cost 10x more.

If all of this has piqued your interest, let’s have a look at how Google Shopping ads actually works.

How Does Google Shopping Work?

Unlike Search Ads, Google Shopping doesn’t use keywords or written advertisements.

Instead, Google uses a file that you provide called a product feed (more on this later) which contains all of your store’s product data (things like titles, descriptions, images, prices, etc.).

2 Campaign Types That Power Google Shopping Ads

Inside of Google Ads, there are 2 campaign types that power Shopping Ads:

Note: Performance Max replaced Smart Shopping in September of 2022. After that date, all Smart Shopping campaigns were upgraded to Performance Max.

We’ll look closer at which of these campaign types is right for you later in this article.

But the way they show Shopping Ads is very similar.

Both campaigns leverage the product feed to match your products with relevant search queries as well as to create the actual ads.

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.

How Much Do Google Shopping Ads Cost?

Similar to Search Ads, you pay each time someone clicks on a Google Shopping Ad.

The average Google Shopping Cost Per Click 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 Ads 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 ads campaign is in your hands.

How to Add Your Products to Google Shopping?

To get started with Google Shopping, you need to have 4 pieces in place:

  1. Your ecommerce platform: with all details about your products
  2. Your product feed: how you tell Google about your products
  3. Google Merchant Center account: free tool to make your products available for Google Shopping
  4. Google Ads Account: where you’ll create your Shopping campaigns

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

The part that creates most problems is the product feed. Especially if you haven’t worked with feeds before, it can be confusing how this exactly works.

So n 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 tutorial on Google Shopping setup.

Step 1 – How to Create Your Product Feed

The product feed is the heart of your Shopping Ads campaign. In essence, it 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 of 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.

There are two main approaches to create a Google products feed:

  1. Generate it automatically using an app, extension, plugin or tool
  2. Manually create a spreadsheet

I highly recommend to go with option #1. Especially if you’re using a popular ecommerce platform (Shopify, WooCommerce, Magento, etc.), you have plenty of options to choose from.

Some of the tools linked below are paid, but in most cases it’s only a small amount that far outweighs the trouble if you decided to get with the free option!

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

Product feed apps for Shopify

There is no shortage of Shopify apps to help you manage your product feed:

Over 1,364 product feed apps on Shopify!

Here are our favourites:

  • Google channellink: the official Google channel on Shopify. Syncs your products and configures Google Analytics 4
  • Multifeeds for Google Shoppinglink: easily manage your products with multiple feeds
  • Simprosys Google Shopping Feedlink: manage all your products in a single feed
  • Nabu for Google Shopping Feedlink

Product feed apps for WooCommerce

  • API Feed for Google Shopping – link
  • WooCommerce Product Feed PRO – link
  • WooCommerce Google Feed Manager – link

Product feed apps for Magento

  • Google Shopping – M2 – link
  • Simple Google Shopping – M2 – link

Product feed apps for BigCommerce

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

While Google automates a lot of the work, all the tools listed above will help you troubleshoot and fix problems with your feed.

Data feed tools

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 Account

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

When you are done with that, you need 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.

Uploading Your Product Feed to Google Merchant Center Account

You’re now ready to upload your product feed to Google Merchant Center.

In the left hand menu of your Google Merchant Center account, click “Products“:

Then, click “Feeds

This will show you the overview of all the products feeds that are connected with your Google Merchant Center account:

Next, we’ll check if your ecommerce platform is already connect to Google Merchant Center.

Check if your feed name is “Content API“:

This is for example what you’ll see if you’ve installed an app on Shopify to create your feed.

In that case, your product data will be automatically sent and updated, so you don’t need to add any product feeds.

If you don’t have any API-powered feeds connected yet, you’ll have to manually add the feed:

To do that, click the big blue + button:

Next, google will guide through the whole process. (If you’d like more detailed help, check out this tutorial)

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

When you first upload your feed, it’s normal that there are errors or disapproved items.

Don’t be discouraged if this looks intimidating. Just follow the instructions to fix the most urgent ones (the red ones).

Start fixing things right away. Don’t postpone this because neglecting to provide any fixes could result in Google Ads account suspension.

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

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 the exact shipping details in Google Merchant Center Account.

To do that, click the gear icon in the top bar, inside select “Shipping and returns“:

Then, 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:

Shipping settings in Google Merchant Center

Configuring Tax Settings (US Only)

If you are selling to the United States, you need to configure the sales tax settings. If you’re not targeting the US, you can skip this section.

To start this menu, click the gear icon in the top bar, and select “Sales tax”:

There you can set up different tax rates depending on the state you’re located in and selling to.

I’m no tax expert, so be sure to check the local sales tax regulations in the states you’re doing business in!

Step 3 – Create a Google Shopping Campaign

Over the last few years, Google has added new campaigns types, removed others and changed the names of how campaigns are called, so let me start this section by breaking it down as simple as I can:

There is no such thing as a “Google Shopping campaign”.

Instead, there are 2 campaign types that can show Shopping Ads:

  • Standard Shopping campaigns
  • Performance Max campaigns

These are very different campaigns, so let’s start by looking at the difference between the two.

Standard Shopping vs. Performance Max

 Performance MaxStandard Shopping
PlacementsSearch Network, Display Network, YouTube, Gmail, Discovery & MapsSearch Network (with Search Partners)
ReachVery wideLimited
Bid strategyMaximize Conversions or Maximize Conversion Value (with optional targets)Target ROAS, Maximize Clicks, Manual CPC, Enhanced CPC
Level of controlLowVery high
Conversion volume requirementsMin 50 conversions / monthNone
Campaign transparencyLowHigh
Optimization potentialMediumVery high
Dynamic Remarketing includedYesNo
Impact on Search campaignsYesNone
Comparison table between Performance Max and Standard Shopping

As you can see from the table, each campaign type has it’s own pros and cons. That also means that there is no single best approach for every situation.

For the sake of this article, the most important difference between Standard Shopping and Performance Max is that the latter isn’t just limited to Shopping Ads. It spans a lot of other ad types.

In what follows, I’ll create a Standard Shopping campaign.

But be sure to read our Performance Max guide if you’d like to learn more about that campaign type.

Here is how you create a Standard Shopping campaign from the Campaigns tab:

First, click the big blue plus sign.

creating a new google shopping campaign
Creating a new Google Shopping campaign

Select the “Create a campaign without a goal’s guidance“, then select “Shopping” as the campaign type:

Follow the different steps listed on the page.

Then at the bottom of the page, switch “Performance Max” back to “Standard Shopping campaign“:

Follow the steps in the setup and adjust all the other settings for your Standard Shopping campaign.

google shopping campaign settings
Google Shopping campaign settings

This includes giving your campaign a name as well as a budget ($10/day is a good start), bid strategy (pick Manual CPC for now), and the locations where you want to show your ads.

To learn more about each setting in detail, have a look at this article I wrote on Google Shopping setup.

After you’ve configured the ad group, fill out the additional settings and hit “Save” at the bottom of the page to create your campaign.

Now, your new Standard Shopping campaign is created, you’ll have one campaign, one ad group, and one product group.

That’s a solid start, but to get great results, you’ll need to do more. Read on to discover the best practices.

But before we do that, I want to clear up something that confuses a lot of people.

Going Deeper on Shopping Campaigns

While this guide is a big one, it barely scratches the surface of what it takes to win with Google Shopping.

That’s exactly why I developed our Google Shopping Success course.

It covers everything I’ve learned from running these campaigns for the past 12 years, and much more.

If you want to learn more, I’d love for you to check it out!

On with the article 👇

Google Shopping Best Practices

To get profitable results from your Google Shopping campaigns, you need to do more than just setting them up.

You need to discover the parts that work and put more budget behind them while cutting back ad budget in the parts that aren’t generating results.

So, in this section, we’ll explore different best practices for Google Shopping that can take your Google Shopping from losing to making money.

Because there are now 2 campaigns types that can serve Shopping Ads, I’ll make it clear if certain optimization tactics is specific to either campaign type.

Google Shopping Campaign Structure

Using a good Google Shopping campaign structure is one of the biggest optimizations you can make.

Improving the structure sounds a bit abstract, so let’s take a look at what this actually means.

Continuing the example from before, we have set up a Standard Shopping campaign that looks like this:

  • One campaign
  • One ad group
  • One product group

This means that we’re bidding the same amount per click no matter the product or search query.

So the first step to increasing control over your bids is to create new product groups using product attributes.

Google Ads gives you a bunch of default criteria you can use like brand, product type, or even the Item ID.

Product criteria you can use to split up your products groups

This is a good start. But it becomes really interesting when you start to manage your campaigns based on information like sales volume or margin. You can add that information to your campaigns through custom labels.

You can also use those same product attributes as inventory filters to set up different campaigns for a specific brand or product type. Mimicking your websites’ structure is often a good way to organize your campaigns.

When that’s done, you’re ready to implement one of the most effective Google Ads best practices, something called search query level bidding.

With this approach, you run multiple campaigns with the same products that allow you to target specific search terms with your Shopping campaigns.

search query level bidding branded vs generic campaigns
Search query level bidding in Google Shopping

In the screenshot above, you can see two Google Shopping campaigns. One targets branded search queries, while the other one only shows generic search queries. This allows you to have separate bids.

Notice the difference in CPC, number of conversions and the conversion value in that screenshot.

Pro tip: You need to tweak your Google Shopping campaign priority settings for keyword filtering to work efficiently with the Search Query Level Bidding structure.

Improving the structure of your Shopping will increase control.

But increased control comes at a price. More granular campaigns will take more time and make it a little more complex to set up and manage.

If you’re running Performance Max campaigns, the words might be different: listing group vs product group, asset group vs ad group, but many of the underlying choices are the same:

  • Do you create one or more Performance Max campaigns
  • How many asset groups do you have? What targeting are you using for each one?
  • How are you subdividing your listing groups?
  • Etc.

Google Shopping and Negative Keywords

If you use negative keywords, you prevent your ads from showing up for irrelevant and low-quality traffic that hurt the performance of your campaigns.

By doing this, you can increase your CTRs, conversion rates, and eventually your ROAS.

Hunting for negative keywords in the Search Terms Report

If you’re using Standard Shopping campaigns, you can find negative keywords. The easiest of those is to sift through your Search Terms Report.

This Search Terms Report shows you all of the search queries your ads have appeared for including their performance.

When going through this report, you’ll want to look out for types of negative keywords.

  1. Irrelevant terms: Search queries that clearly are a waste of money.
  2. Competitor terms: Branded search queries that include your competitors’ names. It may be tempting to try and outrank them at first. But these ads often are ineffective and drag down your performance instead. Either add them as negative keywords or analyze whether it is profitable for you to rank for these terms.
  3. Products not sold: these are searches for products you aren’t selling (yet). You can either exclude these keywords or use them for market research.
  4. Very generic terms: This group contains very generic terms (e.g., shoes) that usually have very low CTRs and conversion rates. If you want to improve your profitability, I recommend excluding them as negative exact match keywords. Otherwise, feel free to (carefully) experiment with these queries.

If you’re using Performance Max campaigns, you can use the Search terms insights to see what kind of search queries you’re ads are showing for:

There currently is no way to add campaign-level negative keywords through the interface. You can only add an account-level negative keyword list.

If you do have certain keywords you want to exclude form Performance Max Ads, you can contact Google support to help you.

If you want to know more about how to find and organize negative keywords, check out my in-depth guide on negative keywords.

Google Shopping Bid Stratgies

There are two ways to decide how much you want to pay for each click:

  1. Manual bidding
  2. Automated bidding

Automated bidding strategies are available for both Shopping campaign types, while the manual bidding options only work with Standard Shopping.

Manual bidding

Manual bid strategies like Manual or Enhanced CPC, are great to get started.

You get to decide how much you want to pay for each click. This extra control is both a blessing and a curse.

It’s great because it let’s you set a specific maximum cost per click for a product group or even a specific product.

But if you have hundreds of products, keeping track and changing of individual bids can be a time-consuming process.

So if you’re starting out, what should you set your bids to?

If you’re new to Google Ads, or you’re launching your first Standard 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 budget 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 Standard 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 and budget.

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.

Automated bidding

At some point , you might want to try out one of Google’s automated bid strategies. These use algorithms and machine learning to automatically adjust your bids based on your goals and historical data.

Here are the automated bid strategies you can use for Google Shopping campaigns:

  • Maximize Conversions with optional target:
  • Maximize Conversion value with optional target:
  • Maximize Clicks: Use your budget to set bids automatically to get as many clicks as possible on your ads. (Standard Shopping only)
  • 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.

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.

Using Remarketing Audiences with Google Shopping Ads

Retargeting that have already visited your site can be really effective.

So when it comes to Google Shopping Ads, you want to be sure that your campaigns leverage the Remarketing audiences in your account.

When it comes to adding those audiences to your campaigns, there is a big difference at how Standard Shopping and Performance Max use them.

Audiences in Standard Shopping

In Standard Shopping, you can add audiences segments to your campaigns.

To see these for yourself go to your Google Ads dashboard, navigate to the “Audiences” tab in the middle menu:

adding audience google shopping
Adding Audiences to your Standard 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 audience segments, you can add them in two ways: targeting or observation mode.

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 (recommended): this is the right option in almost all cases. It 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.

If you’re using manual bidding, you’re able to increase (or decrease) your max. CPC based on what other information you have about a certain visitor. (This feature is called Remarketing Lists for Search Ads or RLSA).

Bid adjustment for a Remarketing audience segment

If you’re using an automated bidding strategy, Google will automate the process of bidding more or less for certain visitors automatically.

So no need to make bid adjusments, or even need to add these audience segments to your campaigns.

because by default, automated bidding also called Smart bidding will use all of the audiences in your account to improve results.

Audiences in Performance Max campaigns

Performance Max also uses Smart bidding, so that means that Google will automaticall use all audiences available in the audience manager.

But can steer Google’s efforts. When you’re creating an asset group, you can also add an Audience Signal.

This is an audience that is combination of multiple audience segments:

Many advertisers mix up audiences and audience segments. That’s kind of Google’s fault for switching names a bunch of times.

But in the image above, you can see the an Audience combines custom segments, your own data, and other characterstics.

The interesting things about Performance max is that this audience selection indicates where Google will start with it’s optimization efforts.

As time goes on, and your campaign has more data, Google will go beyond these audiences to find more relevant buyers.

Optimize Your Product Titles

As mentioned before, your Google product feed is the heart of the your Google Shopping Ads. No matter which campaign types you use, product data feed optimization works like magic for both!

This also means that any improvements you make by providing more relevant information will increase the CTR and improve your campaign performance.

Fortunately, there are plenty of optimization techniques you can use to improve results.

You could, for example, increase your ad click-through rate by including the most popular product-related search queries in your product titles.

In our own research we found a 147% increase in impressions, and a 67% increase in clicks, just from optimizing our product titles!

Results from our product title optimization experiment

Discover more tips in this video:

Optimize the Price of Your Products

In case you’re getting low CTRs and low click shares on some of your products, it could mean that their pricing isn’t as competitive as what other stores offer.

If you’re advertising the exact same products, it’s not hard to imagine that people will click on the ad with the lowest product price.

The easiest solution is to drop your prices. But not all of us can afford, want or even are allowed to do so.

Instead, here are things you can do to make better use of product pricing in Google Shopping.

  1. Identify the products that perform poorly (CTRs, conversion rates, impression shares, etc.) and check if the price might be an issue.
  2. Take a look at the prices of your competitors for those products and see whether there are big differences in the pricing
  3. If there is a significant gap, are you able to bridge it in any way?
  4. If not, consider lowering your max CPC for this item as it will be hard to compete and advertising on it might be wasteful

Pro tip: Google considers the total purchase cost, so if you can’t lower the actual product prices, make sure to check whether you can do something to decrease or eliminate the shipping costs.

Optimize Your Product Images

Product images are a crucial part of your ads.

Some stores come up with slight variations of a product image, allowing them to stand out and increase the CTRs of their Google Shopping Ads:

ASOS images stand out in Google Shopping
ASOS’s product images stand out from the other Shopping Ads.

While this can be a rather expensive process (especially if you have hundreds of products), sometimes doing simple things using a different type of image (like in the screenshot above) can already make a difference.

Pro tip: this section has covered the basics, to learn more check out my guide on Google Shopping optimization.

What to Expect From Google Shopping Ads?

If you’re new to Google Shopping, it’s always hard to know what to expect.

So, in this section, I’ll show you what to expect when starting out, what is possible, and how to get there.

What To Expect

When you are starting out with Google Shopping Ads, you won’t get the best results with your campaigns out of the gate.

But that’s perfectly fine as there’s always more room for improvement.

With time, you’ll have access to more data, which you can use to optimize your Shopping campaigns.

But before doing that, let me show you what you can expect from Google Shopping Ads when you are just starting out.

average ecommerce google ads clickthrough rate
Average CTR in Google Ads

As you can see in the image above, there’s a HUGE difference between how the campaigns of various advertisers perform in Google Ads.

While low-performing advertisers have an average CTR of 1.91%, the best ones (in the 90th percentile) have nearly 5x their click through rates.

As you are just getting to know Google Shopping, you should expect your CTR to be somewhere near the 25th percentile, use > 2% as a rule of thumb.

average ecommerce conversion rate by channel
Average ecommerce conversion rate by channel

In the screenshot above, you can see that the average advertiser has a conversion rate of 1.42% for Google Ads while top performers are hitting over 3%.

So what do these metrics mean for you? Let’s see through an example.

Let’s say you are selling $50 sunglasses with Shopping Ads.

As you’ve just started out, let’s take the lowest-performing metrics that I’ve mentioned above as well as the average Shopping CPC.

This means that you’ll have a 1.91% CTR, a 1.42% conversion rate, and you pay $0.66 per click (Google Shopping Ads average).

Let’s say that 50,000 people have seen your ad in the first month, of which 955 have clicked through to your website.

That means a total ad cost of $630.3 as well as 14 conversions resulting in $700 in revenue.

If you factor in the product cost, $20 per pair of sunglasses or $280 in total, you’re selling at a loss.

$700 in revenue minus $280 in product cost and $630.3 in ad budget, means a loss of $210.3.

This shows the importance of having the fundamentals in place before starting with ads. (To see if your store has potential with Google Ads, check our quiz!).

Let’s see how you can turn this around.

What Is Possible With Google Shopping Ads

After a while, you’ll get better at running ads. You might have learned new techniques, followed a great course and learned which parts are performing well.

We’ve used the lowest benchmarks to start with, but let’s say that your results have improved, and you’re now at the upper end of the benchmarks.

That means a 9.5% CTR, a 3.05% conversion rate with the average CPC staying at $0.66.

Continuing with the $50 sunglasses example and 50,000 ad impressions a month, 4,750 people have now clicked on your ad, resulting in a total ad cost of $3,135.

Due to the increased CTR and conversion rate, you’ve netted 145 sales through Google Shopping Ads, which means a revenue of $7,250 as well as a product cost of $2,900.

But, in this case, your revenue outweighs your expenses with your gross profit being $1,215 ($7,250-$2,900-$3,135=$1,215), a profit margin of 17%.

There is not a lot of room, but you can see that these improvements can really move the needle.

Benchmark Against Competitors

Another way to figure out what’s possible is to see how your Standard Shopping campaigns are performing compared to those of your competitors. (You can’t see this info for Performance Max)

You can find part of that information in the Competitive Metrics columns in Google Ads:

google shopping competitive metrics
Competitive metrics in Google Shopping

If you’re looking at your Google Shopping Ads campaign, you can add the “Benchmark CTR“, “Benchmark Max. CPC”, “Benchmark product price difference“, and the “Average product price” columns from the “Product Groups” overview.

Don’t focus blindly on these metrics, rather use them as indicators to see how you’re doing.

The great thing about Google’s benchmark metrics is that they are available for every product group you have in your Shopping campaign, so you can get insights for each.

What Does it Take to Achieve Success With Google Shopping Ads?

To achieve what I’ve described above, you need two essential resources: time and an advertising budget.

You need time to set up Google Shopping Ads (converting your products into product ads), as well as to maintain and optimize your Shopping campaigns.

And don’t forget: the more granular you go with your campaign, the more time you need to spend managing them.

As we’ve discussed before, Google Shopping Ads cost you money. So you should have some money allocated to run Shopping Ads. If it’s your first time around, try to set aside at least $300-$500 as your learning budget.

You’ll use this money to learn how Google ads work, as well as see what the visitors from Google Shopping Ads do on your website.

Mastering Google Shopping Ads

My goal with this article was to provide you a detailed overview of what Google Shopping Ads are and what it takes to make them work for your business.

By learning how Google Shopping Ads work, how to set them up, and optimize them, you have taken your first steps towards launching your product ads.

However, your Shopping journey doesn’t need to stop there.

I’ve included further resources for all essential parts of Google Shopping Ads in this article (all the links and downloads sprinkled throughout this article), which you can use to learn more about each topic.

If you’d like to learn even more, check out Google Shopping Success: our premium course on Google Shopping Ads.

In a series of video lessons, the course will take you through the exact steps you need to create a Shopping campaign from scratch right to having your first sale coming in via product ads.

Our main goal with the course is not only to answer the questions of “what”, and “how,” but also the “why” too, explaining the real reasons behind each step you need to take in your Google Shopping Ads journey.

Dennis Moons

Dennis Moons is the founder and lead instructor at Store Growers.

He's a Google Ads expert with over 12 years of experience in running Google Ads campaigns.

During this time he has managed more than $5 million in ad spend and worked with clients ranging from small businesses to global brands. His goal is to provide advice that allows you to compete effectively in Google Ads.

Follow him on Twitter or LinkedIn.


74 responses on "How to Dominate Google Shopping Ads: The Definitive Guide (2023)"

  1. Adela says:

    Very useful! 😀

    1. Dennis says:

      Thanks Adela!

  2. AM says:

    Hi i was wondering what happened with apes in space?

    1. Dennis says:

      It’s still up and running (around break-even). It’s not at the level to justify spending a lot of time on it.
      It needs more work to be successful, maybe in 2020 🙂


    Hi! Dennis, I have a general dropshipping product store which includes mix products like home & garden, outdoor, gadgets, electronics, etc. I want to test 40-50 different products on google shopping. What campaign structure should I use? Can I test all of them in a single campaign with different product Id level bidding? or should I make multiple campaigns with 8-10 products in each campaign?
    Earlier I tried to test all in one campaign but many of them don’t even get the impressions and google spends most of the budget in only few products. Any advice from you is valuable for me and appreciated.

    1. Dennis says:

      Hi Suboh,
      The best account structure allocates the right budget to the right products. That means:

      1. Focuses the largest part of your budget on the products that generate the best results (# sales/revenue/profit)
      2. Makes sure they all have room to spend: find a balance between budget, CPCs and visbility

      Since you’re still testing products, you won’t have #1. That makes it so much more important to get #2 right.

      The most important issue would be to make sure no product dominates a certain campaign/budget. It’s hard to test 40-50 products at the same time, so I’d start with a catch-all campaign that has all of the products, with a specific budget and low bids.

      Next, I would test specific products or (sub)categories by putting them into their own campaigns.

      That means your structure will keep evolving as you keep testing.

      I can’t predict what that end-state will look like, but it will probably look very similar to other accounts. These can be organized in different ways:

      • Campaigns per brand
      • Campaigns per product category
      • Campaigns for overall or specific category bestsellers & rest sales volume.
      1. Very helpful article to hone your Shopping Advertising skills. Thanks for sharing such informative and easy to understand article.

        I was also seeking the same information. Here my searching ends.

  4. Mike O'Brien says:

    Cracking article. Really useful. Many thanks.

  5. Chirag says:

    Hi Dennis,

    Article was awesome but really I am not more clear how to setup all things perfectly.

    Actually I am doing this first time.

    I have Women Clothing Online Shop from India. Is it great to run Google Shopping Ad? It’s give business from that ???

    Let me know so I can setup everything for this thing. Actually I have Woocommerce shop.

    1. Dennis says:

      Hi Chirag,
      Those are two very different questions 🙂
      1. Are Shopping Ads worth it? It depends on your store. But I’ve seen women fashion stores do very well. So it’s definitely possible
      2. How to do the exact setup? Have a look at this article: It will guide you through the set up in a bit more detail than described here.

      Good luck!

  6. Kavita Podar says:

    Hi Dennis,
    I’m flattered by the details you have provided. This is by far the most detailed article I have seen for Google Shopping Ads. You have touched every detail and this is immensely helpful for e-commerce platforms. Keep sharing such top-notch content.

    1. Dennis says:

      Thanks Kavita 😊

  7. Jack says:

    Seriously I have quality time for reading google shopping campaign thanks

    1. Dennis says:

      Glad to hear that Jack!

  8. Gary L. says:

    Good stuff, very comprehensive and helpful. Thank you sir.

    1. Dennis says:

      Thanks Gary!

  9. Wit says:

    Hey Dennis,

    This is a great guide – and opening up a new online shop I followed it 100% and worked 😀


    My new store has 190 products divided into 5 categories. Since I can’t have all in one feed split by product ID (I think 100 is max), should I:

    a) Split it into two campaigns that test all products
    b) Create 5 campaigns per category and see what products gives traffic/conversions (bid up, own campaign) and which are dead wood (bid down)?



    1. Dennis says:

      Thanks for the kind words Wit!
      You won’t have any problem with a 190 products into a single feed.

      You can run them all in a single campaign and break them out by product category/type/whatever variable you want to split them on.

      But I like your suggestion b, that will give you more control over how you split your budget across categories.

      TLDR; both are possible and good options

  10. Alessandro says:

    How do I get estimates of costs and clicks?
    With keyword ads I can use the keyword planner, but with PLAs what should I use?

    1. Dennis says:

      Good question Allessandro!
      I think the Keyword planner is a good estimation for PLAs as well. Not all searches with Search Ads will have PLAs, but if you’re targeting product focused searches, you get a good idea.

      1. Alessandro says:

        Thank you Dennis… Yes I am selling car spare parts. I got an estimate from the keyword tool that tells me X monthly clicks for Y € at CPC Z€ with search ads.
        Now let’s say I am actually going to put that money.
        But if besides that, I put also all my catalog on the Merchant feed, should I expect extra traffic, right? At a similar cost? I am quite confused about that…

        1. Alessandro says:

          Let me clarify… I am confused about how much extra traffic and extra spend. I am quite sure about getting it, but not about the quantity, compared to search ads traffic.

          1. Dennis says:

            Hi Allessandro,
            I’m afraid there is no straightforward answer.
            The keyword planner tool will tell you how many people a month search for a particular keyword.

            When they search for that keyword, the search results page can contain the following:
            – Search Ads
            – Shopping Ads
            – Organic results
            – Map view
            – Other features

            Now telling which element will get the click, is a lot harder to say.

            That’s why I think you can use those same Search Ads presumptions: X monthly clicks at €Z CPC also for Shopping Ads.

            Does that make sense?

  11. Kavita Podar says:

    I just came across your blog post and must say that it’s a great piece of information that you have shared. I’m flattered by the details you have provided on this site. It shows how nicely you savvy this subject. For Google shopping, how do we manage inventory online?

    1. Dennis says:

      Glad you liked the article!
      You have to manage your inventory via your ecommerce platfrom, which is connected to Google’s system via a product feed.

  12. Sahil says:

    The article is very good and as I am a beginner, I really find it interesting.

    1. Dennis says:

      Great to hear you’re learning from it Sahil!

  13. Vivian says:

    I am wondering how I can see my shopping ads which targeted US if I am from different location?

    1. Dennis says:

      You can try the Ad preview & diagnosis in Google Ads (in the Tools section). Or use a VPN like NordVPN to change your location to the US and see local search results.

  14. John cambell says:

    I was wondering how many products you recommend testing on the initial testing campaign? I am thinking about testing 5 products at a $40 budget.

    then i will transfer the winning products into a single campaign, and scale.

    is this a good strategy, and do you think it has the potential to do well?

    thank you

    1. Dennis says:

      Hey John,
      The goal is to have enough clicks on a product to conclude whether it’s worth it or not.
      I don’t really have a rule of thumb for that because I find it depends on the circumstances. (mainly on the CPC)
      But 5 products @ $40/d will get you valuable data.

  15. Harry says:

    Hey Dennis, I do Shopify and I was wondering do you think I could sell products and make profit by Splitting 20 dollars into 5 dollars a day on google shopping ads?

    1. Dennis says:

      Hey Harry,
      I’m afraid a total budget of $20 won’t get you very far. $5/day is possible if you keep the number of products low. But you’ll need a couple of weeks/months to see results.

  16. Alex Czartoryski says:

    Hi Dennis,

    Thanks for the very detailed writeup.

    One (current) limitation with Shopify’s Shopping App, is that it only sends the product’s current price and not the “compare_at_price”. This means you are unlikely to get any “SALE” annotations in Google Shopping.

    The solution is to upload a supplementary feed.


  17. Anita Dongey says:

    What an informative post, it generalizes everything in detail . Thank-you for sharing. Its great for learning

  18. Phil Saviano says:

    Hello Dennis – Greetings from Boston, MA USA.

    Last week I bookmarked a couple of your videos on YouTube which I found very helpful, and just now came upon this very detailed Google Shopping Guide. I am grateful that you took the time to put this together. You are a good communicator, and an asset to people like me who are stumbling and fumbling through their Google Shopping campaigns.

    Today my head is spinning because I was informed by Google support of a big problem with my campaign. I have an online store that sells handmade, decorative art from Mexico. I have about 800 products, and about 60% are one-of-a-kind. My process of running the site is that when I sell one of these unique products, I replace it with something different, BUT I re-use the same SKU. Google tells me that every new item has to have its own unique SKU; I can’t reuse product IDs. Furthermore, selling one-of-a-kind products is problematic because Google needs to collect data on each product over time and if there are not multiple copies of the item, there is no point in collecting the data.

    So, the message I am getting, I believe, is that I should be using Google shopping ads only for products of which I have multiple copies, and can get more when the inventory runs out. I have not become aware of this problem until today, despite all the reading and video watching and the conversations I’ve had with Google tech support over the past few months.

    I am curious to know what you think. Is the advice correct? Don’t use Google Shopping to sell one-of-a-kind products?

    1. Dennis says:

      Hi Phil,
      Thanks for the kind words!

      While you can use Shopping to sell one of a kind items, you’re correct that you lose the element of scale because you don’t have multiple copies.

      Here is what I would do:
      Use Google Shopping to drive traffic to the site rather than sell the exact product in the ad. I’m sure that once people are on the site they continue to browse and look at other items.
      It’s a little bit of a different approach, which probably also requires a lower CPC to make the setup work.

      (On the SKU thing, on your site I do see different SKUs, can’t you reuse those as product ids?)

      Hope that helps!

  19. Melu T says:

    Hi Dennis,

    I generally never comment on blog posts, but when I found your website I bookmarked it straight away. Thank you for bringing so much value, I have read many many of your posts and they were extremely helpful. I have an online store on Shopify and unfortunately, my shopping campaign is a smart campaign (I know) and I don’t particularly like the lack of transparency. My question is can I switch my google shopping campaign from smart to standard in Google Ads? If yes, how?

    Thank you,

    1. Dennis says:

      Hi Melu,
      Thanks for the nice words and I’m glad you took the time to drop a comment!

      To answer your question: You can’t switch a campaign from Smart to Standard Shopping. The only way to do this is to pause the old smart one, and start a new Standard Shopping campaign. Because you’ve already set up your link with Google Merchant Center, all of your products will be automatically included there.

      Hope that works for you!

      1. Melu T says:

        Thank you for getting back to me – it’s very helpful. I will be in touch soon regarding coaching 😉

        ps: I was at Dojo for a few months last year !

        Thank you,

        1. Dennis says:

          Awesome 👍
          I’d love to be back there for a while right now 😅

  20. Excuse me……
    What are the STORES now showing up in the google shopping listings?
    The “Add to cart” buttons inside the shopping SERP’s?

    1. Dennis says:

      That’s a special program by Google that allows people to buy straight from Google. It’s called “Buy on Google” (formerly know as Shopping actions). You can find more info about those here:

  21. Muftsabazaar says:

    Seriously I have quality time to read the google shopping campaign details thanks for providing this!

    1. Dennis says:

      Happy to hear it was useful for you Mustafa!

  22. Shubham says:

    I learn a lot from this article. Thanks to giving us that kind of valuable Knowledge

  23. Venkat Manda says:

    Hey, It’s quite hard to find tips about Google Shopping Ads these days. Your article helps me a lot.
    Thank you!

  24. Great Article Dennis, You explain everything very nicely but I guess, am not smart enough to action all this advise. Can you recommend anyone good who could carry out these for me for my business?

  25. Hoda says:

    Hi Dennis,

    Thank you for this very useful article. I want to ask please about ‘Search Query Level Bidding structure’ and how to create two different campaigns one for branded keywords and the other for Generic keywords so how can we create these campaigns and bid on specific keywords inside shopping campaigns?

    Thank you so much 🙂

  26. nayab says:

    very useful guide. interesting way of teaching shopping ads.

    1. Dennis says:

      Glad it was useful Nayab!

  27. Webguy says:

    Hi Dennis,

    Thanks for the great guide.

    I have a shopping campaign setup and getting impressions and click for people searching specifically for the product name.
    But is there a way to show my ads to people searching for a type of product?

    Let’s say I have a book ‘How to fix a 2021 car’
    My ad will show if someone searches for ‘How to fix a 2021 car’

    But, I also want my ad to show when searches for ‘car books’

    How can I display my ads to these wider scope type searches?
    I’m guessing I have to change my product category to include the word ‘Car Books’ ?

    I read that the Google Showcase Ads used to do what I want but they’re not available anymore.


    1. Dennis says:

      Google uses a few elements to decide which queries to match your product with.

      The most important of that is the product title. Next are the product identifiers, if you have them (gtin/ISBN, brand, etc.). Then the google category / products type. And lastly the description.

      In your case, I’d have a close look at improving your products title, and also adding to the product description (keyword stuffing if you’d like :p)

      1. Webguy says:

        Cool, thanks Dennis!
        It’s a pity shopping don’t allow keyword matching like normal G ads but I guess there must be a reason. 🙂

        Thanks again.

  28. Marcus S. says:

    Hi Dennis,

    A question, I am selling rugs though Google Shopping Ads, I have so far tested with 100 euros with all products (I have 42 products and in total 405 variants). So sales so far, click through rate is around 2%.
    I set the budget to 15 euros per day.
    Is it okay to have these type of metrics and should I continue to run the ads this way or could something be wrong, I followed your guide while setting it up so everything should be fine. Right now I have 115 clicks.

    Thank you!

    1. Dennis says:

      Hi Marcus,
      Those metrics look pretty normal to me.

      One thing you might want to consider is whether or not to advertise all your variants. If you have a large price differences, it might be worthwhile to only include your cheaper (smaller) ones in your ads.
      Hope that helps!

  29. Simo P. says:

    Can you please explain how setting a bid works in Shopping ads.
    For example right now I am bidding as low as I can to get as many clicks as I can with my budget. I am getting few sales, but could be more profitable. 20 cents AVG CPC.
    But if I will raise the bid to 60 cents, will I get less clicks but the traffic would be more quality? That means more profitable with sales?

    1. Dennis says:

      Hi Simo,
      Good question!
      The bidding for Shopping ads actually is the same as for any keyword inside of Google Ads.
      When you’re bidding 0.2 / click, you qualify for a number of impressions. When you raise that bid, you qualify for more impressions up to a certain point.
      But how much more impressions you get, and how much more you need to bid depend on the product/keyword and the competition.

      You can use the Search Impression Share metric in your account to see how much impressions you’re capturing at 0.2/click, then if you increase it to 0.6/click, you should be able to see the increase in impression share.

      So overall, a higher bid should get you more clicks and sales. But I can’t comment to the profitability of those sales, as your overall cost will be higher. The only way to figure this out is to test it!

  30. Stephan says:

    Hey Dennis, great post, thank you.

    I wanted to ask how granular would you advise to go with negative keywords? Let me go into more detail and explain what I mean by that. Please bear with me and I appreciate your help.

    I’ve been using search ads for many years and I’m used to going through the search term reports query by query, so I can add any irrelevant keywords into the negatives list.

    However, I would argue that you really have to be careful with this approach when running Google Shopping Ads, because even when you get a click from a keyword that you would initially consider as “generic” or “too broad”, it may still end up generating a conversion. So in the other words, if you are too aggressive with eliminating broad terms, then you may end up limiting your traffic and hurting the conversions.

    The reason for that would be the fact that people clicking on shopping ads are more inclined to buy (compared to search ads), especially since they see the exact product they’re clicking on as well as the price, which is NOT true for search ads.

    You also have to keep in mind that some broader terms don’t always necessarily display shopping ads, unless you specifically navigate to the “Shopping” tab. When this happens, it again shows intent and people are still quite likely to buy due to the fact that they’re now browsing under the “Shopping” tab, despite their search term being generic.

    If you’re still with me, let’s do an example, so hopefully you’ll see what I mean.

    Say you’re selling Nike trainers, but your store is not huge and you only have a few models in stock, i.e. Nike Air Max, Nike Air Force and Nike Air Jordan.

    What I would normally do, is create a separate ad group for each of those 3 products, and then add generic keywords, such as “nike trainers”, “nike shoes” or “nike footwear” into the negatives list. Yes, those terms are relevant, BUT they’re too generic and they don’t contain any model name, so that would be my reasoning for adding them into the negatives.

    On the other hand, if a person searches for one of those generic terms and then clicks on your ad, then chances are they’re specifically interested in the exact model that you’re advertising, because they can see the image of it as well the price.

    So I think what I’m trying to say is that people who search using broader terms AND click on shopping ads, have a higher buyer intent, so we should be less restrictive with negative keywords, and only add negatives which are obviously irrelevant, so in the above example it would be stuff like, “shirts”, “jackets” or “adidas”, etc.

    I hope what I said makes sense and would be great to know what you think about this.

    Look forward to your reply



    1. Dennis says:

      Hi Stephen,
      Thanks for your comment!

      I would agree with most of your comments about Shopping Ads having a higher purchase intent.

      Which keywords you choose to add as negatives really depends on your business. If you’re just starting out, I often advise stores to spend their budget on the most specific search terms. Then when they’ve maximize their presence on those searches, it makes sense to branch out.

      One other thing I do want to expand a bit on is on your “Nike trainers” example, aka if you’re only selling a small number of products.

      In that case, a bigger concern of mine is how effective we would be compare to other advertisers. Even though people click on the ad, if you only have that product for sale, you will lose out to advertisers with a bigger product selection.

      Hope that helps!

  31. Gordon says:

    What doesn’t seem to be spelled out with Google Shopping, is that products must be able to be delivered everywhere in a particular chosen country, say Australia in my case.

    As such, you cannot limit the audience to only those that wish to have a product delivered to a specific sellers location (who offers personal delivery within that location), within say Australia.

    Took me a while to work this out, because dealing with Google is far from intuitive.

    Please tell me if I am wrong.

  32. Manish Gupta says:

    Thanks for Such a detailed and well researched post for Google Shopping Ads


    Manish Gupta

  33. kbamena says:

    As a beginner, this article is very useful to understand.Thank you so much

  34. Gorish Dua says:

    I couldn’t even learn that clearly from the google ads certification course. Helped a lot.

    Thanks, Dennis!

    1. Dennis says:

      Appreciated your comment Gorish!

  35. Rohan Rawat says:

    I appreciate the thorough research you did for this article. You covered every detail and this is extremely helpful for websites that sell physical products like clothes or jewelry. Thanks for the in-depth articles you share with us.

  36. Jacob says:

    Hi Dennis,

    Greetings from Australia.

    Thanks for a great post. Quick question, you mention to “Create a campaign without a goal’s guidance” is this because you are using manual CPC, so bidding isn’t affected by a set goal?

    Would this be the only circumstance where you would not set a campaign goal?



    1. Dennis says:

      Hi Jacob,
      Nice to hear from you!
      The way Google phrases this is a bit confusing. “Create a campaign without a goal’s guidance” only refers to the actual setup. If you select a particular Google, Google will hide certain options for campaigns depending on that goal.

      It doesn’t have anything to do with the actual goal / conversion action that you’ll use in your campaigns. So you could select “Create a campaign without a goal’s guidance”, and then set up a campaign that uses Maximize Conversions as a bidding strategy. Or a Performance Max campaign.

      Hope that clarifies things!

  37. Peter M says:

    Hi Dennis,

    Thank you for this great article.

    I have a question about products with different size (e.g. t-shirts). Does it make sense to add al product sizes (thus sku’s) to Google Merchant Center and the ad campaign or do the M-sized products suffice?

    The reason for this: suppose you have 2 conversions on the S-sized and 1 for the M-sized SKU for the same product. Actually, you have 3 conversions for the product and it doesn’t matter which size, right? Only, Google will optimize for these sized more than the L sized t-shirt which doesn’t make any sense.

    So my feeling would be that it would be sufficient to add the M sized products to the product feed. Is this correct or am I missing something?

    Thanks a lot!!

    1. Dennis Moons says:

      Hi Peter,
      If your customers are searching for the variation, you want to add all options.

      If not, it’s easier for you (and Google to consolidate on a single variation).

      In your case, people aren’t really searching for the specific size, they will do that on your site.

  38. raj says:

    great one

  39. Gus says:

    Excellent .Thanks for all the tips!

    1. Dennis Moons says:

      You’re welcome Gus!

  40. Alessio says:

    Very helpful article about Google shopping definitely a sometimes under utilised platform for many smaller ecom sites that has great potential if executed well.

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