Last updated: February 18th 2021
Google realised how time consuming and technical shopping campaigns are to setup and optimise. They wanted a way to help advertisers showcase their inventory on autopilot, by utilising their Ai technology.
What are Standard Shopping Campaigns?
Standard shopping campaigns serve your product catalogue (from your Google merchant centre account) on the homepage of Google and the Google shopping results tab. Standard shopping campaigns give you full control over your product listing, such as changing bids, removing negative words, adjusting device bids, ad scheduling and much more.
The data available in standard shopping campaigns allows you to see a whole host of information. This information allows you to regularly optimise the campaign, ultimately improving your return on investment (ROI).
What are smart Google shopping campaigns?
Smart shopping campaigns are almost 100% automated, by making use of Google Ai technology. This means you have only a limited amount of input into what can be altered in the campaign.
Released by Google ads in late 2018, the idea behind this machine learning Ai campaign type is to let Google automatically decide on which devices, schedules, networks, geographic areas, days, hours, search queries and audiences will convert best for your business based on your ROAS goals.
These campaigns serve up the most relevant combinations of your visual and contextual inventory to web visitors across Google homepage, Google shopping tab, Google display network, YouTube and Gmail users.
With smart campaigns all you need to do is decide which products to advertise, set a ROAS goal, create a dynamic ad creative, set your daily budget and you are good to go.
Google Smart Shopping Campaign Requirements
Before you can implement a smart shopping campaign you need to ensure the following:
Conversion Tracking (with revenue) – You must have conversion tracking with transaction specific values (revenue) in order to use smart shopping. This is because you must enter a desired ROAS percentage before you can start advertising with this campaign type.
Conversion Requirements – You need to have at least 20 conversions over a 45-day period from your existing standard shopping campaigns in order to setup a smart campaign.
Global Site Tag – The global site tag (either google ads or google analytics tag) must be installed site-wide on your website and have an audience of at least 100 users in the past 30 days.
Approved and linked Google Merchant centre – You must have a google merchant centre that’s been approved along with your product feed. This needs to be linked to your Google ads account to your Google ads account.
The Disadvantages of Smart Shopping Campaigns
- Search Queries – You can’t review search queries or add negative keywords. Smart shopping doesn’t give you access to the search queries that are driving clicks, and therefore sales. This means you could be wasting a lot of money on unrelated searches.
- No device/ad schedule adjustments – Only want to run your shopping ads on desktop devices and at certain days of the week? Sorry! you can’t with smart campaigns. Google has full control and doesn’t allow you to change these settings.
- Network Segmentation Analysis – Both shopping and display remarketing are lumped into smart shopping campaigns, with no way of segmenting, viewing, or controlling performance. This makes it impossible to understand which network is driving a positive ROI. For all you know, it could be Gmail display adverts that are a contributing factor to your positive ROAS.
- No Audience Targeting – you cannot add specific audience lists into your smart shopping campaigns, this is decided automatically by Google.
- Diluted CPC – It can appear that smart shopping campaigns have a lower CPC in comparison to your standard campaigns. However, you need to understand that a large portion of traffic might be coming from YouTube, display and Gmail, which historically are lower CPC’s, thus making it appear as if your overall CPC is cheaper. If your standard shopping campaign was £1.00 a click and smart is 30p a click you have to ask yourself “how much of this traffic is from display networks”. Unfortunately, there is no way of knowing.
- Brand Terms Could be inflating performance – Branded terms are likely appearing from your smart shopping campaigns. Branded terms naturally convert higher than non-branded, giving you a false sense of performance.
Why did Google create smart shopping campaigns?
My theory is that Google are likely seeing a decline in Google shopping traffic and therefore a decline in their overall revenue. This is likely due to the dominance of other e-Commerce competitors like Amazon, who own nearly a 50% market share of all e-commerce traffic in the United States.
By making smart campaigns easier to implement and manage it means more advertisers will use this campaign type. The more companies that use smart shopping, the more Google makes, simple!
Google have also seen declines in their display advertising, so by using smart shopping, Google has once again expanded their network reach.
Client Results – After 7 Days
According to Google, it’s best to leave smart campaigns running for at least 30 days so that you can evaluate performance. Whilst this makes sense, I wanted to see how it would perform in around 7 days with a high traffic product from one of my clients.
I tested on a small scale, using only a single product SKU that I advertised in a standard shopping campaign. I did this for one single product just in case the smart campaign failed miserably. I didn’t want the entire inventory to be affected.
However, to my surprise the smart shopping version is, so far, working much better with a lower cost and higher return on investment (ROI). But it’s important to investigate further and not take everything at face value. So, let’s dive into this early data shall we:
Standard Google Shopping Campaign Performance – 7 days data
- Cost Per Click – The standard Google shopping campaign has a higher cost per click – at £1.05. This is because this individual product within the campaign is only being served in Google shopping results and not on the display network, Gmail and YouTube, which typically have a lower cost per click.
- Google Share of Impressions – The impression share is high, at over 90%, meaning our product is being served in Google.co.uk 90% of the time, which is great for the client as it’s a high-volume, high profit margin product.
- Conversion Value – The revenue generated was £1,160 from 22 orders, making an average order value of £53.
ROI – The ROI of this campaign over the last 7 days is 468%, making it a profitable product for my client.
Smart Google Shopping Campaign Performance – 7 days data
- Cost Per Click – The smart shopping campaign has a much lower cost per click – at only 26p. However, because this combines Google search, display, YouTube and Gmail networks this dilutes the average cost per click, making it appear cheaper overall, when it might not be. It could be that we are paying over £1 per click for Google shopping ads, but the display, YouTube & Gmail network is only costing 5p per click, which, when averaged out makes our overall cost per click seem low.
- Google Share of Impressions – The impression share is low, at 25%. This makes sense because our shopping ads are being served on Google shopping and the display network. Because the display network is so vast a low impression share is to be expected.
- Conversion Value – The revenue generated is £695 from 11 orders, making an average order value £63. A whole £10 more per order compared to the standard campaign, which is great.
ROI – The ROI for smart shopping is therefore 2,601%. Making the campaign almost 5.5x more profitable than the standard shopping campaign
Wow! That’s such a great ROAS, why wouldn’t you just use Smart Campaigns all the time?
Based on the above analysis it should be obvious to you that smart campaigns are clearly the winner… right? Well, not exactly!
I needed to dig deeper into sales performance and find out which products were sold from both shopping campaigns and I did this by using the Google analytics ecommerce report along with some filtering.
And as it turns out there was a high value order generated from the smart shopping campaign that is skewing the comparison. A big order, with a total revenue of nearly £375 has bumped the ROI on the smart campaign, possibly giving us a false positive, because this product rarely sells, so this could just be pure coincidence that it happened to sell in the smart campaign.
Image below shows order values from smart shopping.
Time – Time is a very important factor to see how smart campaigns are going to perform against your standard campaigns. Whilst my initial 7-day test is looking positive, more time is clearly needed to see if it will outperform standard campaigns.
Combine – I feel that smart campaigns are useful for selling lower priority items where management time constraints are an issue. If, for example, you have an inventory of thousands of items, it may make sense to advertise the least important products using a smart campaign and keeping your most important products that are generating revenue in a standard shopping campaign so you can analyse performance more closely.
DIY and Keep Control – You can use a mixture of shopping and display campaigns to replicate (to an extent) what Google dos with smart shopping campaigns. This strategy means you can advertise on Gmail, YouTube and display networks, but with one caveat – you won’t be able to create dynamic smart shopping ads, which are made up of a vast array of ad sizes. Dynamic ads make them more compatible on the display network, driving a high volume of traffic, that’s (as of this writing) only available with smart campaigns.
ROI isn’t everything – My final and most important takeaway from this article is ROI isn’t everything. Many products in your shopping inventory have different price points and margins. Therefore, ROI needs to be segmented and decided upon based on your desired goals.
Because smart campaign ROAS can only be set at campaign level it means you still need to use the same process as you would for standard shopping campaigns. Segmenting your products at campaign level and not bundling your entire catalogue into one campaign and setting a single ROAS goal. That could be disastrous for your bottom line!