6. Google Shopping Campaign Structure
Save Time and Profit with the Right Structure
If you don’t have time to do it right, what makes you think you’ll have time to do it over?
Seth Godin, author and marketer, on why hurrying almost always makes it take longer
You have the right Google accounts setup, you have a strategy, and your Google Shopping feed is looking sweet. There is a lot of work to do during the setup phase because it creates the foundation for shopping and Performance Max success. Everything you’ve done so far will help your products show for the most relevant searches to increase click-through-rate, reduce the cost of irrelevant clicks, and meet your business goals.
The time has come to create your first shopping campaign with the right structure.
The First Campaign—Right The First Time
We’ll start from the beginning to help you know the campaign type inside-out. If you are to succeed at Google Shopping, you need to know every lever you can pull and its effect. At Digital Darts we know the Google Ad platform like our own child. That does not guarantee success from it, but we’re confident you will get maximum profit through us if it can happen. This is the level of confidence you want to have in your knowledge of an advertising platform and why this Google Shopping book leaves no stone unturned.
When you create any new campaign, you’re asked for an objective. There’s no need to select one. Objectives lets Google recommend features and settings to help you achieve the results that matter most to your business. Instead, opt to create a campaign without an objective then select “Shopping”.
The conversion goal to select is the one best setup to track purchases in Shopify. This conversion should use all Google Ads conversion features like enhanced conversions and cart data to collect comprehensively accurate purchases.
Next you’ll select the Merchant Center account that you linked earlier to Google Ads.
Once you continue, you’ll be prompted to type a campaign name. The name reflects how you want the account organised. A thought-out account structure helps optimisation, avoids products not being advertised, and saves you time navigating through an unclear account.
You are unlikely to get a perfect structure the first time you set up an account. That is okay as changes can be done later. You have to adjust your strategy as the data tells you.
I like the following naming convention for consistency as it tells me core information at a glance:
Website Name – Campaign Type (e.g. Shopping) – Keywords of Insight (e.g. Brands, Bestsellers, 0-Click Products)
Following the campaign name, you can create an inventory filter from product attributes. By default, all products within your uploaded data feed are included in your shopping campaign. An inventory filter is rarely required for the first campaign.
If you do not want to advertise certain products, exclude them from the feed so you don’t have to worry about inventory filters.
There is a “Local Products” feature in shopping campaigns. The option enables Local Inventory Ads, discussed later in the guide when we cover Merchant Center programs. A brick-and-mortar store should have at least one shopping campaign setup for online inventory and another campaign for local inventory ads.
The “Campaign URL options” can be ignored unless you have tracking software like Triple Whale or Northbeam that want you to input their tracking parameters.
Bidding and Budget Settings
The bid settings cover how you pay for ads. There is a buffet of automated and manual bid strategies. Manual bid strategies use to perform the best, but Google’s machine learning generally makes automated bid strategies superior.
The less time you spend tinkering with bids, the more time is available for strategizing, writing ad copy, improving your feed, and doing other tasks artificial intelligence cannot yet do. I think about working with Google’s machine learning as letting it do the grind work with my surveillance. You still need to monitor the automation.
There are three automated bidding strategies to consider for your shopping campaign:
- Target ROAS: Google will automatically increase or decrease your bids every time your ad is eligible to run to try meet your defined ROAS. The bid strategy will do better at keeping bids in-line with your ROAS goal the more conversions are generated. Keep an eye on a campaign using the target ROAS bid strategy. Store owners who use Shopify’s Google channel often come back to find they’ve reached lots of people with no conversions.
- Maximise clicks: Google automatically pushes your ads to get the maximum number of clicks. It does not consider conversions or revenue. This strategy is favoured early for a campaign with low budget and lots of products because it does exactly what it says on the tin.
- Enhanced manual CPC: Google increases a manual bid if it is more likely to convert or decreases the bid if it is less likely to convert. Also known as “ECPC”, it is the most popular bidding strategy among advertisers. The bid strategy gives advertisers control with manual strategies like bid modifiers on audiences, devices, and location. The ECPC bid strategy is hard for people unfamiliar with Google Ads or those with little time, as manual bidding optimization is needed.
If your budget is less than $20 a day and you have a SKU range of over 100, try the maximise clicks bid strategy. I suggest a ECPC strategy for new accounts. As the ad account matures to 50 conversions a month, swap to a ROAS strategy since the bid strategy will be slightly stable. There’s more on these later as well as bid management when we dig into bid strategies for account optimisation.
For now, select a ECPC strategy, enter your budget, and leave the priority setting to “Low”.
Selecting an Intelligent First Bid
If you decide on the manual or enhanced CPC bid strategies, how do you know what to pay per click? One option is to select anything between $0.1 and $10 per click, then adjust it based on performance. The second option is to approach it mathematically to give products the best chance from the beginning.
Firstly, consider the maximum bid you are willing to pay per click. To figure out your maximum bid, you need three bits of information:
- Profit margin: Naturally, the only way you can make money from Google Shopping is to make sure your profit margin is more than your click costs. If you pay more on clicks than the marginal return, you’re not making money.
- Product conversion rate: Each product is likely to have a different conversion rate, which is determined by a number of factors mainly on site. Once you understand how often your product converts, you can work out how much traffic you need to send to the store to hit your goals.
- Cost-per-acquisition (CPA): The last step you need to know is your CPA. How much are you willing to pay for a sale? This is determined by your profit margin.
When you put these together, you get the stats to work out your maximum CPC. Let’s say you sell novelty sweaters and you want to work out the maximum CPC for your new range of sweaters with penguins on them. First of all, consider your profit margin. A simple way to figure this out is:
(Item price) – (Cost to produce and deliver your penguin sweaters) = Profit
The formula is not dead accurate given there are other costs to consider, but it’s a start given its simplicity. If the penguin sweater costs $10 to produce and deliver, and it costs the customer $25 to buy, your profit margin formula looks like:
$25 - $10 = $15 profit
Gather the conversion rate for the product from Google Analytics or Shopify. In Shopify, you can go to “Analytics” then view the conversion rate report. Multiply the conversion rate by your profit margin to work out your max CPC. Let’s say the sweaters convert at 3%. The equation becomes:
$15 x 3% = $0.45
That means your max CPC for the new penguin swear is $0.45.
The one assumption to this strategy is that shopping ads will convert at the same-rate as existing traffic to product pages. If a lot of your traffic is from organic search, this is likely a safe assumption as the traffic quality will be similar.
Search ads are likely to have a lower conversion rate than your shopping ads. In shopping ads, people know the price, name, and what the product looks like before clicking. If you base the conversion rate on results from search, check the conversion rate after you receive a good month’s worth of conversions from shopping ads.
My primary point in sharing these calculations is to help you pick an intelligent first bid. You must still work on bid management as data comes in order to hit “the sweet spot” for profit.
Targeting and Scheduling Settings
In the campaign settings, select to include Google search partners. The only way to tell if Google search partners will work for you is to try it. I see it work more often than not for Shopify stores. Simply checking the box is a way to drive approximately 10% more sales through shopping ads. Performance can be monitored later on at the campaign level then segmenting by the network.
Add the country or countries you are targeting for this campaign. Choose only countries proven to convert well. Countries not proven to convert can go into another campaign.
Later in the optimization chapter, you will add states and cities to the campaign. Doing this gives you the clarity to see the performance of, and modify bids for, each location. I have a free bonus template for you when we dig into this optimization phase so you don’t waste time adding each country, state, or city one-by-one.
For the last few location settings in your shopping campaign, I suggest you select Google’s recommendations of including “Presence or interest: People in, regularly in, or who’ve shown interest in your targeted locations (recommended)” and excluding “Presence or interest: People in, regularly in, or who’ve shown interest in your excluded locations”.
People can search then buy from another country they are living in even if you don’t ship to the country they search from. They may be holidaying overseas or buying a gift for a relative back home. The same idea applies for excluded locations: people may be in your target country searching for the product to buy in another country. You can review geographic reports when optimising the account to see if it’s worth changing this setting.
Strategy and Structure
When you create your first shopping campaign, you have one ad group that holds all products. Unless you have one product, we want to avoid the cluster.
The structure of shopping ads can be broken into three levels:
- Ad Groups
- Product Groups
Multiple shopping campaigns are possible with prioritisation settings, inventory filters, or negative keywords. Doing this lets you make a product not appear for certain keywords and lets you bid aggressively for high-performing products.
Below the campaign level, there are ad groups. There are two reasons to build multiple ad groups in a shopping campaign. One is to see the search terms generated by the product(s) in the ad group. This lets you add negative keywords at an ad group level to filter queries towards other products. The second reason is these queries give you insight into the keywords you can add, subtract, or prioritise in the titles and descriptions of those products.
Under the ad group level, there are product groups. There are two reasons to divide ad groups into product groups. One is the ease of reporting when looking at the division. The second reason is to customise bids based on feed attributes you set up when building your feed. If you divide by product type, you do so with the intent that the product types should have different bids because they will vary in performance. A product type of “refrigerator” should have a different bid than a cheaper “toaster”.
When you have more than one product, you need to decide how to segment your campaigns, ad groups, and product groups. A clear strategy saves you time and energy on a bloated campaign that’s difficult to manage.
Be mindful of the feed setup as you consider the segmentation. Did you use custom labels to group products in low margin, medium margin, and high margin categories? Are product types impacted by seasonal trends so you included a custom label with their most popular season? Does weather affect what you sell? Do you stock a wide range of brands? Zoom-in on the feed data of core products that you need to alter to meet those goals.
I recommend the most important attribute that affects sales be the first level of division at the campaign level. The attribute you use to divide multiple campaigns is best done on data collected from ads running for several months. At the ad group level, I divide products by an attribute I want to see search terms to help optimization of those products. Then at the product group level, I divide to get the bid or reporting control to meet profit goals.
You can divide an ad group up to seven levels. How far you go is a balance of time and control needed for performance. A tiny number of advertisers have an ad group for each SKU, which unnecessarily creates extra work upfront.
To further help you segment campaigns well, let’s delve into four of the most popular segments the Digital Darts team uses for Shopify clients and when each can be appropriate for your business. The right Google Shopping campaign structure gives you increased efficiency and revenue.
Large brands with a recognisable name and product offering are placed into their own ad group or even campaign.
Advantages to this method include budget allocation, custom bid strategies, and search-term prioritisation. Brands and models typically convert better than generic searches so you want to divide campaigns by brand then use the King and Peasant Strategy to help sales. You’d divide by brand at the ad group level to see what search terms triggered for the brand’s products.
With this in mind, like all segmentation, you need to adjust your bids as the data comes in. We have several clients who stock known brands yet branded queries convert no better than unbranded searches.
The disadvantages in segmenting first by brand can come in areas such as seasonality of products where off-season inventory might get lost behind the inventory that moves all-year round. When the time comes to push seasonal inventory, the budget can be too heavy towards perennial products that seasonal inventory might not get their day in the sun. You can get around this of course by dividing the “brand” into a custom label of “season”. You may find dividing by “season” then “brand” better meets your goals.
2. Category and Product Type
At Digital Darts, the most common segment we use for client ad groups is the product type. The Google category for taxonomy in the feed is often built from the product type in DataFeedWatch, so it is redundant to then segment by category.
You can create clear separation for shopping campaigns where you may not have a strong brand offering from a widely-known manufacturer. I like separating by product type at the ad group level for the reason we build out ad groups—to see search terms for products in that ad group to help optimization. Another reason is product types usually have similar prices to each other which makes it easier to eye bids for ROAS goals.
If your products have an inaccurate Google category, they may appear for irrelevant searches then waste money. A refrigerator categorised as a toaster will be bid on as if it were a toaster. Return to the previous chapter to optimise your Google Shopping feed for accuracy and completeness.
3. Custom Labels
A great feature of the Google Ads platform is the option to subdivide products with your own category that is the custom label. You are able to use any label as a filter when reporting, monitoring, and optimising.
In the previous chapter, I explained how to use custom labels for the price range, profit margin, season, promotion, sell-rate, and priority. Custom labels have no impact on the ad and cannot be seen by the searcher. The labels you use are up to you.
4. Product ID
Campaigns can be segmented by the product identification number or SKU. The Google Shopping campaign structure may be useful when a product has variables like shoe size that must fit search demand.
This is my least favourite way to structure campaigns. There are better options plus people rarely click then buy the same product from the shopping ad.
Product ID campaigns are a pain to manage. Three campaigns are always going to be easier to manage than fifty. What is easier to manage will often be better managed. If your inventory is seasonal or fast moving, you will struggle to fit product data into the right campaigns. Furthermore, Google’s machine learning does a poorer job with a large number of campaigns, compared to clustering them, since less data flows through each.
The King and Peasant Strategy: How to Use Campaign Priorities and Negative Keywords for Profit
The biggest difference between search and shopping ads is that shopping uses the feed rather than keywords to trigger ads. You may then think there’s nothing you can do aside from feed tweaks to shape when your shopping ads appear. That is wrong.
The King and Peasant Strategy lets you treat the precious few keywords that drive the most profit in your Google Ads kingdom, different to the majority. To grow your Google Shopping ads, you want to pay more for keywords that are Kings and less for peasant keywords, rather than treating every keyword as equal.
The first part of the strategy uses the priorities campaign setting. The priority determines what campaign should appear for the eligible keywords. A high priority campaign will show for the most queries. It has to do the most work. Given the campaign receives the most diverse search queries, you bid the least on it. You pay the least for peasants.
The second part of the strategy is negative keywords. A negative keyword stops an ad from showing for that particular keyword. When you apply a negative keyword to one shopping campaign that has a high priority, but not another that has the same products at medium or low priority, you can pay more for your best search terms and less for your lower performers. The result is more sales and savings on wasted ad spend.
|Nobles||All that you want to appear in the Kings campaign.||Medium||Medium|
|Peasants||Maximum. All that you want to appear in the Nobles and Kings campaign.||High||Low|
If you were to apply the strategy to the mobile phone market, the campaign structure could look like:
|Tier||Search Query||Negative Keywords||Priority||Bid|
|Kings||buy iphone 14 pro max||None||Low||High|
|Nobles||iphone review||14, pro, max, buy||Medium||Medium|
|Peasants||smart phone||14, pro, max, buy, iphone||High||Low|
The King and Peasant Strategy is taught more within the next optimization chapter. The strategy is best done using conversion data after your campaigns have run for sometime.
Spend time analysing the best structure for a Google Shopping campaign to save time and heartbreak compared to charging in to try everything at once. Make constant analysis of ad data for continuous improvements that lead to reduced ad spend or more revenue overtime. By carefully segmenting the campaigns for your store, you will see results that can be quantified, data that can lead you to selling smarter, and ad success that ensures your customers find the right product.
Let’s dig into other optimization strategies for your Google Shopping campaigns. I will go more into the King and Peasant Strategy.
- 1. The Power of Google Shopping
- 2. How Does Google Shopping Work?
- 3. How to Profit From Google Shopping
- 4. How to Set Up Key Google Products for Ad Growth
- 5. Your Google Shopping Feed in Shopify
- 6. Google Shopping Campaign Structure
- 7. Performance Max Campaigns
- 8. Optimise Your Google Shopping Campaigns
- 9. Google Merchant Center Programs
- 10. Expand Beyond Google Shopping