Posted on : April 14, 2021
Google’s Smart Shopping campaigns are the default for many e-commerce advertisers, but this campaign type is far from perfect — and the way you implement it is certainly not one-size-fits-all. As with most of Google’s ongoing efforts, Smart Shopping is a product of their commitment to improved AI capabilities.
From natural language understanding and BERT for SEO to automated bidding strategies and campaign types for PPC, there’s an overarching trend toward creating a smarter platform.
And that’s why the ever-popular default campaign type for Google shopping ads came to be known as Smart Shopping. Though, it’s not to be confused with Smart search campaigns. Where Smart Search campaigns are virtually useless to most advertisers, Smart Shopping has the potential to really boost visibility and profitability — so long as it’s correctly set up.
How & Why Smart Shopping Works
You might be wondering: How did Smart Shopping get to be so popular? When did we ditch manual efforts altogether? Well, for most advertisers starting out, it’s just the simplest option. It integrates easily with e-commerce platforms like Shopify, creating a single Smart Shopping campaign by default.
Google has also been strongly pushing the usage of these Smart Shopping campaigns over their predecessor, the Standard Shopping campaigns — which we refer to as ‘Dumb Shopping’ by contrast.
DISCLAIMER: It’s important to note that we’re not bashing Smart Shopping campaigns. In fact, here at Conversion Giant we use them all the time. However, in many circumstances, Smart Shopping campaigns can cause major issues, disruptions, and limitations in advertisers’ campaign performance and revenue.
Knowing how these campaigns work will help you determine the best way to optimize them for your business, so here’s a quick rundown on the setup process:
- Upload a feed. Often, advertisers will upload their entire product catalog into Google Merchant Center as one Smart Shopping campaign.
- Set a bid strategy. Traditionally, you’ll either set a Target CPA (tCPA), Target ROAS (tROAS), goal to Maximize Conversions, or goal to Maximize Conversion Value. However, these bidding strategies are changing soon.
- Set it free! The campaign will take on a life of its own. There will be no queries to monitor, no product level bids to set, no way to see what you paid for particular product clicks.
And that’s the rub. Sure, it’s nice to have Google do the work for you, but relinquishing this kind of control comes with caveats. Without these detailed insights, it’s hard to give Google guidance on where to put its energy — and your budget.
On top of that, it can take up to two weeks for these campaigns to learn how to self-optimize. During this time, Google is serving various products at different times and deciding which ones are going to generate the best performance according to your bid strategy goals.
The idea is that, over time, the Smart Shopping campaign will be able to learn and sell your product more effectively than the ‘dumb’ campaigns can. In many cases, this statement is true, but there are exceptions.
How & Why Smart Shopping SUCKS
We’ve looked at the overarching reason Smart Shopping campaigns are preferred by many (including us), but let’s analyze the drawbacks and some specific scenarios in which they can occur.
- The learning curve. Remember how we said Smart Shopping campaigns learn to self-optimize? Well, they don’t learn on a per product basis. Rather, it makes decisions based on collective data, which may not always be accurate.
- It’s finicky to product changes. If a single change happens to a product in the feed, it can have some effect on the product’s ability to be served — and potentially on the entire campaign, if that product was significant to the current overall campaign performance. For instance, a change to a product’s price or availability could cause a disruption in the campaign’s ability to serve at optimal levels for all products. If a popular product stops converting because of a price or availability change, Google has to adjust the entire campaign to deal with the void in conversions from that one product.
- It’s finicky to bidding strategy changes. If the campaign undergoes a bid strategy change, the entire campaign could be disrupted while it adjusts to the new goals.
- Little data means longer learning curves. If campaigns don’t have enough data to work with, they can take forever to optimize. For example, campaigns with small budgets but large product selections could suffer from insufficient data and take longer to go through the learning phase. Even though, the campaign status won’t say ‘Learning’ any longer, it might still struggle to get a handle on optimizing itself to the fullest.
- Limited reporting. With little ability to manage these campaigns, the need to have reporting and product segmentation is even more crucial. This is usually limited by the quality of the feed. If the key fields (product type, brand, custom label, Google product category, and description) are void of useful data, creating meaningful product groups will be difficult to do. This means there is less indication as to what types of products are performing and need more or less attention in the campaigns.
- Bidding strategies don’t always work the way you expect. This is where experience comes into play. For example, if you have a new campaign and you need to get impressions, you might set a 100% tROAS just to get impressions and adjust it to something more realistic as data rolls in and learning takes place. Often, you’ll just set the targets outside your actual goal to keep the campaign from stalling. Changes to bid strategies will usually reset the learning phase so it’s best not to adjust these too often.
Optimizing Your Campaigns
Now that you know the pros and cons of Smart Shopping campaigns, it’s time to explore some ways we optimize this campaign type in order to offset some of the aforementioned drawbacks.
- Segmentation. We will typically try to break Smart Shopping campaigns out into additional campaign segments in order to control budgets and bidding goals across the segments, provided the product count and campaign budget supports this change. These segments include:
- Individual product performance, which breaks down into three groups: top performers, products you want to increase visibility for, and products that don’t perform well and you want to suppress.
- Product price points and whether they’re competitive for the industry, which allows you to focus ad spend on products that are competitive.
- Relative margin of each product/brand/product type in order to set varying tROAS goals and budget for each group.
- Campaign consolidation. We would not want to set up a campaign filled with lots of highly-searched products and give it a $20/day budget because it would take forever for the products to learn. Consolidating campaigns to share a larger budget will typically allocate the money more optimally, and thus Google will get more data.
- Feed optimization. If we cannot get enough quality rich data in the product feed to make these kinds of changes, we would try to optimize the feed in some way to gain that granularity. For instance, if all the products in a store fall under the same product type (i.e. “outdoor equipment”), we might try to either edit the product types or add additional values to the custom labels so we can group products more specifically.
- Change campaign type for different segments. If there were a larger set of products that update constantly in the feed (i.e. per availability status, pricing, etc.), we might flag those and have them set up in a Standard Shopping campaign. This campaign might be bid up to compete with the Smart campaign, but if for some reason Google did not want to serve the product in the Smart campaign, the Standard one should pick it up right away.
Let’s have a look at a few client case studies, and how our PPC team made Smart Shopping work for their specific needs.
- PoolDawg needed to increase revenue & ROAS from shopping campaigns.
- They had been running Standard Shopping campaigns with manual bidding in the past.
- We transitioned them to Smart Shopping campaigns.
- Immediately, both revenue & ROAS more than doubled.
- Year-over-year, the increase in revenue was 453% and ROAS was 167%.
- Military’s Best was skeptical of running a Smart Shopping campaign for their category of Lapel Pins.
- The cost-per-conversion (CPC) was nearly $5 and some of the individual pins were priced even lower than that.
- However, the bidding strategy of the campaign was set to Maximize Conversion Value with tROAS of 500%
- So, over time, the campaign has learned to only show ads to audiences it believes will make large purchases.
- Even though the average CPC is around $5, a conversion can be an order of 10 or more pins — or even an order of more expensive, unrelated items.
- This has allowed the algorithm to accrue an ROAS of over 500%.
The Bottom Line
What it comes down to is this: Smart Shopping campaigns can be extremely valuable because they are much more capable of analyzing all your products and serving the right ones at the right times to maximize your goals. However, simply setting up a Smart Shopping campaign and letting it run is usually not the most profitable way to use them.
Most of the time, for limited product count campaigns where there is little fluctuation in the product data and enough budget to support the campaign learning, Smart Shopping campaigns will outperform ‘dumb’ campaign significantly.
But, when we don’t have the perfect set of circumstances — which is more often the case — some degree of optimization intervention is required to maximize returns.
The campaign won’t run optimally if there are constant changes to product data or bidding strategies. In those instances, you need a solid plan to get those products in front of customers on a frequent and consistent basis.
Most importantly, you need to exercise patience with Smart Shopping campaigns, because they don’t materialize as fast as we’d like them to. Yet, with proper optimization and a solid mix of supplemental shopping campaigns and feed optimization, Smart Shopping campaigns can help you make a healthy difference in your profit.
Ellie is a PR & SEO Outreach Coordinator for Conversion Giant with three years of experience in digital marketing, social media management, and client relations. A former journalist, she is committed to delivering content with integrity and transparency.