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How Google Shopping Ads Work

What are Google Shopping Campaigns? How do you create Shopping Ads? Are they right for you? In this post, I’ll answer all those important questions!

Are you an Ecommerce owner, who’s thinking about hiring an advertising agency? Are you wondering where to run your adverts?

Well, you should consider Google Shopping Ads.

It’s a marketing channel that has delivered substantial result for retailers, with over 16% of all Ecommerce sales coming from these ads.

If you want to use the best marketing channels for your store, these ads should be on your shopping list — please excuse the pun!

In this post I cover:

  • What are Shopping ads?
  • The benefits of using Shopping ads
  • Where do they appear?
  • How the auction and bidding process works
  • Overview of setting up a Shopping campaign
  • Shopping ads rules — key dos and do-nots

What are Google Shopping Ads?

Individual Shopping ads look like this….

google shopping ad example with promotion
Google Shopping ads example

A Shopping ad contains:

  1. Photo of the product
  2. Product title/description
  3. Price
  4. Brand name or simplified branded domain name
  5. Promotional offer (this is optional). For example: free shipping, discount, etc.

Google Shopping ads VS Adwords text ads

A text only ad looks like this…

google adwords plain text ad example
Example of a text only Adwords ad.

Plus points of text only ads:

  • Searchers can click through to the different pages of your site. For example: About us, Swimwear collection, Dress collection, Ethical Values, Seasonal offers.
  • Differentiate your offer and brand through clever use of copy.
  • Can show reviews, ratings, clickable phone numbers, emotional benefits, and practical features of your product.
  • Precise bidding on individual keywords and Ads.

Negative points of text only ads:

  • Searchers can click through without seeing your products or a price — less qualified and more likely to waste your budget.
  • No product photo.
  • Your ad can run even if your product is out of stock.

So, which ad format is right for you?

I would recommend…

google shopping ads for ecommerce brands

I believe that this should be the No.1 choice of all online retailers — especially ones with a limited range of products.


Let me explain with a simple game of make believe…

Imagine someone searches for shoes on Google. They click on a text only shoe advert (remember; the advertiser has to pay for that click). They arrive on an Ecommerce site that has only one product (it’s extreme — but proves my point) for sale. These pink shoes…

Unfortunately, our shopper can’t stand the colour of these shoes. So, they go back to Google and purchase their shoes elsewhere.

That is wasted ad spend  — money spent on someone who was never going to be the brand’s customer.

You might not think it matters as the business only lost 50p on a wasted click. But, what if it happens 300 or a 1000 times in a day?

By better qualifying your shoppers with the price and photo of your product,  your business can save precious ad spend — and reach more of the people that will love your products!

That’s the beauty of Google Shopping Ads.

However, traditional text only ads still have their place.

Especially when people are researching broader for categories such as ‘men’s shoes’ or ‘Christmas gifts for women’ and your brand either targets a specific niche and/or offers a choice of products.

Text ads can also be used in Remarketing campaigns. (I’ll cover this in another article soon.)

I’ll finish this section by answering that all important question….

do google shopping ads work?

Are they worth your time and money?

Let’s look at some facts.

  • Google Shopping Ads lead to 16.1% of all Ecommerce purchases (Retail Dive).
  • Shopping ads take 52% of click share in search results (Search Engine Land)
  • For non-branded terms, Shopping ads get a whopping 75% of Click Share (Search Engine Land).

Those are pretty compelling statistics.

If your business is ignoring Shoppings Ads, you’re probably missing out on important sales and revenue!

benefits of Google Shopping Ads

The primary benefit of Shopping ads?

They save you money by better qualifying the people who click your ads — remember each click costs you money!

Here’s a complete list of Google Shopping Ads benefits:

  1. Better Qualified Shoppers: People see a picture and the price of your product before they click your advert — so better qualified leads visit your website. This means less wasted advertising budget, and more of the right people in your sales funnel.
  2. Higher click-through-rate (CTR) and more traffic: According to Google, many businesses achieve a improved CTR with Shopping ads compared to text only ads. A better CTR results in more people visiting your E-commerce store.
  3. They’re PPC: You only pay when someone clicks your advert.
  4. More screen retail estate: Where relevant, Shopping ads can be displayed alongside regular text ads (Adwords) — this give your brand a bigger presence on the SERP, thus increasing your reach with people interested in products like yours.
  5. Buyer Intent: The No.1 reason that Google bosses the online advertising world — people searching for products, have already identified a need for a product, and are actively looking for the right product.

Now, that we’ve covered the perks, it’s time to look at the nuts and bolts of Shopping Ads. Let’s start with…

Where do google shopping Ads appear?

Primarily on Google Search:

  1. To the right of search results.
  2. Directly underneath the search bar.
  3. Under the Shopping tab on Google search.
  4. In the Image section of Google search — if you have enabled search partners in your campaign.
google shopping ads example top of page
Google Shopping Ad at the top of search results
google shopping ads example right hand side
Google Shopping Ad to the right of search results
google shopping ads example shopping results page
Google Shopping Ad on the shopping results page
Google Shopping Ad on the image results page

And also on partner sites such as YouTube.

How do you create Google Shopping ads?

You don’t.

Surprising, but true!

So, who creates your ads?

Google and its super computers!

There’s a number of reasons for this approach:

  1. Google wants to avoid cluttering up the SERP (Search Engine Results Page) with lots of competing ad designs — they want to give users an excellent experience, one that helps them find the results and products they need without anxiety and distraction.
  2. Simplifies the ad creation process. For E-commerce stores with large inventories, creating adverts for individual products is a time-consuming process.
  3. Dynamically up-to-date ads. E-commerce inventories are constantly changing — items go in and out stock, prices go up and down. Having Google create the adverts on the fly, ensures that important details are bang up to date — and that only in-stock products are advertised.

How Google creates your shopping ads

Before you can run a Shopping campaign, you’ll need to set up a Google Merchant Center account and add your product data.

The information you upload, will include the following attributes:

  • Product name
  • Landing page link
  • Product image link
  • Description
  • Brand
  • Colour
  • Material
  • Size
  • Gender
  • Availability
  • Price
  • Sale Price
  • Shipping

Google uses this data to automatically make and populate your ads.

Your product information also determines whether your product, and therefore ads are relevant to a searchers query.

For example:

  • if your product descriptions contain the words ‘denim men’s jeans’ and the colour attribute ‘red’  — when someone searches Google for ‘Red Denim Jeans’ your product would be eligible to be shown in the advert.


  • If the same person searched for ‘blue denim jeans’, your red denim jeans would not be eligible to be shown in an advert.

 Unfortunately, just having an eligible product, won’t get your Shopping ads shown to the searcher. First you need to win the auction….

Unfortunately, you don’t get the thrill of battling it out with your rivals.

Google’s robots have all the fun.

Actually, it’s just one robot.

And even that’s an exaggeration.

It’s really a bit of code running on Google’s super computers.

Something like this…

How the auction works

Here’s a brief explanation of this intricate process:

  1. Someone enters a query into Google Search.
  2. Google pulls all relevant adverts from its database.
  3. It disregards ineligible ads.
  4. It calculates the Quality Score of remaining adverts.
  5. Quality Score and Max Bid (the most you’re willing to pay for the click) are combined to create your Ad Rank.
  6. The Ad with the highest Ad Rank wins the auction and best position on the page.
  7. The runners up in the auction gets the remaining spots on the search results page. The other Ads aren’t shown.
  8. The price you pay for a click is calculated from: The Ad Rank of the person below you in the auction and your Ad’s Quality Score.

I suggest you read my guide to the Google Ads auction. It’s easier to understand and has detailed examples and a lovely infographic!

How To Set up Google Shopping Ads

To get your Shopping campaigns up and running, follow these steps:

Step 1. Setup & Google Merchant Center account and add your products/data feed.
Step 2. Create a Google Ads Account.
Step 3. Inside Google Ads, link your Merchant Center account.
Step 4. Create a Shopping Campaign in Google Ads.
Step 5. Select your Merchant Center Account number.
Step 6. Choose campaign setting.
Step 7. Create Ad Group.
Step 8. Divide your products into groups and adjust bids for each group.

Useful: How to get your Ecommerce business ready for a Google Shopping Campaign.

Shopping Ad Rules & Eligibility

If you want to run these shopping ad campaigns, you need to aware of the rules and eligibility for running these ads.

Let’s start by looking at the nations that are eligible…

Google Shopping Ads Countries

According to Google, you can currently run shopping campaigns in 42 countries:

  • Argentina
  • Australia
  • Austria
  • Belgium
  • Brazil
  • Canada
  • Chile
  • Colombia
  • Czechia — Formerly and still commonly known as The Czech Republic 
  • Denmark
  • France
  • Germany
  • Hong Kong
  • India
  • Indonesia
  • Ireland
  • Israel
  • Italy
  • Japan
  • Malaysia
  • Mexico
  • Netherlands
  • New Zealand
  • Norway
  • Philippines
  • Poland
  • Portugal
  • Russia
  • Saudi, Arabia
  • Singapore
  • South Africa
  • South Korea, Spain
  • Sweden
  • Switzerland
  • Taiwan
  • Thailand
  • Turkey
  • United Arab Emirates
  • Ukraine
  • UK
  • US
  • Vietnam

One notable absence from this list is China . That’s a market of 1.379 billion people beyond the reach of Google’s Ecommerce friendly ads.

For various reasons (beyond the scope of this article) Google’s offering in China is limited. If China’s an important market for your brand, I suggest running PPC ads on Baidu.

Update: According to The New York Times, Google are looking to return to China with a censored search engine. Stay tuned for more!

What can you advertise in a Google shopping ad?

Most E-commerce owners won’t have any problems submitting their inventories to Google Shopping.

However, some products won’t be in line with Google’s policies

Let’s start by looking at the absolute no-no’s!

Prohibited goods you can’t advertise on Google

  • Counterfeit goods: Anything that is clearly fake or mimicking another brand.
  • Dangerous products: Weapons, explosives, recreational drugs, etc.
  • Products that encourage dishonesty: Hacking software, exam cheating products, fake passports.
  • Inappropriate content: Anything offensive or inappropriate for the platform. For example, racial discrimination or sale of endangered animals.
  • Unsupported shopping content:  See the full list further down the page.

Other legally or culturally sensitive products are a maybe…

RestrIcted goods that can only be promote on a limited basis

  • Adult-orientated content
  • Alcoholic beverages
  • Copyrighted content
  • Gambling-related content
  • Healthcare-related
  • Political content
  • Trademarks — You can use trademarks. However, if there’s a complaint from the trademark owner and the use of the trademark confuses the customers — Google will review the claim and your adverts.

For full details of these limitations refer to the Google policies. And last but not least, there’s a whole list of goods that Google has decided aren’t a good match for Google Shopping ads.

unsupported shopping content

Here’s the list of things you specifically can’t sell in Google Shopping Ads. I’ve attempted to give examples next to each item.

  • Ticket sales — concert, bus and airline
  • Cars, boats, trucks and basically anything with a motor that transport people are not allowed — motor powered bicycle (top speed 15 mph or less) are the exception.
  • Financial products — stocks, credit cards, insurance, ISAs, etc.
  • Currency — foreign exchange, bitcoins. Chocolate coins the exception!
chocolate coins the only currency you can advertise and sell with Google
Chocolate coins are eligible to run in Google Shopping Ads
  • Open-loop gift cards
  • Services that don’t result in ownership of a tangible product.
  • Immovable property — plots of land, homes.
  • Recurring billing products — magazines, mobile phones (some countries

See the full list here.

However, you can promote the above list items with Google Adwords and other Google advertising units.

Alrighty then, let’s start wrapping things up. There’s time for just…

Getting ready for Google shopping ads

I hope you’ve learnt a lot about Google Shopping Ads.

Will they work for you? There’s only way to know, run a test campaign.

I advise you to start with a small advertising budget and to increase spending once you’ve seen good results.

To drive the best results for your business:

  1. Try to collect the email addresses of website visitors.
  2. Use Google Analytics to measure the success of your campaigns. 
  3. Set up and run Remarketing campaigns.
  4. Hire a professional to Search Engine Optimise your Ecommerce store and reduce the amount you pay for clicks.
  5. Consider improving the page loading time of your website. 

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