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Should you invest in Google Ads for your listings?

With 34.6% of online shoppers starting their search on Google, your eCommerce website needs to be there to greet them. However, getting yourself to the top of Google requires SEO knowledge, hard work, and patience – leading many to skip the queue and invest in Google Ads, but is that wise?

This blog investigates the ins and outs of Google Ads and Google Shopping for eCommerce, including campaign structure, optimization, strategies, and increasing ROI for maximum results.

What are Google Ads?

We all know Google as the go-to search engine, churning millions of search results in milliseconds, but how much do you know about Google Ads? There are five different types of Google Ads, one of which is specifically important for your eCommerce listings.

Search

These are the ads you’ll be most familiar with. Text-based ads that appear at the top of Google search results, following the bidding on certain keywords.

Should you use Google Search Ads for your eCommerce business?
Source: Google

Google Shopping

These are ads appearing at the top of Google search results and on the Shopping tab when someone searches for a product. There are two main types of Google Shopping ads:

  • Product Shopping ads that promote a single product. 
  • Showcase Shopping ads that advertise multiple products. 

Both provide more in-depth information than traditional search ads, including an image, product title, price, store link, and star rating. 

Should you use Google Shopping Ads for your eCommerce business?
Source: Google

The three remaining ads are Display ads (shown on external websites), Video ads (shown on YouTube), and Universal App ads (for apps), but we’re going to focus on Google Shopping ads because they’re of most use to eCommerce sellers.

Advantages of investing in Google Ads and Shopping campaigns

There are many advertising platforms, all competing for your money. Facebook, Instagram, Amazon, Walmart, eBay – what are the benefits of investing in Google Ads over these?

1) Increased visibility

Appearing at the top of Google increases your listing’s visibility in a way that’s not achievable on other platforms. You’re reaching a wider audience, who aren’t necessarily committed to one particular sales channel or seller. This gives you an unrivaled opportunity to convert someone who otherwise would never have come across your listing.

Take popular retailer Ikea. Google Ads increased their visibility through 264% more impressions and 182% more clicks. This boosted their conversions and doubled their website sales.

2) High customer intent

Online shoppers searching Google for specific products have high-purchase intent, much more than someone scrolling through Instagram. This results in qualified leads who are more likely to convert. In fact, research shows that the time to sale is 24% quicker on Google than it is on Amazon – giving online customers less time to reconsider their purchase and abandon their shopping cart.

3) Informed buying decisions

Finally, Google Shopping Ads condense the most important details about your listing (photograph, price, key features, and rating) into a non-obtrusive ad. This gives online shoppers more information about your listing, prompting them to click through and convert.

Popular backpack manufacturer JanSport found that using Google Shopping ads to highlight their back-to-school backpack’s key features made their listings stand out – boosting conversion rates by 13%.

4) PPC format

Finally, Google Shopping ads are pay-per-click, meaning that you only pay when someone clicks on your ad. This is a cheaper way to advertise than traditional advertisements and, again, results in more qualified leads with higher purchasing intent.

Disadvantages of investing in Google Ads and Shopping campaigns

Of course, there are also considerations to be had when looking at any form of paid advertisement. Specifically, eCommerce businesses should be mindful of:

1) Impact on profits

If your listings have low margins, conversion rates, or average order values, then spending what little profit you have on Google Ads isn’t the way to go. Instead, start by focusing your efforts on improving your conversion and average order rates (see below for tips). Then you can progress to Google Ads.

2) Competition

Big brands, with big budgets, use Google search and shopping ads, meaning that they can quickly outspend you and reduce your chances of being seen. If you’re selling fewer than 500 products, it is unlikely that Google Ads will help you unless you’re selling very unique items.

3) Site abandonment

Just because Google has tempted someone to click onto your listing doesn’t mean that they will convert. Slow websites, outdated information, slow delivery options, and costly shipping can all turn would-be customers away. If you’re not tempting online shoppers to buy once they’re on your listing, you’re wasting your Google Ad spend.

How does Google Shopping work?

Google Shopping ads work differently from search ads, with no use of keywords or user-created advertisements.

Instead, you upload product information to Google Merchant Centre and create campaigns in Google Ads to determine which products to advertise and when to advertise them. Google’s algorithms use this information to create and place Shopping ads for relevant search queries.

Google Shopping pricing

Product Shopping ads operate on a CPC (cost per click) basis – you only pay when someone clicks your ad.

Showcase Shopping ads operate on a CPE (cost per engagement) basis – you pay when someone clicks your ad or expands it for longer than 10 seconds.

Google Shopping vs. Shopping Actions

Despite the similar-sounding names, Google Shopping ads are different from Google Shopping Actions (also known as Buy on Google).

Google Shopping is an advertising channel, whereas Shopping Actions is better thought of as an online marketplace that uses Google Shopping to advertise products.

Both appear at the top of the search results, but Shopping Actions enable users to buy your products without leaving Google – all you do is pay Google a commission on sale.

While Google Shopping Actions might be a worthwhile consideration for your multi-channel selling strategy, they should not form part of your advertising strategy. Why? Because Google Shopping Actions do nothing to advertise your brand, encourage website visits, or generate repeat purchases.

Google Shopping vs. Google Shopping tab

The Google Shopping tab is a search page on Google dedicated entirely to shopping results. Google Shopping ads appear on this page in addition to the main search results.

Since April 2020, the Google Shopping tab also contains free listings, like the main page. This increased competition makes investment in Shopping ads even more crucial for discoverability, but it also means that products not included in your Shopping campaigns may still be displayed.

To become eligible for free listings on the Shopping tab, you must opt in to “surfaces across Google” from Merchant Centre.

How to structure your Google Shopping campaign for best results

You can run Shopping ads directly from Google Merchant Centre; however, doing so limits your campaign structure to name, country of sale, and daily budget only – not great for finetuning your results.

To create a Google Shopping campaign structure destined for success, link Google Ads to your Merchant Centre product and tailor the following:

Goal

The goal of your Shopping campaign determines whether Google drives sales, leads, or website traffic through your ad placement. This will largely depend on your overall marketing strategy.

Campaign type

There are two Google Shopping campaign types:

  • Smart Shopping – Google automates settings to best achieve your goal. This is ideal for new sellers or Google Ad users.
  • Standard Shopping – you tailor the campaign settings yourself. This is for experienced sellers and Google Ad users.

Bidding

Your bidding strategy determines when and if your Shopping ad appears and how much you pay per click or engagement. To optimize your Google Shopping campaign structure for success, adjust the following settings:

  • Strategy – either an automatic bidding strategy that maximizes the value of conversions within your daily budget or a manual strategy that sticks to a max bid per ad.
  • Campaign budget – a daily maximum budget for the whole campaign, averaged over the month.
  • Delivery method – whether bids are spread throughout the day or accelerated at the beginning.
  • Campaign priority – high, medium, or low.

Targeting and scheduling

To fully qualify the leads coming from your Shopping campaign, adjust the target location to those you ship and sell to, and amend the scheduling dates and times to when your audience is most likely to be online.

Ad groups and product groups

Finally, you can tailor your campaign to different products by creating ad groups and product groups within a campaign.

Each group contains different products for which a specific ad type (Product or Showcase), maximum bid, and negative keywords are set.

Once you have created a Google Shopping campaign structure in Google Ads, Google will automatically generate and place Shopping ads in the search results and on the Shopping tab.

When to use Google Shopping

To benefit from Google Shopping ads, it’s important to know when to use Google Shopping ads for your eCommerce store. This rests on three factors:

Time

You need time to set up, monitor, and optimize your Google Shopping campaigns. While a basic campaign is quick to set-up, the more granular you get with settings and optimizations, the better the results you see.

Products

You want mainstream products to advertise and drive conversions with. Google Shopping works based on search criteria – therefore, if users aren’t searching for your products, your ads won’t appear (we explore this more in the next section on Google Shopping and Shopify).

Tip: use Google Trends to explore common and trending search terms.

Budget

You need money to learn Google Shopping and test different strategies with, and then you need budget to win bids and compete against your rivals.

Google Shopping and Shopify – what’s the problem?

If you heard that Google Shopping isn’t best suited to Shopify sellers, you heard right.

Most shoppers use Google to search for common, everyday items. However, the products that perform well on Shopify stores are typically niche products. These products are more likely to be discovered than searched for – meaning that your Shopping ad isn’t going to make many impressions.

Therefore, your time and advertising budget are best spent on a platform designed for product discovery, such as Instagram. On Instagram, ads are targeted to different audience types making it easier and cheaper to get niche products in front of the right people. In fact, despite having an 18% lower CTR, the average CPC for clothing on Google is 35% more than Instagram/Facebook – showing that Instagram is cheaper and more effective than Google for certain products.

As an example, let’s say you sell pressed flower necklaces via Shopify. Google Trends tells us that searches for “pressed flower necklaces” are very low, and searches for “necklaces” are very common. This means your Shopping ad won’t have enough search volume to generate targeted leads and will be too expensive to generate general leads.

In contrast, an ad on Instagram is shown to anyone with an active interest in flowers, unique jewelry pieces, and gifts – meaning that your ad will make more qualified impressions at a lower CPC rate.

Instagram advertising also allows you to play with different advertising strategies to generate leads, including photography styling, product pairing, videos, influencers, and more. This is perfect for showing off your brand and style to engage audiences and increase CLV – much more powerful than a white background photo on Google Shopping.

How to optimize your Google Shopping campaign

After creating a basic Google Shopping campaign structure and generating initial results, there are some Google Shopping optimization tactics for improving success.

Optimize Google Merchant Centre

Since Google pulls product information directly from Google Merchant Centre, it’s the first place for Google Shopping optimization. Specifically, you should:

  • Fix product feed errors by going to Products > Diagnostics and following the instructions to clear any disapproved items. 
  • Define shipping costs in Shipping and returns so Google can make an accurate price comparison. 
  • Optimize product titles and descriptions with relevant keywords. 

Optimize website images

Google Shopping pulls product images directly from your website or store. Any images of low quality or against Google’s regulations may prevent your ad from being shown; any images not up to consumer expectations will prevent your ad from being clicked.  In short, invest in your photography.

Use analytics

Google Ads provides plenty of campaign metrics for monitoring and analyzing the performance of your campaign. The main pages to check are:

  • Product groups page – for information on product groups, including maximum CPC, impressions, CTR, click share, and conversion metrics.
  • Products page – for information on the performance of individual products, including impressions, clicks, CPC, and conversions.
  • Predefined reports – for performance data across metrics, including categories, brands, and channels.
  • Auction insights report – for comparison performance data on other advertisers.
  • Bid simulator – for understanding how different product group bids might affect traffic and conversion.

Use this information to test and tailor your campaign structure, bidding strategies, and optimization techniques.

Add negative keywords

Google Shopping doesn’t use keywords to determine when to run ads, but it does use negative keywords to determine when not to run them.

Use the Search Terms Report to analyze and add negative keywords to Shopping campaigns, focusing on irrelevant terms, competitor names, and generic keywords.

Note: Many brands target their competitor’s names in the search results, hoping to present themselves as an affordable alternative and steal customers. This is a risky strategy. Many shoppers will accidentally click the first ad and quickly head back to Google for their intended destination – costing you a click and increasing your bounce rate. Proceed with caution.

Play around with pricing and bids

Money matters a lot when it comes to Google Shopping. Google won’t show overpriced items as often as competitive items, and a small increase in bids can increase your impressions and conversions substantially.

The message: play around.

Use campaigns, ad groups, and product groups

The most impactful Google Shopping optimization is enhancing your Google Shopping campaign structure using different campaigns, ad groups, and product groups.

A basic campaign with one ad group and one product group might be easy to manage and monitor, but it means you bid the same amount per click or engagement, regardless of the product or search term.

Instead, use multiple campaigns, ad groups, and product groups to align priority, budgets, bids, and negative keywords with different product criteria. You can use basic criteria such as brand or product type or more advanced criteria such as sales volume or profit margin – helping you create different advertising strategies.

6 essential Google Shopping strategies

Once you begin to understand how Campaigns, ad groups, and product groups work, you can start implementing different Google Shopping strategies to drive sales in the most cost-effective way.

Six essential Google Shopping strategies to know about are:

1. Priority-based strategy

A priority-based Shopping strategy uses three campaigns of high, medium, and low priority. Once the highest priority campaign runs out of budget, the next lower priority campaign will bid, and so on.

This can be used to drive traction for the products you most want to promote, based on certain criteria. Common examples include:

  • Branded products > generic products > all products.
  • Mother’s Day items > Best sellers > other products.
  • New products > sale items > all products.

2. Profit-based strategy

A profit-based Shopping strategy creates campaigns and allocates budgets based on product profit margins. This enables you to concentrate your budget on traffic that generates the best ROI, protecting your bottom line.

You can do this by creating an ad or product group with a profit margin, brand, product category, or product price criteria that separates your high- and low-margin products.

3. Search query-based strategy

A search-query Shopping strategy segments campaigns based on the search terms used in Google. This is done using negative keywords.

For example, you can create a higher bid campaign for branded search terms, such as “Nike running shorts” and a lower bid campaign for generic search terms, such as “running shorts.”

4. Product-based strategy

A product-based strategy allows you to tailor campaigns for individual products, using product ID. To do this, place each product within its own ad group and set a relevant bid.

This strategy gives you the most control and insight into different products but can be incredibly time-consuming to set-up if you have an extensive product selection.

5. Remarketing strategy

A remarketing strategy tackles your cart abandonment problem by increasing bids for shoppers who left your website before making a purchase, and are therefore more likely to convert than a cold lead.

You can even segment this audience further, according to what pages they visited – increasing bids for high-margin products or pages further down the buying funnel.

6. Dayparting strategy

A dayparting strategy optimizes campaigns for different days and times of the week – tailoring your bids according to when they perform best.

To get started with this strategy, you need to analyze historical Google Shopping performance to determine when ads perform consistently better. Then create campaigns for different days and times, increasing bids during high performance and lowering during low performance. Alternatively, you can use a bidding script to automatically adjust bids for you.

Improving the ROI of your Google Ads

But it’s not all bad news. If you’re intrigued by the benefits of Google Ads, but put off by the spend, there are ways to increase your ROI.

1) Add fast shipping tags on your PLAs

Deliverr merchants can add fast shipping badges on their Google product listing ads or Buy on Google listings. Use these fast shipping tags to stand out from the competition and capture buyers before they go to a competition or crowded marketplace.

Learn more about Google Shopping fulfillment with Deliverr.

2) Ratings and reviews

Google Shopping ads display your star ratings, making customer reviews crucial for click-through success and profit. Improve your customer service by quickly responding to and solving issues, providing up-to-date order information including tracking details, and ensuring that your products are of the same high quality from when they leave your warehouse to when they reach your buyer.

3) Increasing conversions

The higher your conversion rate, the more profitable your Google Ad spend becomes. Increase customer conversions by appearing on fast shipping programs such as Walmart Free 2-Day Shipping, using high-quality images, and providing informative descriptions.

4) Increasing average order rate

The more your Google Ad customer spends, the more profit you make after paying for the click. Increase average cart spend by recommending additional and relevant products and offering perks such as free shipping. Then, increase your customer lifetime value to further increase your ROI, through loyalty programs, fast shipping programs, and regular engagement.

5) Reducing other costs

To increase your profits without increasing your ad spend, look at other areas in your business where cost savings can be made. Is in-house fulfillment the cheapest option, is branded packaging affecting your costs and delivery speeds, and are you selling on the most cost-effective marketplaces? Calculate your costs and take steps to reduce them.

Google Ads takeaways

Google Ads, specifically Shopping Ads, are brilliant at reaching new customers with a high-intent to purchase before your competitors do. They also come at a cost. Improve the return on your Google Ads investment by offering great reviews, fast shipping, and informative descriptions to increase customer spend and conversions, and improve your customer lifetime value.

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