How to structure profitable shopping ads

For many retailers, Google Shopping ads have the potential outperform Search campaigns for both costs and revenue. Unfortunately, profitable Shopping ads can be quickly become complicated to structure depending on the product types and inventory size. Whether you’ve already set up your Shopping ads and are looking to restructure or have yet to take the plunge, some basic planning and little time investment can help build a profitable Shopping ad structure.

Why structure is important

The structure of your Shopping ads is the first and most crucial step in managing successful Shopping campaigns. Making bad decisions at this early stage can impact the future performance of your campaigns, and creating a complex Shopping structure to meet the demands of your inventory can make poor structural decisions hard to spot and fix.

Having a good campaign structure has benefits beyond just easier management. A good granular structure will enable you to set bids based on the performance of certain product types or even individual products. This makes it easier to set bids to meet ROAS goals or KPIs and ensures that potentially high performing products aren’t grouped together with poorer performing products that may receive reduced bids.

A good structure will also mean better reporting, with an in-depth view of your entire inventory and across a range of variables such as geographical area, devices and demographics. Meaningful reports like this result in superior insights that are easier to spot and drive better decision making.

Campaign structure

The first part of setting up your Shopping structure is deciding on campaigns. These will help shape subsequent ad and product groups and the prioritisation feature makes this one of the most important parts of your set up. Each campaign can be set as either high, medium or low priority, and Google will look to this before looking at your bids when a product appears in more than one campaign and decides which one to serve.

The structure of your shopping ads should work to meet a campaign objective that is set in line with business goals or KPIs for profitable Shopping ads

Deciding on your campaigns and their priorities will depend on your business goals and product inventory. For example, a fashion retail business that sees product types perform differently depending on the location may divide their campaigns by product type and geographical area. Similarly, a retail business that sees performance differences predominantly depending on the brand may divide their campaigns by brand type. Essentially, campaigns and the subsequent ad and product groups should be segmented to reflect variances in performance, to provide the best control on bids and detailed reporting for future insights.

You may also want to consider the following when setting up your campaign structure:

  • Inventory volume – how many products do you have and how many campaigns and ad groups might be needed to best organise them?
  • How often your inventory changes – this can simply include how often you discontinue and add new products but is especially important in terms of seasonality. Do you stock a lot of products that are highly seasonal and need their own campaign and bidding strategy?
  • Your best performers – you need to understand the products that are vital to your bottom line, whether it’s new products and the latest technology or seasonal sale items.

Prioritisation

Once you understand your structure outline you can set up your campaigns and prioritise them. There are several strategies for this and no one is the perfect answer, the final decision will depend entirely on your business needs. Here are some general suggestions for deciding campaign priorities.

Profitable shopping ads will have campaigns set at priorities to meet business goals.

High priority: Promotions or long tail keywords

High priority campaigns are often set for promotional items. These are identified in your feed by a custom label. This can include sale items, end of season items or new products and ensures that these products receive priority over full price alternatives from other campaigns. As discounted items or the newest releases are often the most in demand, this strategy helps to boost conversion rates by bidding on these more successful items.

Alternatively, you can use high priority campaigns to capture long tail keywords. As with sale items, clicks that come from longer tail keywords are often consumers that are further down the funnel and are more likely to convert. You can achieve this by excluding short tail keywords and regularly checking search term reports to keep campaigns updated.

Medium priority: Product types, best performers or short tail keywords

Mid-priority campaigns can be composed of product types or business lines, particularly where performance varies, for example by geographical location. You can also choose to only include the strongest performing products in these campaigns, all segmented by Product ID.

If you have set up your high priority campaigns to capture long tail keywords you can also use medium priority campaigns to capture the other short tail keywords. This will help control costs with less risk of highly competitive short tail keywords eating up too much budget.

Low priority: all products

Finally, a low priority campaign is made as a catch-all for all products. Over time strong performers from this group can be added to the mid-priority campaigns for a more aggressive bidding strategy.

Ad groups

As with Search campaigns, Shopping campaigns should contain several ad groups for better management and bidding. They should contain products that are likely to be triggered by the same or similar search queries; you’ll see this reflected in your search term report if done correctly. You can also have different ad groups for variances in performance, for example, if the same product type shows significant differences in performance across devices or demographics. The example below shows that while maxi dresses could form an ad group of its own, this category can also be segmented further to reflect changes in performance and to make ad group level decisions easier.

Ad groups can be more or less granular to suit your product inventory but a granular structure often results in more profitable shopping ads.

Ideally, ad groups will have a limited number of product groups. This is essential to achieving the best possible control over ad group level settings such as mobile bid adjustments and negative keywords. Product groups that are too broad could contain products that vary in performance, and ad group level decisions could suppress potentially high performers or reward the wrong products.

Product groups

Ideally, product groups should be as granular as possible to set the right bids for the right products. Even if your product categories or types only contain a few items, these may vary wildly in performance. For the most granular product groups, a ‘Grip’ (Groups of individual products) structure is often advocated, where each product group only contains one product.

This type of structure can be achieved by creating similarly granular ad groups each containing one product group, with each product group simply subdivided by the Item ID. Alternatively, you can avoid having ad groups this granular and instead subdivide product groups by several layers before eventually subdividing by product ID and giving each item in the category or group its own product group.

Granular product groups can be subdivided all the way down to the product ID for profitable shopping ads.

Here’s how you can subdivide your products and what you should consider before starting:

  • Category – this subdivision is based on Google Product Category and can be fairly broad. Larger product inventories will likely see a vast number of products included in this subdivision, for example, Womenswear > Dresses > Maxi Dresses.
  • Brand – if you stock a range of brands and they have a significant impact on your revenue and/or vary in performance from each other and other product types, then you may want to look at subdividing by brand.
  • Item ID – the most granular way to subdivide. If you notice any performance difference between products then you should subdivide by ID. If you have categories of products that all perform similarly then this might not be necessary.
  • Condition – this subdivision is used to distinguish second hand or used products. If you sell any second-hand products you should always be using this subdivision as performance will undoubtedly differ to new or unused products.
  • Product type – this is a more granular approach to the category subdivision using product types specified in your feed and will usually be based on the breadcrumb categories on your site.
  • Custom labels – These labels can be applied to products in the feed to distinguish them in your Shopping campaigns when the above subdivisions won’t apply. For example, you can set up a custom label to identify items that are on sale, have another special promotion or are a seasonal item. You can then create campaigns, ad groups and product groups to capture these products with a special bidding strategy.

The perfect Shopping ad structure

There is no blanket structure for Shopping ads; the perfect structure will depend on your industry, business goals and product inventory. All businesses, however, should find a structure that enables the level of control needed to meet their business goals. Often this will be most granular setup, which will also provide the type of detailed reporting needed to make insightful decisions in the future. You can find further information in Google’s best practices for Shopping ads.

If you’re looking to set up Shopping ads for the first time and aren’t sure where to start, or if you’re already struggling with underperforming Shopping ads, contact one of our team today to discuss how we could help optimise and manage your PPC.

Katy Smith

Katy Smith

Digital Marketing Executive

Katy is a Digital Marketing Executive at Netmatter with a degree in Marketing. She has so far gained experience in various areas of marketing including email, copywriting, social media and SEO.

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