How to Optimize Your Google Shopping Campaigns

optimize google shopping campaigns

Google Shopping optimization sounds pretty fancy to throw around. But what does it actually mean?

To me, it means becoming more efficient at reaching your goal.

That means that you should know what your goal is before jumping into tactics.

And that’s not different if you want to optimize your Google Shopping campaigns. Do you want to get more clicks, a lower your cost per click, improve your return on ad spend (ROAS) or want to make all your campaigns more profitable?

Depending on the goal you pick, your tactics will be different.

In this article, I’ll show you the various levers you can pull in your campaigns to reach your goals. These are battle-tested tactics from work that I’ve done with my clients, which makes them perfect to apply in your campaigns.

The great thing about Shopping campaigns is that Google does most of the heavy lifting for you. Their system automatically creates ads with your products and match them with relevant search queries.

So once you’ve set up your shopping feed, it’s often unclear what more you can do to actually improve your results.

You can follow Google’s default recommendations: increase the CPC and raise the budget.

google shopping campaign limited budget
Should you just raise the budget? Or is there something else you can do?

But spending more immediately cuts into your profitability. So let’s explore some other things you can do.

I’ll start off with the basic optimization tasks every advertiser should do and move on to more advanced tactics afterward.

Here are the various pieces of Google Shopping campaign optimization that we’ll cover:

  1. Adding negative keywords
  2. Google Shopping campaign structure
  3. Smarter bidding
  4. Competitive intelligence in Google Shopping
  5. Shopping feed optimization

1. Adding negative keywords

The first stop of your Google Shopping optimization journey is your Search Terms report:

google shopping search terms report
You can find the Search terms report in the Keywords tab of your Shopping campaign

This report shows you all the search queries that people have used for before they clicked on your your product listing ad.

Irrelevant search queries

To start off I look for the lowest hanging fruit, sort the search queries by Impressions and sift through the list to find the ones you absolutely don’t want to show up for.

For example: exclude searches for products you don’t sell: children instead of adult sized clothes, other colors or variations that you don’t stock

You’ll always find a few of those and these clicks are the equivalent of throwing money in the trash. So add them to your negative keywords to make sure you don’t pay for these searches anymore.

Besides these irrelevant searches, scrolling through this list you’ll find other keywords that are not completely irrelevant but you’re unsure if these are beneficial to your store.

Competitor search queries

These are product searches that include a competitors name together with an interesting keyword:

google shopping competitor keywords amazon

The above search terms report for one of my clients shows exactly this.

They sell consumer electronics and have fierce competition from players like Amazon, Walmart & Target. The report above shows the generic searches + amazon.

As it turns out, the searches that include Amazon aren’t completely worthless, many product ads have a high click-through rate and there was also a sale. But in this case, it is a valid question to ask whether we should keep advertising on these searches. For this limited set of keywords, we spent $58.76 on ads to make $69.99 in revenue, which is not even close to break-even.

In this case, we haven’t excluded amazon as a negative keyword for all of our campaigns, but we have excluded it for a couple of specific product categories where we couldn’t make it profitable.

Check in your own account if it makes sense to advertise on these competitor search queries. But if you’re hurting for profitability, you probably want to add these competitors as negative keywords.

Very generic search queries

You can’t pick what keywords you want to advertise on we Google Shopping (although you kind of can, which I’ll show you in the next section).

So another thing you’ll see in the search terms report of your shopping campaigns are very generic search queries.

google shopping search terms report generic search queries

The search terms report above shows a couple of those very generic search queries. Look at the clickthrough rate of that first search query: 0.02%!

It’s a keyword that’s not irrelevant, but it’s just one of the most generic descriptions of the category of one of the products that we’re selling.

Here is another example of that:

google shopping generic search queries example

If you were selling a unique microphone with a specific use case, imagine being in the above line up. The chances that your product is exactly what the person is looking for are pretty slim. And even if they click through, they probably won’t buy.

Compare that to sites like Amazon, Walmart or Sweetwater. They just want to get their foot in the door, because they know that once people click over to their sites, they got a huge catalog of related products they can sell you.

Very low clickthrough rates will also reflect negatively on the quality score of your product ads, which is why you want to avoid these.

So if you’re in a competitive niche, you probably want to stay away from those short tail keywords with huge search volumes. You can add them as negative exact matches to your search campaign.

This will be a lot of work at first because you’ll see a lot of similar keywords popping up. But just keep adding these high volume/low intent keywords and their volumes will drop.

While at first, it seems you can only exclude specific keywords from a campaign, in the next section I’ll show you how you can actually change your bid depending on the search query. Just like you do with search campaigns.

2. Google Shopping campaign structure

Improving campaign structure of your account is where I see the best results.

Campaign structure gets to the heart of effective Shopping campaigns. A good campaign structure enables you to bid on the products AND search queries that are most relevant (= valuable) to you.

In what follows, I’ll explore the 4 most common campaign structures.

A single undivided campaign

The simplest campaign structure is having a single campaign, a single ad group and a single product group with all of your products.

That means that every product and every search query is equally valuable to your business. This isn’t ideal for your optimization efforts: all you can do is raise the max CPC for all products.

Use this if you’re starting out, or if you’re making enough margin and can’t be bothered to invest more time to get better.

A single campaign with multiple products groups

The next logical step is to start breaking out different product groups based on some of your products’ attributes:

google shopping product groups attributes

Google Shopping allows you to subdivide your product groups based on Category, Brand, Item ID, condition,  product type, channel, channel exclusivity or one of five custom labels.

You can also create multiple levels. For example, you first subdivide all your products based on product type, then you divide them by brand and on the third level by Item ID.

This campaign structure allows you to set bids based on the category, brand or individual product level.

This is the most common campaign that I see. It keeps things simple but allows pretty granular control.

If you’re not happy with the default attributes to subdivide your campaign on, you can also use custom labels to add extra information into your feed.

With a lot of clients, I add price or margin information in these custom labels. That allows me to bid more aggressively for higher priced, higher margin products while keeping bids lower for the less profitable ones.

Multiple campaigns with different products

Just like you split the product groups, you can also create a campaign based on the attributes we’ve discussed above.

To do that, you need to jump into the settings of your newly created campaign and use an Inventory Filter to only include part of your product offering.

google shopping campaign settings inventory filter

This means you can have separate shopping campaigns based on brand or category.

Or one that I’ve often seen and used, is a custom label to put your bestsellers into their own campaign.

The biggest advantage of multiple campaigns is that you can set a specific budget for each campaign. That means that you can allocate 80% of your budget to your bestsellers, and 20% to your lesser products.

If you want to expand your campaigns to another country, you’ll also need to use a separate campaign.

Multiple campaigns with the same products

This one is the most complex campaign structure in this list.

Having multiple campaigns with the same products allows you to target a specific set of search queries with each one.

Yes, you CAN target search queries with Google Shopping campaigns. It’s also called search level query bidding.

The biggest advantage of this setup is that you can set different max CPCs based on how valuable a search query is to you.

The most common use case for this is to split branded search queries from generic search queries. You can bid aggressively on the branded search queries, while sharply reducing the max CPCs in your generic shopping campaign. This is a great alternative approach to excluding them from your campaigns.

google shopping branded vs generic campaigns

The example above are 2 campaigns for the same brand, one is a campaign that targets branded search queries, the other one targets generic queries.

Check the difference in CTR & CPC between the two. If you wanted to reach the same result with one campaign, the overall profitability would be a lot lower because your average CPC would be a lot higher.

Pro tip: If you use this campaign structure, be sure to get your campaign priority settings right. It’s an essential part of getting the keyword filtering to work correctly.

3. Smarter bidding

Once you’ve set up your Shopping campaigns and got your campaign structure right, most of the optimization work will be about getting your max CPCs to the right level.

High enough that you’re getting enough clicks, but not too high that you’re hurting for profitability.

Google doesn’t care about your profitability. Their focus is on getting you to spend more. So blindly raising budget or CPCs will have bad results for your business.

In this section, I’ll show you when it makes sense to raise your budget and CPCs, and after I’ll show you how to make this process a little easier.

When to raise the overall campaign(s) budget

If the campaign is profitable and Google indicates that you’re being limited by your budget or that you have a low impressions share, you can raise your budget.

The Budget simulator will show you the budget Google Ads recommends, and its impact on your campaigns. In this case, they estimate that $9 extra per day will get me an extra sale for this campaign.

Remember that these graphs are only a simulation. If you do raise your budget, keep a close eye on the results in the days and weeks after to make sure that you’re still making enough.

When to raise max CPCs

Often you won’t spend your budget, the only way to get more traffic is to raise the max CPCs. If you have multiple campaigns, raise the CPCs for the product groups in your most profitable campaigns first.

Remember that what you bid, isn’t necessarily what you’ll actually spend.

That said, you will reach a ceiling for your max CPCs. And for some products you might hit it pretty quickly.

I have a client that has a conversion rate of 7% in his online store. But the clicks simply get too expensive. So we’re capped out at about 50% of all potential impressions.

If you run into this problem, you’ll get a few ideas on how to break through in the next sections.

Simplify your work with bidding strategies

A bidding strategy is the logic behind why you would increase or decrease the max CPCs for a specific product in a specific campaign.

Manual CPC

The easiest version of that is what Google Ads calls “Manual CPC” meaning that you go through your products groups and adjust the CPCs based on what you see.

For example:

In one of your campaigns, you see that a specific product sells well, but it doesn’t get many clicks, if you increase the CPC by $0.1, you might get more clicks.

Then a couple of days later you check if that increase had the desired effect.

Google Shopping bid stratgies
Other bidding strategies for Google Shopping

The other bidding strategies are what Google Ads calls Automated strategies. The automated part means that you give Google more control over the actual bid. Note that Google Shopping campaigns have less of these automated strategies compared to search campaigns.

Maximize clicks

With the Maximize clicks bidding strategy, you’re giving Google the reigns. They will set CPCs in order to get the maximum possible clicks.

Google knows exactly which products/clicks are the cheapest, so that’s where they will shift your budget.

Since my goal is to sell more, I want the clicks to go to the products that have the highest likelihood of converting, not to search queries which happened to be a couple of cents cheaper.

Enhanced Cost per click

The Enhanced cost per click or ECPC bidding strategy is very similar to Manual CPC, but Google has the freedom to raise the max CPC that you indicated if it thinks a specific click will result in a sale. The technical explanation is pretty vague, but Google claims to use extra information about the likelihood that a user will convert to adjust your bid.

google shopping enhanced CPC
Enabling enhanced CPC

The CPC adjustment with this strategy used to be limited to 30% of your bid, but this has been removed in recent years.

Google Ads recommends that you have at least 200 clicks in each product group of your campaign before enabling this bid strategy.

I usually use this once the Manual CPC has brought in enough traffic.

Target ROAS

With the Target Return on ad spend or ROAS bid strategy, you’ll set a conversion value that you would like to achieve for every dollar/euro/yuan you put into your campaigns.

google shopping target return on ad spend ROAS

As show in the screenshot above, a Target ROAS of 450% means that for every euro I put into this campaign, I want to make €4.5 back.

Emphasis on want. Just because you want or need to make that return, doesn’t mean it will possible.

Maybe for the above ROAS, I can only make 2 sales per month from this campaign.

While with a ROAS of 300%, I might be able to make 50 sales.

You don’t know beforehand, that’s why you need to be on Manual or Enhanced CPC  for a while. Google Ads recommends 200 clicks per product group, but I would wait for about 20-30 conversions so you can get a feel for the conversion rates and the revenue.

This is again a very automated bidding strategy, so Google Ads will need time to get it going and to process any changes you make to the campaigns.

If you get this working, your task will become a lot easier.

But don’t fall asleep at the wheel. Because of the built-in automation, fluctuations like sales or competitor promos can have a big impact. So be sure to monitor these campaigns and put the necessary alerts in place.

Pro tip: To do the above, there are a ton of optimization software tools on the market that can help with this. A lot of them use techniques like AI & machine learning to improve your results. They make big claims, often are expensive and I have yet to see them provide adequate ROI. So be skeptical when exploring these tools.

4. Spying on your competitors in Google Shopping

It’s important to go over all of the tasks I’ve described above. These will put your Google Shopping campaigns in the best possible shape.

But your campaigns and your store doesn’t exist in a vacuum. Your competitors play a big part in this.

Seeing how you stack up and what they do better will give you more ideas to improve your own campaigns.

So in this section, I’ll show you what information to pay attention to.

Search impression share

The Search impression share is the percentage of search results that your product listing ads appeared in compared to all the potential search results they could have appeared in.

A 100% search impression share (IS) means your advertisements appeared every time someone searched for a relevant keyword.

The two reasons why your ad might not show every time someone searches for your product are insufficient budget & low ad rank.

To see this in your Google Ads account, go to the Campaigns tab, select the Columns icon, click Modify columns, Competitive metrics and add Search Impr. shareSearch Lost IS (rank) and Search Lost IS (budget), Click share, Search Abs top IS then click Save.

google shopping search impression share metrics
Competitive metrics in Google Shopping

Let’s break down all of these columns and discuss what you can learn from the numbers in the above screenshot.

Search Impression Share

As I mentioned above, this one is the key metric. It indicates what percentage of searches you are appearing for. It depends on your approach what number you want to hit.

With a search impression share of 100% your ads show up for every related search, but maybe that’s not really profitable.

For the campaigns where I’ve split them into branded and generic queries, my goal is to maximize the impression share of the branded queries. The generic impression share might be a lot lower, because I can’t bid high enough to appear all the time.

Search Absolute Top Impression Share

Absolute top impression share (Search Abs top IS in Google Ads) shows you the percentage of searches that you took the top slot of all the products listing ads. That’s the product highlighted in pink below:

google shopping absolute top impression share

Google decides the order of the products depending on price, reviews, relevance, etc. Very often that top slot will be a well priced best seller. It doesn’t make sense to try and be there for every product, but in some cases it is interesting.

Search Lost IS (budget)

Lost impression share because of budget happens if your competitors are willing to spend $200/day and you are only spending $10/day. If there are $200 worth of clicks to be had every day, you won’t be able to show up for each one of those searches.

If the campaign is profitable, you can simply increase your daily budget to start showing for more impressions.

Search Lost IS (rank)

More common is that Google Ads can’t spend all your budget. Your budget is set at $10/day, but you’ve barely spent $25 over the last 7 days.

To explain why this is happening, you need to know a little bit about the Google Ads auction system.

Quality score in Google Shopping
For every single search that happens on Google, it identifies which advertisers want to appear and what advertisements they want to show (which image, title, description, landing page, etc.).From all these data Google calculates a Quality Score.
This score indicates how relevant Google thinks your product listing ad is to the search query in question. This is common knowledge for Google Search campaigns, where you can actually see the score Google gives you.
But in Shopping, they don’t give you a score. What you do have is the Lost impression share (rank) metric.
In Google Search, Ad rank is calculated by multiplying the max CPC with the quality score. That means that products with a high-quality score but a small bid can compete with a low-quality score product that has a high bid.

If your Lost impression share (rank) is high, Google doesn’t think your product listing is very relevant for that search query.

You have a couple of options when this happens:

  • Improve your ad rank by raising your bid
  • Refine search queries that your product listing ads appear for, this will improve your CTR which could raise your quality score
  • Improve the data quality of the product feed you submit to Google (read on to learn more about this)

This is where the biggest potential is for most campaigns, but it is also the hardest part to get right. This is because you can’t directly influence this Quality Score.

Click share

The last of the competitive metrics you can find in Google Ads is Click share. This is the percentage of clicks that your ad got when it was shown.

You can use click share to spot searches where a high impression share isn’t translating into more traffic. This might indicate that your ad is less relevant for that search query, or might indicate a pricing difference.

Auction Insights

The competitive metrics described above give you information on how your account or campaigns are doing, the Auction Insights report shows you how you stack up against your Google Ads competitors.

google shopping auction insights report
Example of the Auction Insights report for a Google Shopping campaign

This report, available on the account, campaign and ad group level will show you which other advertisers are advertising on the same keywords then you are.

I already covered the Impression share above, so let’s look at what other interesting things you can take away from this report.

For this specific campaign, you can see that Etsy takes the majority of the Impressions.

Etsy is advertising in about 70% of the impressions where this advertiser’s ad is showing (= Overlap rate)

This advertiser is ranking higher than Etsy’s ads in 24% of the cases where both ads show (= Outranking share)

Be sure to look at this report for different time frames, it allows you to monitor the evolution of your competition or the impact of your optimization work.

If you see a lot of big players in the report like Amazon, Etsy, Walmart, target you know it’s going to be hard to match them budget-wise. So instead of blindly raising your budget & CPC and hope to out-do them, you can try to figure out which product categories or brands they are spending hard on.

Do this by running this Auction Insights report for different campaigns or ad groups.

Benchmark metrics

The Impression share metrics and Auction Insights report will tell you what is happening and who is doing it, not why it’s happening.

That’s something that the benchmark metrics will tell you.

Benchmark CTR and Benchmark Max. CPC tell you “how other advertisers’ Product Shopping ads are performing for similar products”. (definition from Google)

You can add these as extra columns in the Product Groups overview:

google shopping benchmark metrics
Example of the Benchmark CTR & CPC metrics for Google Shopping campaigns

The first caveat is that Google always wants you to spend more, so these metrics would be perfect to push you to do so. So remain skeptical.

Let’s look at two products in the example above:

Product 1: the max CPC is €0.25, a bit above the Benchmark max CPC of €0.21. The CTR of 5.97% is more than double the Benchmark CTR. So this product is doing pretty well. From a ROAS point of view it’s also doing well, so perhaps we could even raise the max CPC higher to capture that 8 % of impression share that we’re currently missing out on.

Product 2: the max CPC is €0.25, well below the Benchmark max CPC of €0.43. The CTR of 1.97% is a bit above the Benchmark CTR of 1.59%. These two metrics indicate that if we increase the spend, we could capture more impression share. But the product isn’t profitable as it is, so we’ll have to keep a close eye on what happens if we increase the bid.

These metrics are available for each product group. So if you are only using a single product group, consider subdividing it to get a better idea of the performance of each product.

5. Shopping Feed Optimization

If you’ve done all of the above, your Google Shopping campaigns should be in good shape. But even then, you might not be able to hit the numbers you need.

So in this section, I’ll tackle the last piece of Google Shopping optimization: your product feed.

Before you implement any of the things below, all of the errors and warnings in Google Merchant Center should be fixed. Especially around product identifiers.

The next step is about improving the data in your feed to increase your visibility and competitiveness.

Product title optimization

Using keywords that people search for in your product titles can have a big impact on your clickthrough rate.

So make sure that you’re looking at your search terms report to include the most popular queries in your product titles.

But using them where people will see them matters even more. Here is a search for “fish oil”:

google shopping product title cut-off

The first 4 product listing ads include the word fish oil (or cod oil). But the last product gets cut off before. If I hover over the product, I can see the  full title:

google shopping product listing ad mouse hover

But most people won’t mouse hover (impossible on mobile), so pay attention to that product title cutoff. The exact character limit is always shifting but try to keep it as short as possible. The above results cut the titles at 30 characters.

So make sure you cover the most valuable keywords first.

Here are a couple of solid tips from VerticalRail:

google shopping product title optimization

Paying attention to word order can also increase visibility, as this is pretty different between categories. The folks over at Datafeedwatch compiled the following graph of the best title structure for each category:

google shopping product title word order

You have three options to make the actual changes to your product titles:

  • Change them in your back-end
  • Change them in your feed app
  • Use a data feed management tool to make these changes in bulk

A big benefit from optimizing your product titles for Google Shopping in your product catalog is that they can also help your  SEO game.

Competitive pricing

A lower price improves the quality of your product feed for your customer (it’s a better offer) and for Google (people will click your ad more often).

But of course, there is a clear limit on how low you can and should go. Often prices are already as low as you can go.

As described above, low clicks shares or low click-through rates can indicate that your offer (which includes your price) is less attractive than that of competitors.

It’s not just the product price, but the total price that Google can see.

Merchant Center knows what you charge for shipping so they include that in the Shopping results.

Some retailers are sneaky and will leave out shipping or “handling” costs from their product feed and merchant center. This will make their prices a lot lower and get them more visibility and clicks in the Shopping results. Sometimes they get away with it, other time not.

If you’re just getting started with price intelligence, start with a simple Google search to find the prices of your competitors for a selection of products.  A next step could be to invest in software that automatically tracks the price for a set of products. And the boss level is dynamic pricing, where you can match the pricing moves of big competitors.

Product image optimization

Getting new product images is expensive, so before investing you need to be sure that it will be worth it.

In Shopping, product images need to be simple and clear.

One that you can do is to make them stand out more, that could be as simple as flipping your product. Or come up with a small variation that will make you stand out:

google shopping product image optimization
Slight variations for a product image

Having the shoe at an angle, Kohl’s ad stands out a little. These are little tricks that don’t require a new shoot, but you might need some Photoshop tweaks.

Improve product descriptions

This one comes up a lot in google shopping optimization lists. But it’s not clear if this has a big impact.

From my own experience, if you have solid SEO optimized products descriptions, they will help you for keywords that might not be included in the product title.

You can double check your Search Terms report to make sure you have the top keywords in there.

But don’t spend too much time on these, as re-writing product descriptions can be very time consuming without any guaranteed result.


Watch some videos to optimize Google Ads Camp:


Working your way through all of the optimization tactics described in this article might bring you to the top advertisers on Google Shopping. That doesn’t mean that the work is done. To remain competitive, constant tweaks are needed, especially when it comes to bidding and monitoring your competition.

Google continues to make changes to the Google Shopping platform. So staying on top of new features or possibilities can help you get an edge over competitors that neglect this part.

blog, Google Shopping

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