Google Shopping Ads Guide [and Budget Calculator]

What are Google Shopping Ads?

They are the automatic product listings ads you see come up at the VERY TOP of search results almost anytime you do a “shopping-related” search in Google.

And they don't just show up in standard search results.

They also show up in the “Shopping” tab.

… And on YouTube.

… And on mobile.

… And in map results.

… And in response to voice searches.

Notice a trend here? Google loves Shopping Ads.

And if you learn how to leverage Shopping Ads to attract more customers, you're going to love them too.

In this guide and the (video below), we're going to take an in-depth look at who should take advantage of the opportunity Shopping Ads provides, as well as how to get started using Shopping Ads.

Here's a quick overview of what we are going to cover in this guide:

Who should use Google Shopping Ads
Shopping Ads vs. Text Ads (old school AdWords)
How Shopping Ads can simplify promoting your products on Google
How much you should budget for Shopping Ads
What you need to do to get started with Shopping Ads

In addition to following along with this post and video, you can also download our new Google Ads Ecommerce Budget calculator. This handy calculator will help you quickly see if you can use Shopping Ads to generate profitable sales.

Who should use Google Shopping Ads

So how do you know if Google Shopping Ads represents a good opportunity for growing your business?

Well, do you love the smell of commerce in the morning?

If the answer is yes, then 1) You're a fan of the movie Mallrats, AND 2) Shopping Ads might be right for you.

I love the smell of commerce in the morning

All kidding aside, here are the kinds of businesses that typically benefit the most from using Shopping Ads:

1) You're an eCommerce merchant selling physical goods

If you're an eCommerce merchant selling physical products, more than likely Shopping Ads can help you attract more customers and additional sales.

That said, there's one super-easy way to find out if you can benefit from using Shopping Ads.

Search your product names/categories on Google. If you see competing products in the Shopping results (and you probably will), then there's an opportunity for you to capture some high-quality search traffic and prime real estate using Shopping Ads.

Shopping Ads Examples

2) You're a PPC Manager

How about PPC managers and Search Advertisers? Should you offer Shopping Ads management as a service? The answer is YES. Shopping Ads are proven to produce higher click-through-rates and a stronger ROI than Text Ads (more on this to come). By offering Shopping Ads management to your clients, you can expand your service offerings while delivering impactful results.

3) You're a Market-Maker

The other category of merchants that should consider Shopping Ads are businesses that are trying to break into an established market with a new or innovative product. Shopping Ads allow Market-Makers the chance to display their product right alongside big-time retailers. This opportunity makes it possible for new products to break into an existing market and win customers away from the retail behemoths.

For example, I purchased a Peak Design photography backpack on Kickstarter about a year ago. Yet, even though Peak Design is a relatively new company, they are competing with established brands like B&H and Yeti on high-buying intent search queries. Peak is using Shopping Ads to gain a competitive advantage that isn't always available in other marketplaces.

Shopping Ads Examples

4) Your eCommerce platform creates an automatic product feed

In this day and age, pretty much every e-commerce platform creates an automated product feed for you. You can send that product feed into Google in just a few clicks, and start listing your products in Shopping Ads.

Product Feed App for Shopify

5) You want to level the playing field without playing the Google “auction game”

It's no secret I love Google Ads. And I love playing the Google Ads game. But competing in the search traffic auction with text ads isn't right for every product or merchant. If you're having trouble generating a positive ROI using Text Ads to sell your products, Shopping Ads provide a simpler alternative.

6) You see your competition in Shopping Ads results

We briefly touched on this benefit already. But let me blunt about it. If you see your competition in Shopping Ads results, it means you have an opportunity to compete for the same PPC real estate they are currently occupying. (For example, if you sell “creepy ants,” and you're not on Shopping Ads, your customers are literally crawling to your competitors' offers.)

Shopping Ads examples

What's the difference between Shopping Ads and Text Ads (old school AdWords)

To truly understand what makes Shopping Ads unique, let's look at how they differ from standard Text Ads.

Characters Vs. Pictures

The primary difference between these two formats is how they are displayed.

Text Ads are simply a block of text with a character limit (and some handy extensions), whereas Shopping Ads include images, prices, and even ratings.

The Shopping Ads format is not only more interactive for the searcher, but it also consumes more real estate in Google's results.

Keyword-driven Vs. Product-driven

As I mentioned earlier, text Ads are keyword-driven. Now, if you're compulsive about keyword management, then text Ads are a great way to target high “purchase-intent” queries.

Shopping Ads, on the other hand, are product-driven. When you advertise using shopping Ads, you bid on your products, NOT keywords. And, Google generally only displays shopping ads on searches that their algorithm identifies as having “commercial-intent.”

Open auction Vs. Product Restricted

One of the big downsides to Text Ads is you can wind up in a race to the bottom. High-value keywords attract aggressive bidding. And an all-out bidding war can erode the profit-margins of even the most skilled advertisers.

The Shopping Ads auction is more restricted. Only the products Google associates with a search have a chance to display. Therefore, your expenses tend to be more aligned with the results you generate.

Return on ad spend

The results speak for themselves. On average, Shopping Ads have a 26% higher conversion rate and a 23% lower cost per click.

Shopping Ads ROAS

This data doesn't necessarily mean Shopping Ads are always the answer. But what it does mean is that if you're not seeing an opportunity to generate a positive ROAS using text Ads…

Shopping Ads might be a better solution for promoting your products in search results.

How much should you spend on Google Shopping Ads?

So how much will it cost you to advertise your products using Google Shopping? And how much will you have to spend to generate a positive ROI?

To help you answer those questions, I built a handy little tool I'm calling the Google Ads eCommerce budget Calculator.

How much should you spend on Google Shopping Ads

You can download this calculator below, as part of Free Google Shopping Ads toolkit.

To use the calculator, all you need to do is punch your business numbers and projections into the gold cells. Then, the calculator will show you how much you expect to earn from your investment in Shopping Ads. (To see a detailed break-down of how to use the calculator, make sure to watch the video at the top of this post.)

The calculator also has a second tab that allows you to project three different advertising scenarios. Using this tab, you can evaluate how increasing your ad spend will affect your profitability.

Google Ads Ecommerce calculator

By running your numbers through this calculator, you can project how Shopping ads are likely to perform for your business before you invest a single dollar in advertising.

How Shopping Ads Can help you simplify advertising on Google

The best way to understand how Shopping Ads can help simplify advertising is to look at what you Do NOT have to do to use this advertising format.

The Shopping Ads format is pretty straightforward… which means you do NOT have to test multiple variations of an ad to find a top performer. To get the best result from Shopping Ads, you still want to learn the ins and out of optimizing your product feed. But you won't have to worry about endless variations of copy, landing pages, and keyword match types.

Shopping Ads are NOT based on the same saturated auction as Text Ads… which means, by and large, your costs will be lower with Shopping Ads than with Text Ads.

Shopping Ads do NOT show up for every search. In my opinion, they are designed to only display for “highly commercial” searches as determined by Google… which means you do NOT have to spend as much time on search query optimization. Google's smart enough to figure out which searches are triggering purchases, and if your products are eligible to display on those queries, Google will show your Ads.

Shopping Ads are NOT nearly as complicated as Text Ads. There's a limited amount of variables you can test with Shopping Ads… which means if you simply optimize the core components, you can generate great results quickly.

How to get started with Shopping Ads

Getting started with Shopping Ads actually begins outside the Google Ads platform. Let's walk through the steps you need to take to set up your Shopping campaigns.

To use Shopping Ads, you first need to set up a Google Merchant Center account.

Google Merchant Center

Next, you need a “Product feed” that sends your product information into Google Merchant Center. (The image below is a Product Feed created using the eCommerce platform WooCommerce).

Product Feed

Most eCommerce platforms have a built-in capability to submit a product feed from your store directly into Google Merchant Center. But, Google also provides you the options to upload your product feed manually.

Link your product feed to Google Merchant Center

After you've uploaded or linked your product feed to Merchant Center, you want to check your account to make sure your product information imported correctly.

Verify your product feed

If your feed import or connection was successful, you'll see your products listed in your Merchant Center account.

Product Feed in Google Merchant Center

To use your product feed for advertising, you need to link your Merchant Center account to your Google Ads account.

Link Merchant Center with Google Ads

You can initiate your request to link your accounts inside Merchant Center. Then, you'll accept that request inside your Google Ads account.Link Google Ads to Google Merchant Center

Finally, you can set up your Shopping ad campaigns inside the Google Ads platform.

Google Shopping Ads Campaign

That's it, five relatively simple steps to getting started with Shopping Ads.

Next up, you can start learning how to optimize your product listings and campaign settings so you can win more clicks and get the most out of your Ads spend.

A quick recap

We covered a lot of information in this guide. So let's briefly recap the highlights.

  • Ecommerce store owners need to (at least) keep tabs on how Shopping Ads affect their market and opportunities in their product categories
  • Shopping Ads are a great way to make sure your products show up on Google for commercial intent searches
  • Getting started is pretty easy… especially when you use the Data Driven resources we share with you

And last but not least, if you'd like to get access to our brand new Google Shopping Ads checklist, make sure you are a Data Driven subscriber. We'll be sending our checklist to all our subscribers next week.

Questions and comments

Still have questions about Shopping Ads? Leave a comment below, and we'll see if we can't get you some answers. Also, if you have experience with managing Shopping Ads, share your feedback and advice with our community in the comments. We all learn more together.

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