Introduction to Google Shopping – Best Google Ads format for eCommerce

Shopping campaigns promote online and local inventory, driving traffic to your website or local store. Product data from the Google merchant centre is used to set up Google shopping ads in the Google Ads interface.

How Google Shopping ads work

Merchants set up Shopping Ads campaigns in the Google ads interface alongside other formats like Search and display ads. Google uses these campaigns to create ads on Google and around the web where potential customers can see what you are selling.

Shopping ads combine photos and text, showing users a photo of your product, plus a title, price, and your shop name. These ads give users a good sense of the product you are selling before they click the ad, driving more qualified traffic to your site.

Shopping ads use product data from your Merchant Centre to determine how and where to show your ads. Google uses these details to match a user’s search to your ads. Google shopping ads are simple to set up as the user does not specify any keyword targets. They can, however, set negative keywords at the campaign and adgroup level to filter out non-performing searches (Standard Shopping campaigns only)

You can advertise products from your shop and your using two types of Shopping ads:

  • Product Shopping ads. These are based on the product data that you submit in the Merchant Centre.
  • Local inventory ads. These show local product availability by combining product data and inventory data submitted in your Merchant Centre account.


Like other Google ad formats, Shopping ads participate in an ad auction to determine the price of a click. You are charged a cost-per-click (CPC) when someone clicks your ad. You are only pay when a user clicks an ad that leads to the landing page on your website or the Google-hosted landing page for your local inventory. There is no charge when an ad is served but not clicked on.

When creating your Shopping campaign, you will decide how much you are willing to pay for each click. You only pay the minimum amount required to rank higher than the advertiser immediately beneath you, and you frequently pay less than your maximum bid.

Where Shopping ads appear

Shopping ads and free shopping listings appear in several locations across the web:

  • Shopping tab on Google Search
  • Google Search and Google image search
  • Google Search Partner websites (if your campaign to includes search partners)

Your Shopping ads and free listings can appear at the same time as text ads.  This is because Google wants to give users access to the full range of products that match their search.

Linking Merchant Centre and Google Ads

To run Google shopping campaigns using the data from your Merchant Centre account, you will first need to link the two accounts. When you approve a link between your Google Ads and Merchant Center accounts, you will allow your product data to flow from Merchant Center to Google Ads for use in advertising campaigns.

Depending on which product data you submit, you can create Shopping campaigns to advertise your products or use dynamic remarketing to drive your Display campaigns.

Types of Shopping campaign

There are two types of shopping campaigns:

  • Standard Shopping. ‘Traditional’ shopping campaigns where the user has over negative keyword, bids and bid adjustments and
  • Peformance Max. Fully automated shopping campaigns based on ROAS bidding

Performance Max is Google’s automated Shopping ads solution.  It replaced the Smart Shopping campaigns.  It uses machine learning to manage the campaigns, making it an almost ‘set and forget’ advertising solution. This campaign sub-type combines Standard Shopping and Google’s other campaign formats (including display remarketing campaigns and search ads) to simplify campaign creation and to promote your products across the web to a range of potential customers.

The following table summarises the difference between the two types of Shopping campaigns:

Performance MaxGoogle Standard Shopping
Quick and highly automatedFull control over your campaigns
Easy to set upComplex manual process
Time savingTime consuming
Limited Location targetingFull location targeting
Requires historical dataNo historical data required – can be started immediately
Negative keywords not availableNegative keywords available
No custom schedulingScheduling available
Cannot decide network placementCan decide network placement

Shopping Campaign Settings

When creating a shopping campaign, several settings must be configured. The options are given below. Standard shopping campaigns give users much more scope for optimisation but are more time consuming to set up and manage.

Campaign name. (Standard and Smart)

Enter a name for the campaign. We recommend choosing a name which identifies the targeting for the campaign for example:

  • Target country
  • Target brand
  • Campaign type

e.g. UK – Smart – Apple

You can change the name of the campaign after it has been launched.

Merchant (Standard and Smart)

Select the Merchant Center account that contains the products to be advertised. You can not change the merchant after you have created the campaign.

Country of sale  (Standard and Smart)

Select the country to where your products will be sold and delivered. Ads will only be shown to users from the country you specify. To advertise, you will need to ensure that product data in the selected Merchant Centre account is available for the country you choose. If no product data is available, there will not be any products to advertise in the campaign. You cannot change the country of sale after you have created the campaign.

Inventory filter

This setting is used to limit the number of products used in a campaign. Only products that match all the criteria you select will be added to your campaign. You can amend this setting after campaign creation. For example you might wish to restrict a campaign to advertising a single brand


Select the bidding type to use in your campaign. Options are:

  • Manual CPC. The advertiser sets the maximum they are happy to spend to get a click.
  • Enhanced CPC (ECPC). ECPC aims to drive more conversions from manual bidding. It automatically adjusts your manual bids for clicks that it judges are more or less likely to result in a conversion.
  • Maximise Clicks. Google will maximise the number of clicks for the given budget
  • Target ROAS. This is an automated bidding strategy where Google will adjust bids automatically to try and reach a set Return on Advertising Spend target

Bidding strategy can be amended after the campaign has been created.  Note for Smart campaigns, the only option available is Target ROAS.

For more details on bidding strategies, see the bidding section of the course.

Daily budget

Select how much you are willing to spend on this campaign. Whilst you may go over your daily budget, over the month, you will not pay more than the number of days in the month x daily budget.

Campaign priority (Standard and Smart)

Campaign priority determines which campaign will be used when products are in multiple campaigns.

Networks (Standard only)

By default, shopping ads will appear in:

  • Google Search Network
  • Google search partners

To limit where your ads appear, untick the box for any networks you want to exclude.

Devices (Standard only)

By default, ads can appear on all devices including computers and mobile. You can change this setting after campaign creation.

Locations (Standard and Smart)

If you wish you can restrict your ads so that they only show in specific locations. This can be changed after the campaign has been created.

Local inventory ads (Standard and Smart)

Local inventory ads show inventory available in local stores. 

To enable local inventory ads you need to submit local product availability data in Merchant Centre. Then, tick the “Enable ads for products sold in local shops” box.



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