By Dennis - Comments: 24

Last Updated on July 14, 2021

smart-shopping-banner

I’ve been a vocal critic of Smart Shopping since it came out.

I used to consider this fully automated Shopping campaign the latest iteration of Google trying squeeze more money from advertisers.

So for the last couple of years, I’ve steered clear of Google Smart Shopping campaigns and advised others to do the same.

But recently I’ve started to warm up to Smart Shopping. There are two reasons for that.

  1. I’m starting to see solid results in some situations
  2. It’s where Google is headed. Resisting all automation because I desperately want to stay in control isn’t a very useful attitude.

So in this article, I’ll show you what Smart Shopping campaigns are, how exactly they work and what you can do to improve them!


What is Google Smart Shopping?

Google Smart Shopping is a combination of a regular Shopping campaign with the Display network.

That means your products can not only show in the search results, but also on the Display network, YouTube or in Gmail.

These could be Smart Shopping Ads:

google-shopping-normal-search-results

But this ALSO can be a Smart Shopping Ad:

smart-shopping-dynamic-remarketing-example

The “Smart” part indicates that Google uses automation to show the right ads to the right people in the right places.

This requires a leap of faith.

Because Google doesn’t give you a lot of information when and where your ads show up.

And with the few data points that they do provide, you’re unable to make meaningful changes.

Another issue is that Google doesn’t specify how much of the budget is allocated to prospecting (reaching new people) vs remarketing (people that have already visited your website).

Because you don’t know this split, it makes direct comparison with other campaigns harder.

Before we get into the details of Smart Shopping, let’s look at the difference between the two Shopping campaign subtypes.

Difference between Smart Shopping and Standard Shopping

One of the big differences between Standard vs Smart Shopping is how much control you have over your campaigns.

With Standard Shopping, you can see the queries your ads appear for, and are able to throttle them up or down, or even exclude them as negative keywords.

With Smart Shopping, you’re giving up all that control in exchange for a wider reach and more of Google’s automation.

Comparison:

Standard Shopping Smart Shopping
Networks where your ads appear Search Network Search Network, Display Network, YouTube, Gmail
Reach Limited Wide
Bid strategy Manual and automated Automated only (Maximize Conversion Value with optional Target ROAS)
Level of control High Low
Campaign transparency High Low
Optimization potential High Low
Remarketing Optional if you add the Audiences Included by default

Before showing you how to create the actual campaigns, let’s tackle the big question first.

When should you use Smart Shopping campaigns?

If you ask this question to 5 Google Ads experts and you’ll probably hear 5 different answers.

So to make it easier, let’s first answer a different question.

When should you NOT use Smart Shopping campaigns?

  1. Starting out
  2. Need control
  3. It works

In all three cases, the advantage of getting additional insights into your campaigns AND the ability to control it outpaces the promises of Smart Shopping.

So if any of those three are applicable to you, stick with Smart Shopping.

2 Good and 2 OK Reasons For Using Smart Shopping

First let’s tackle the OK reasons.

1 – Autopilot

You want Google Shopping but don’t want to do any ongoing work.

If you’re starting out, or you’re short on time and knowledge about Google Ads, Smart Shopping isn’t a bad pick to get going and get a feel for what’s possible. (But please, read the rest of the article to discover the alternatives!)

2 – Pray & Hope

If nothing else works, you switch on Smart Shopping

In the past I wanted to keep as much control over my campaigns as I could. But there have been cases where I couldn’t figure out how to make the campaigns work. And in some of these cases I started testing whether Smart Shopping campaigns could make a difference. And in some cases they did.

It’s not perfect, and it doesn’t make you feel like a badass, but if it work it works 🤷‍♂️

I have seen both of these 2 OK approaches work, but I’ve also seen them misfire. So adopt them at your own risk. 😛

If you are interested in becoming more intentional about how to use Smart Shopping effectively, here are two approaches that might work better:

3 – Experiments

I run Smart Shopping experiments for a couple of reasons.

First I want to stay up to date on what the algorithm can currently deliver. Google is learning and improving with every click, and I’m confident that the Smart part is only going to get smarter.

I don’t want to be left behind the day when Smart Shopping outperforms my other efforts, so that’s why I keep learning.

The second reason to experiment with different Smart Shopping campaigns is to achieve better results for my clients: more sales at a higher return.

Smart Shopping might not be a good approach for all campaigns and all products. But there might be a combination of Standard and Smart Shopping campaigns that does bring better results.

4 – Banking on what works

If one of those experiments shows promising results, it makes total sense to copy that approach to a larger part of your product catalog.

I have to say that with most clients, I’m using that third approach. I’m looking to see what is possible with Smart Shopping and how to best integrate it in our overall strategy.

At this point I definitely haven’t moved over to an all Smart Shopping approach yet!

How To Set Up A Smart Shopping Campaign

To get started with Smart Shopping, there are three requirements:

Smart Shopping Requirements

  1. Products in Google Merchant Center: you need a feed in Google Merchant Center and products need to be approved
  2. Conversion tracking: Google is using conversions to optimize your campaigns, you need to record and send them into Google Ads.
  3. Remarketing list with 100 users: if you have added the Global Site Tag to your site (this is the same as the Google Analytics tracking code), you need at least 100 visitors on your site.

Another requirement I often hear about is that you need minimum number of conversions. I’ve found that to be false. Obviously, more conversions will be helpful to train Google’s system. But even without any prior sales, you can run a Smart Shopping campaign.

Creating a Smart Shopping Campaign In Google Ads

After selecting Shopping as your campaign type, you can choose to set up a Standard or a Smart Shopping campaign.

google-smart-shopping-campaign-subtype

If you pick the Smart Shopping option, in the next step you’ll have to select a budget and bidding strategy.

Starting out, just go with the suggested bid strategy: Maximize conversion value.

maximize-conversion-value-without-roas-goal

For now, don’t set a target ROAS, we’ll get back to that in the section on Smart Shopping optimization.

Next you can create product groups. Since you can’t set any max CPC for a product group, splitting them off can be helpful to give you a look into your campaign.

But avoid subdividing your product groups too much, Kirk from ZATO heard from Google that this might hurt performance. Instead, they recommend product groups with min 20 conversions in 15 days. If you don’t have that many, just leave them together.

Another big difference with Standard Shopping Ads is that with Smart campaigns, you need to create an actual ad to show to people.

Smart Shopping Ads

That’s because besides the product listing ads in the search results, your Smart Shopping Ads also run on the Display Network.

To make sure those look good, you need to provide additional assets to Google. This allows them to mix and match different elements to tailor each ad to its placement.

Google calls these Smart Shopping Ads.

They are a limited version of the Display ads you can create for a Display campaign:

google-smart-shopping-responsive-display

You need to provide an image, a short and long headline, a description and a final URL. The video is optional but I’d highly recommend adding one!

One often forgotten part of Smart Shopping Ads are all of the assets that come from Google Merchant Center:

google-merchant-center-business-information-logos

Make sure that you add your business colors and a square and rectangular logo. That ensures your branding is consistent between your ads & website.

On the right hand side of the Ad section inside Google Ads, there is a preview pane. Using this, you can toggle through all of the different combinations that are possible, both on desktop and mobile.

Here is an example from my Smart Shopping campaign. This is a YouTube Ad:

smart-shopping-youtube-ad

Smart Shopping on Shopify

If you’re using the default Shopify Google Shopping App, you will be pushed into a Smart Shopping campaign automatically.

shopify-app-smart-campaigns

Personally I’m just using the app to get my Google Shopping feed into GMC. Then I just set up the actual campaign in Google Ads. But most new advertisers will follow the tutorial and set up a Smart Shopping campaign unknowingly.

Google Smart Shopping Results

In my experience, the results from Smart Shopping campaigns still lag behind the performance of well-optimized Standard Shopping campaigns.

That last part is important here. Read it again.

Like I said before, if you don’t know what you’re doing, the automation in Smart Shopping will reduce the choices you need to make.

In this section, I want to share a couple of case studies where I have seen interesting results from Smart Shopping campaigns.

Going through the case studies below, you’ll see that I’ve tried to include smaller advertisers with realistic numbers. That hopefully makes it easier to grasp.

Case study 1

The success of this B2B campaign is closely linked with the technical nature of the products.

Most buyers tend to search for the generic category name. That makes it tricky to optimize an existing campaign to surface the right product for the right query.

Smart Shopping Standard Shopping
Clicks 322 543
Cost $126.96 $456.09
CPC $0.39 $0.84
Orders 13 8
Revenue $667.70 $233.53
ROAS 5.3 0.5

What’s clear from this table is that the Standard Shopping campaigns were overspending. I tried to limit that through various optimizations, but could never reduce the cost while keeping clickas and impressions at an acceptable level.

Case study 2

This online retailer has a HUGE catalog with products that have small differences. I can’t give more details but a good comparison would be selling 10,000 different of socks for men.

And each product would sell only a handful units per year. Any analysis on their catalog to find better performing products proved trivial.

That made it very hard to allocate the budget accordingly.

Smart Shopping however, did a lot better!

Smart Shopping Standard Shopping
Clicks 2,578 4210
Cost $1,527.45 $1,817.20
CPC $0.59 $0.43
Orders 91 40
Revenue $7,662.34 $2,115.41*
ROAS 5 1.2

* This doesn’t include revenue generated by a dedicated dynamic remarketing campaign. That campaign fell from a ROAS of 27 ($27 in revenue for every $1 in cost) before to a ROAS of 19 after. So some sales have moved over the dynamic ads in the Smart campaign, but the overall revenue is still higher compared to before.

Case study 3

Like I said earlier, I run regular tests to keep tabs on how the effectiveness of Smart Shopping is evolving.

This is for my own store, where I ran the same campaign in both 2019 and in 2020:

2019 2020
Clicks 276 1,014
Cost $170.70 $360.31
CPC $0.62 $0.36
Orders 2 15
Revenue $158.70 $429.38
ROAS 0.9 1.2

Results aren’t stellar (or profitable) yet, but the number of conversions has increased, and that consistency is reassuring (although still unprofitable)

Interestingly the CPC has fallen, suggesting that more clicks have come from the Display network, where the costs per click is lower.

6 Google Smart Shopping Optimization Tactics

As I said before, the list of tactics available for Smart Shopping optimization is a lot shorter than those available to optimize Standard Shopping campaigns.

But there are still a few things we can CAN do!

Here are the big areas we can improve:

  1. Structure
  2. Budget
  3. Bidding strategy
  4. Ads
  5. Feed
  6. The REAL WORK

0 – The Learning Period

If we’re talking about optimizing Smart Shopping campaigns, we first need to explain the Learning period.

With all automation (automated bidding strategies, Smart Shopping, etc.), Google relies heavily on the data that your campaign generate. So when you’re starting out, or when make significant changes to your campaigns, Google needs time to recalibrate.

This the Learning period.

google-smart-shopping-campaigns-learning

I’ve usually found that this will last between 2-14 days.

The most important thing to be aware of is that during this period you might see big performance swings. So don’t freak out when that happens 😅

1 – Structure

As with most Google Ads campaigns, the way you structure your campaigns can have a huge impact on your actual results.

Most advertisers that try Smart Shopping do so by running a single campaign with all of their products.

That gives Google the maximum amount of data, but it also makes it the toughest to draw any conclusions:

  • If the campaigns performs well, what’s the next step?
  • If it doesn’t, what do you do to make a difference?

Most likely you have some products within your product catalog that perform better than others. So instead of putting them all together (which muddies the overall results), why not put them into their own campaigns?

Another reason to pay closer attention to your Smart Shopping campaign structure is to lower your risk.

Many advertisers are hesitant about switching from Standard to Smart Shopping. Which I totally understand. If your business relies on the revenue coming in, you don’t want to put it all at risk, just to because I told you to try Smart Shopping.

One simple test to run is one using zero click products. These are products that are part of your existing campaigns, but that haven’t had any clicks for a while.

Since you’re not getting any clicks on these products anyway, why not use them in a Smart Shopping campaign?

I’ve seen very good results from implementing this Zero Click campaign for clients.

And similar to this type of campaign, there are a number of other strategies that we’ve identified. All have a lower risk on revenue loss and they are great candidates to test Smart Shopping.

2 – Ads

I’ve mentioned the Smart Shopping Ads in the Setup section above.

But I want to draw your attention to them again. Because you might have glossed over that part.

I was no different. When I ran my first Smart Shopping campaigns, I used to quickly move through this section and just slap on any text and image I could find. Today, I pay closer attention.

The first step is to provide all of the elements that Google asks for:

  1. Logos and color in Google Merchant Center
  2. Short & long headlines
  3. Description
  4. Images
  5. Video

Next, think about how you can use your ad more strategically.

You can only have a single ad in each Smart Shopping campaign, so if you improve the structure of your campaigns, you can match your ad with the products that are in your campaign.

In some (rare) cases, it even makes sense to have a single products inside of a Smart Shopping campaign. that allows you to write hyper-specific copy.

Like this example:

single-product-smart-shopping-campaign
Super specific ad for a single product Smart Shopping campaign

3 – Budget

Next, let’s take a look at the role the budget plays in a Smart Shopping campaign.

Since Smart Shopping is a combination Search AND Display network placements, the total available impressions is a lot bigger.

That means that a change in budget also changes how Google allocates the budget.

This makes it a very powerful lever, but one that can also cause damage if you don’t use it properly.

The most common mistake I see is budget changes that are too sudden or drastic.

Let’s say your campaigns have been running at $30/day and you have a steady ROAS of 4. You want more of that so you increase the budget to $100/day.

Now Google has to find a way to spend 3.3x more money, and do it profitably 🙈. So they will start testing different kinds of placements and audiences to look for that extra volume. This can lead to big changes in performance. At least for a few weeks, until Google finds a new equilibrium.

4 – Bidding strategy

Smart Shopping uses the Maximize Conversion Value bid strategy.

The only way to influence this bidding strategy is to set a target ROAS.

You can either run a campaign:

  1. without a target return on ad spend
  2. with a target return on ad spend

Starting out, Google recommends not to set a target ROAS to not limit the scope of its “learning”. I would also recommend letting the algorithm run like that for a couple of weeks.

After, you should have some idea what to expect performance-wise. You’ll also know if the ROAS is within an acceptable range. If it is not, you can start to set tighter guard rails.

Here is how to set your target ROAS.

If you’ve achieved for example a ROAS of 253% during your first test, you could set a target ROAS of 200%.

maximize-conversion-value-target-roas

Picking a target that’s lower than your baseline will always work, but setting a more aggressive target can cause problems. If I set a target of 300% in the example above, it could very well be that Google stops showing my ads because it can’t make 300% work.

If you don’t trust Google, or you can’t afford to take a risk to wait it out for a few weeks, consider limiting the scope of your test to a few brands or a specific product category.

Also know that you don’t HAVE to set a a target ROAS in order to achieve a good result. I have a client where we’re running campaigns without a target, and are achieving acceptable returns.

So use this to test to see what works best for your campaigns.

5 – Feed Tweaks

Like Standard Shopping campaigns, Smart Shopping heavily relies on the information in your product feed.

So if your product information is of higher quality, Google will be able to better match your products with search queries.

Here are 3 important things to pay attention to:

  1. Keyword rich product titles
  2. Add product identifiers (GTINs, brand, MPN, etc.)
  3. Provide product details (colors, size, material, etc.)

6 – the REAL work

At some point in the future, Smart Shopping will really work (though this might be a few years out), our job as advertisers will look radically different. We’ll no longer be glorified button pushers. The machines will do that for us.

Instead we have to contribute where we as humans excel. To use our creativity, intuition and understanding of our customers to grow the business.

This isn’t just the case for just Smart Shopping, it will probably affect a lot of digital marketing jobs.

So what will we do instead? How can you as a business owners get better results from the money you hand over to Google? Of if you’re a freelancer, how can you still earn a living?

Here is a list of things which I think we’ll be focusing a lot more on in the next 5-10 years:

  1. Budget allocation
  2. Channel testing
  3. Conversion rate optimization
  4. Lifetime value optimization
  5. Coming up with new creative angles

There are probably a lot of other things that will be added to that list. But I hope it gives you a glimpse of where your time can be spend if you’re not worrying about max CPC bids 🙂

Smarter With Your Ads

I know that Smart Shopping is where Google is headed, so I’ve started to spend more time experimenting with this campaign subtype.

I hope this article gave you some more insights into how Smart Shopping works, and what you can do to give it a try in your campaigns!

About the author

Dennis

Dennis is the founder of Store Growers. He's an ecommerce PPC expert from Belgium and has been running Google Ads campaigns for over 8 years.

His goal is to cut through the BS when it comes to ecommerce advice and provide you with tactics and strategies that will make you more money.

Read more

24 responses to “The Google Smart Shopping Dilemma: Control Vs Automation

  1. Hi Dennis,

    Good post and I’m seeing similar results. Wasn’t really a fan of Smart Shopping campaigns for the reasons you mentions, I like to be in the driver seat. Eventually I’ve found some clients were I couldn’t get the ROAS that we needed and was empty for ideas to fix it. So I changed my strategy to Smart Shopping with far better results + more free time 😉 because there is not much to optimize.

    I think the bottomline is to try Standard campaigns first, especially because Google has no real conversion data to run a Smart Shopping campaign. When it does not work (after you’ve tried everything in your arsenal) switch to a Smart campaign.

    Keep up the good comparison work!

    Mike

    1. Hi Mike,
      Thanks for sharing your experience. That sounds very familiar 🙂
      I think it’s important to stay up to date with what Google is able to do. Even if we’re reluctant to give it a go!

  2. Hey Dennis, interesting post.

    In the Case study 1 you write:

    “What’s clear from this table is that the Smart Shopping campaigns were overspending.”

    However, the smart shopping campaign spent much less than the standard shopping campaign.
    Am I missing something?

    1. Hi Andrey,
      Good question!
      What I meant with overspending is that the cost was too high compared to the revenue. Hope that clarifies things 🙂

  3. I don’t get it still. The cost too high? On the opposite, the smart campaign has lower cost and higher revenue comparing to the standard campaign… ?

    1. Just checked the actual section and I made a mistake. It should have been that the Standard* campaigns were overspending, not the Smart ones.
      Sorry for the confusion!

  4. Hello Dennis

    As you said,we not know google how spend your budget,but for your study case. some looks good.
    Less manual work,but we throw budget in the black hole.

    hope you give us more information for smart shopping.

  5. Hey Dennis, great article I was waiting for this. I have one question. I have general store where I have different type of products (about 500 sku). Can I make a single smart campaign for all the products or should I make campaigns category wise. How should I allocate the budget.

    1. Hey Subodh!
      For Standard Shopping, I would say break them out into categories, but here things are a little different.

      Since Smart campaigns are so automated, you want to have a lot of signals (conversions) for Google to adjust the campaign on.

      So I would keep them in the same campaign, unless they have a very different ROAS target. Then it make sense to pull them into their own campaigns.

      1. Hi Dennis,
        So it is possible to have more smart campaigns for one country?
        If so, is Google Ads editor an option to copy a smart shopping campaign?

        1. Hi Marielle,
          Yes that’s possible. You can divide up “All products” as you think is appropriate: by brand or by category.

          Personally I would do it in the Google Ads interface since you’ll have to make the product exclusions on the product group level. I find that overview a bit more intuitive vs the editor.

  6. Hi Dennis,

    Great article! Wanted to check with you or others if you have the same issues like I do. 🤪

    I have 20 categories that have each 5-10 products. During covid many of the top sellers would be OOS for weeks and I find that sales fluctuate based on that. Campaign constantly has to look for something else to sell. Do you have experience with OOS and do you have issues with your campaign due to constant OOS?

    2nd question, I have noticed that smart campaign would push one SKU over others. 50%-70% of the clicks would go to one item out of 5 or even 10. Cost per conversion on that item is not much better than from other items.

    Since we can’t change the bid or work on search terms how would you make smart shopping show other products more?

    Hope I am not asking to much 😁

    Thank you in advance

    Dan

    1. Hi Dan,
      I’ve found that with rapidly rotating stock (new collections, products running out, etc.) Smart Shopping can be very challenging. I’ve seen what you described many times before. A bestselling SKU runs out and Google scrambles to find the clicks and sales somewhere else.
      On the other hand, if it finds consistent performance with a single SKU, it will keep pushing that one hard, and neglect the others.

      The only way around that is to structure your campaigns differently. If you have that one truly bestselling item, maybe that goes into its own campaign with its own budget and ROAS target. Then the others in a seperate campaigns with its own budget to spend.

      Not ideal but this allows you to steer Google a little bit more vs “trusting the algorithm”.

      Hope that helps!
      -Dennis

  7. Great article!
    Would you recommend having both campaigns running?
    I started with smart campaign and it’s doing very well so I want to leave it on.
    But I’d also want to see if I can optimize a standard shopping campaign in addition to the smart campaign.

    1. Hi JB,
      Unfortunately that’s not possible. If you start a standard shopping campaign with the same products, it won’t get any clicks or impressions.

      That’s because the smart shopping campaigns takes priority.

      You could run a test with products that aren’t performing very well in smart shopping though.
      -Dennis

  8. Hi Dennis

    Great article thanks. I’m using Shopify with the single default Smart Shopping campaign. I have a wide range of products and as I understand it Google favours products which have better conversion rates and would show more of those. Let’s say I have 30 of a particular product that is selling well (80% of my sales) and the remaining 2000 products make up 20% of my sales, I want to try balance this out a bit. Is there a way I can apportion my ad budget to give more to the bigger group of products and less to the good sellers?

    Thx

    1. Hi Mark,
      Keep the bestsellers in your existing campaign, but move the 2000 others into a new Smart Shopping campaign.

      That will give you the ability to assign a budget to each campaign, and potentially also assign a ROAS target per campaign.
      -Dennis

  9. Hi Dennis,

    Do you know where the video will be shown that can be added to the smart shopping campaign?

    Arie

    P.S. erg behulpzame site, veel van geleerd!

    1. Hi Arie,
      Smart Shopping Ads can take many different forms. The video can also show in a couple of different ways.

      To see some previews: when you’re setting up the actual ad, Google shows you a preview, with the controls above you can cycle through all of the different variations. It’s not ideal but all we have!

  10. We started using smart shopping last october and to start off with the results were good. But our business is quite seasonal and regardless of the number or qualty of queries google will still max out our budget.

    Really low returns now and we are moving all of our campaigns away from smart shopping. Can’t live with not knowing what search terms we are paying for and some days seeing stupidly high cpc with nothing to show for it.

  11. Hey Dennis,

    I have a couple of General Shopping campaigns. How do I set-up a Smart Shopping campaign that doesn’t interfere with the General ones?

    Should I create a separate feed for the Smart Shopping? Or is it ok to run the Smart Shopping campaign alongside the General ones?

    1. Hi Wit,
      You don’t need to create a new feed, your existing one does all that’s needed.

      To have a clean comparison, I would pick a few products/categories/brands and put them into a Smart Shopping campaign. You can then either pause those products in your existing campaigns, or leave them active there. Smart Shopping will have priority over Standard Shopping campaigns, but if the budget is too low, you’ll still get impressions and clicks in the Standard Shopping campaign.

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