What are Google Smart Shopping Campaigns

Google Smart Shopping Campaigns – What They Are And How They Work

We live in a world where most things, from our phones to our homes, are becoming "smart," which, thanks to AI, is no longer a buzzword. The “smartness” has seeped into digital marketing as well, and the result is features like Google smart shopping campaign and smart shopping ads. Finding answers to questions like ‘what is Google smart shopping’ and ‘how you can leverage it for your digital marketing goals’ can help you get optimal Returns on Ad Spend (ROAS). 

For Shopify store owners (or other account holders), learning Google smart shopping campaigns and Shopify optimization can be of great value.

What Is Google Smart Shopping?


With Google shopping, you have two options: You can either create a free listing that will help you get your product out to the Google shopping tab or, you can run a Google shopping ads campaign. Google smart shopping and Google smart shopping ads are a bit different.

When you set up a typical shopping ads campaign, you have to optimize a bunch of things and fine-tune your campaign to get the best shot at having your shopping ads served to the right audience without overspending yourself. It's time-consuming, but it also gives you complete control over campaign optimization. 

But it's not ideal for many marketers and business owners, and they can choose to have Google's machine learning do the hard work for them, and that's where Google smart shopping campaigns come in.

So what is Google shopping? It’s a campaign management solution offered by Google that automates your Google shopping campaigns. You have the responsibility of submitting the original feed and keeping it updated (it doesn't matter if you do it manually, through a content API, or a scheduled fetches), and set your campaign goals (quite easy), and Google does the rest.

Machine learning -powered campaigns are quite effective (for reasons beyond near-perfect campaign optimization as well), and Google claims that their Google smart shopping campaigns drove 20% more conversion value at similar cost/ad spend. One reason for that might be that Google smart shopping ads are displayed on more Google surfaces (including shopping, YouTube, organic search, etc.), but that’s just one of the factors in favor of Google Shopping.

How Google Smart Shopping Works?

Google smart shopping


Before we understand Google smart shopping in contrast to regular shopping ads, let’s dive a bit deeper into how Google shopping ads work. The steps you’ll need to take before free Google shopping listings, Google shopping campaigns, or a Google smart shopping campaign are the same:

  1. Create a Google Merchant Account
  2. Create a Google Ads Account (if you want to set up either kind of shopping campaign: typical or smart)
  3. Upload your product feed

Google needs all the product data to formulate listings. How and where these listings are displayed is where a Google smart shopping campaign differs from the rest. The two things that are at the crux of Google smart shopping are Automated ad placement and automatic bidding. These two factors define how Google smart shopping works.

Automated Ad Placement

Google pulls all the product data you provide in the feed to create shopping ads optimized for the relevant target audience. So in smart campaigns, like in a regular shopping campaign, it’s important to give Google accurate and updated data to work with because discrepancies in the information you give to Google and the product landing page will direct buyers to, can cause them to not go through with the purchase. 

Once it creates the shopping ads, they are served to the people most likely to click on them across multiple Google surfaces, including Google Shopping, Gmail, YouTube, etc. This placement is not in your control, and Google determines when and where your ad will be displayed. It might determine that your budget is not enough to display your ad during peak shopping time/hours and that you might get more clicks and conversions on a Saturday instead of a Sunday.

This automated ad placement takes away control from you and puts it with the machine learning algorithms driving these smart shopping campaigns. But that algorithm learns and improves every day, and the automated ad placement might lead to more conversions than your manual campaign settings can trigger.

It’s important to note that since Google shopping ads are not displayed to users or matched with your target audience based on keywords, you can’t use the same strategies to influence automated placement as you do for Google ads. You also can’t use negative keywords/terms to prevent irrelevant queries from triggering your ad to display. All you can do to influence the best placement and ensure that your ad is served to the right audience is provide a complete and optimized data feed.

Automated Bidding/Smart Bidding

Automatic bidding or smart bidding, as the name suggests, means that Google’s machine learning algorithms do the bidding for you. Based on the budget, ROAS, and conversion goals you set, Google determines the optimal bidding strategy for you. 

It’s important to note that Google offers automated bidding for standard shopping campaigns as well, in three flavors: 

Maximize Clicks: Based on your budget, Google will serve ads to get maximum clicks.

Enhanced cost-per-click (ECPC): It increases your chances of conversion by bidding higher or lower based on the likelihood of a click turning into a conversion. If it’s more likely to, Google will push your manual bid a bit higher to get that conversion. If the chances of a click turning into a conversion are quite low, Google will bid low to prevent you from wasting ad spend on it.

Target return on ad spend (ROAS): If you set up a ROAS, choosing this bidding strategy will maximize your conversion rate while sticking to your ideal ROAS. 

None of the above three strategies are available for a smart shopping campaign. For smart shopping, the automatic bidding strategy that Google uses is called Maximize Conversion Value, and it does exactly what it says. You can add additional campaign goals that might influence the bidding behavior of the AI (like if you get more visitors to your physical store), but short of that, Google’s smart bidding will try to maximize conversions based on your budget.

Word of caution, though Google’s machine learning algorithms are beyond impressive and automatic bidding has several inherent pros (logic-based bidding, taking more variables into account that humans never can, etc.), it still can’t work magic. You can’t set up a bare minimum product feed and blame the smart bidding feature of Google smart shopping for failing your conversion goals.

To maximize conversion value while staying within your daily budget, Google makes use of a wide array of auction-time signals, also called contextual signals, which include:

  • The physical location of the user
  • The device used to execute the search
  • The browser and operating system
  • Whether the person is on the remarketing list or not
  • Product attributes
  • Seasonality

A person using a mobile device during peak hours might be served ads based on proximity. The same search executed late at night on a desktop might serve different results. The bidding for both would be radically different, and Google's algorithms try to offer you the best shot of conversion based on your budget.

Remarketing is a strong suit of Google smart shopping campaigns, and it automatically optimizes for dynamic remarketing.

How To Set Up A Google Smart Shopping Campaign

If you want to take advantage of the benefits of Google smart shopping ads, you need to set up a smart shopping campaign. 

Thankfully, creating a Google smart shopping campaign is relatively easy, especially if you’ve already uploaded and optimized your product feed. 

The steps below “assume” that you’ve already linked your Google Merchant Account with your Google Shopping Ads. You can do that right after you complete the other four steps of setting up your shopping ads listing on your Google Merchant Account. 

  1. Go to your Google Ads account.
  2. Select campaigns and then add a new campaign.
  3. For goals, select “Sales” or the option to create a campaign without a goal.
  4. For campaign type, selectselection “shopping." 
  5. Select the merchant account. It should already be linked but just in case, make sure it’s the right one.
  6. Click on the smart shopping campaign. Selecting something else would kind of defeat the purpose of this whole guide.
  7. Type in a campaign name that’s relevant and distinguishable. That’s especially necessary if you are planning on setting up multiple campaigns.
  8. Set your daily budget. It’s mandatory and if you’ve already executed a manual campaign, enter the same amount. This will help you benchmark performance differences.
  9. In bidding, you may enter a target ROAS if you have one in mind. If you are willing to spend $1 on marketing for every $3 in sales, you will set up the ROAS to 300%. Note that in a fresh campaign, the algorithm will not be able to match your target ROAS because it won’t have enough data. Once it collects enough conversion data, it might start to steer the campaign in the right target ROAS direction.
  10. Customer goals are set for maximum conversions by default, but if you want to add more store visits or to acquire new customers, check the relevant box.
  11. Product groups are important, especially if you have several products in your inventory. You might not want to treat your winning products the same as items that don’t perform very well, so you should divide them into groups. For each smart campaign, choose the product groups based on how much you are willing to spend on them every day.
  12. For dynamic ads, you will need to upload additional assets, including logo, text, images, videos, etc. 

And you are good to go. The simplicity, the time and energy it takes to set up and execute a Google smart shopping campaign, and the returns it promises to make it an ideal choice for several e-commerce businesses and marketers.

If you have a Shopify store set up, the Google smart shopping campaign Shopify will be a bit different for you but relatively easier. Once you've synced up to Google shopping with Shopify, all you have to do is go to automation and set up a campaign. Follow the easy steps shared here.

Google Smart Shopping vs. Standard Shopping Ads

Standard shopping

Now that you understand what Google smart shopping is, it’s a good idea to compare it to standard shopping campaigns and Google shopping ads, so you know which one you should pursue (if not both). 

Ease of Set-Up: A Google smart shopping campaign is deceptively easy to set up. You will virtually be done after a few clicks, and then Google's algorithm will take over. A standard shopping campaign, however, takes a lot of time to set up, and that's if you disregard the time consumed by the learning curve. 

Time-Saving: Google smart shopping saves you time on two fronts: Initial setup and regular campaign maintenance. With Google smart shopping, everything is on autopilot, and you don't have to do anything beyond changing the daily campaign budget (and ROAS) once the campaign has enough data, which doesn’t take more than a few minutes. For shopping ads, bidding alone can be a time-consuming process. You have to experiment with different bidding strategies to land on the perfect one that works for you. Not to mention setting up campaign priorities, filtering inventory, choosing the right location and devices, etc. For relatively simpler campaigns where you don’t need to have granular control over your marketing campaign, a Google smart shopping campaign will win hands down compared to a standard campaign.

Control: When you choose to let Google's machine learning algorithm lead your shopping campaign, you are ultimately surrendering control to it. You will have no control over when and how your ads will be placed, and beyond increasing your budget for more visibility, you cannot influence the outcome in almost any way. But with a standard Google shopping campaign, you have complete control over all the variables that determine your ads' visibility. If you want, you can outbid your competitors on a Saturday night because that's when your product sells the best, and lowball bidding on the remaining days of the week. The ability to control every element in a shopping campaign makes standard shopping campaigns ideal for seasoned professionals.

Network-Oriented Visibility: When you are running a standard shopping campaign, your ads will be displayed on the search network only. Granted that it’s the premium real estate you want to leverage, but Google smart shopping offers something better. With a smart campaign, your ads will be displayed on multiple networks, including YouTube and Gmail, and it’s better from more than just a remarketing point of view. If Google serves your ad to a user (with a high potential of converting) on multiple networks (without compromising relevancy), it primes them up for clicking your product before others when they search for it with intent. The wide reach makes it highly attractive.

Remarketing: Google smart shopping campaigns are ideal for remarketing, and it's a default feature of these campaigns. For a standard campaign, you can choose whether to pursue remarketing or not. This can be both a good and a bad thing. For one-off items like a vehicle, remarketing might not be a very profitable avenue to pursue, and a smart shopping campaign might waste your ad spend on it anyway.

Negative Keywords: Negative keywords are a key to making the most of your ad budget, and you can only add negative keywords in a standard campaign and not a smart shopping campaign. Since Google shopping ads are served to the target audience based less on keywords and more on the listing as a whole, you can’t control ad serving through keywords. But by adding negative keywords, you can ensure that your ad isn’t displayed to the wrong audience, i.e., who searched for something similar to yours albeit with a different intent. You can't add negative keywords in a smart shopping campaign, and it's a major detriment for some e-marketers and businesses.

Location Targeting: With Google smart shopping, you have virtually no control over location targeting beyond setting up the country. That doesn’t mean Google will serve your ads to users in locations who might never buy your product (since its core aim is conversions), but you can’t control things like focusing more on a specific region or excludingexclude certain cities (where your competition is the strongest). That’s more a problem with businesses that have a relatively limited reach and less of a concern for businesses that ship all over the country.

When Google Smart Shopping Is For You

If you are selling products Google has enough data on (common products sold by several other sellers), almost all your products fall in the same price/priority categories, you want to save time and make your Google shopping as hassle-free to set up and run as possible, then smart campaigns might be for you. 

It’s ideal for most beginners with a relatively simple/small inventory (or those who’ve already segmented their products by various categories and want to execute separate campaigns for each). For seasoned sellers/marketers, if you have a lot of conversion data to work with and you are big on remarketing (with extensive remarketing lists), smart shopping might offer optimal results for you.

Google smart shopping is also a good option to choose if you can’t make your campaign work on your own. The smart shopping algorithm might target users you are just not seeing with your campaign management approach and offer more conversions than what you could have achieved with manual control.

When Google Smart Shopping Isn’t For You

There are instances when setting up a standard Google shopping campaign might be more in your favor. They include:

  • When you have to zero in on a specific location (for regional businesses) within a country
  • There is a lot of overlap between your product and a different product, and the only way to ensure that your ads will be served to the audience with the right intent is by using negative keywords
  • You need to collect search term data or marketing data (Google smart shopping isn’t very transparent)
  • You want to differentiate between the budget you allocate to remarketing vs. new conversions
  • You want more control over where and how your ads are served to your target audience

Google Smart Shopping Best Practices

Even if you have limited control over a smart shopping campaign, there are a few things you can do to maximize the potential of campaign success:

  1. Optimize your campaign structure by dividing your inventory into different product categories and lists. You can run different smart shopping campaigns for different product lists, each with its own budget and ROAS goals.
  2. Provide all the assets Google asks for to make your ads more attractive. That includes logos, color, headlines, images, videos, etc. The more information you give Google to work with, the better ads it will create for your brand image and conversions.
  3. It’s a good idea to experiment with your budgeting and ROAS. Spending more isn't always the answer, and it's not always wise to stick with a rigid budget.
  4. If you don't have enough data, it's a good idea not to set a target ROAS in the beginning because it might prevent the algorithm from learning more efficiently. Unrealistic target ROAS is even worseworst. 
  5. Follow all feed optimization best practices. Google smart shopping can’t work at full power with a bad product feed.


We hope this guide answers the two most important questions you might have, i.e., what is Google smart shopping and whether it’s for you or not. Google smart shopping is ideal for some businesses, and some situations and standard shopping campaigns might hit the target better for others, but there is no reason the two can't work together in harmony. In a lot of cases, you might benefit from having both types of campaigns working for you. One thing to remember is that Google's smart shopping algorithm is always evolving, and there might come a time where it outshines standard campaigns in 99% of cases. So it's a good idea to start leveraging its potential as soon as possible (and the power of smart bidding that sits at its core), so you can stay ahead of the curve.