Google Smart Shopping Campaigns: Performance, Pros & Cons, and When to Use [2021 Update]
Smart Shopping campaigns debuted in May 2018, with an overarching goal of simplifying the process of advertising products on the Google Ads platform through ads that operate using automated bidding and dynamic ad placement.
Smart Shopping campaigns include product shopping ads, local inventory ads, and display ads (including remarketing ads and Similar Audiences). Advertisers are able to choose a campaign objective and budget, and Google will leverage their machine learning technology to automatically bid on the advertisers’ behalf, and ultimately deliver their ad to relevant shoppers across a range of Google networks. The places your Smart Shopping ads may show include:
- Google Search Network
- Google Display Network
- YouTube
- Gmail
As Google explains in their Introduction to Smart Shopping campaigns video:
“Smart Shopping Campaigns optimize based on real-time signals, like the user’s query, time of day and device, to show your products to customers who are more likely to buy and spend more.”
Smart Shopping gives businesses the ability to generate product listing ads with minimal assets and input required. These campaigns also allow businesses of all sizes and niches to strategically experiment to determine if Smart Shopping ads might outperform standard Shopping ads for thoughtfully selected products, or differing campaign objectives.
But is Smart Shopping always the right choice for advertisers?
Here’s a breakdown of Smart Shopping Campaign performance data, the pros & cons, and when advertisers should consider using standard Shopping and Display campaigns instead.
Smart Shopping Isn’t Just Shopping Ads
While the name ‘smart shopping’ naturally leads many people to believe that they are dealing exclusively with Shopping (product listing) ads, as highlighted above, Smart Shopping ads can also be shown in a variety of locations across Google’s Display network, which includes third-party websites, YouTube, and Gmail placements.
These Display ads are often used as remarketing ads. The total data reported on a ‘Smart Shopping’ campaign encompasses the performance across all of these placements and ad types.
Across all ‘Smart Shopping’ campaigns that we manage, Display placements accounted for:
- 14.7% of clicks
- 15.2% of conversions
Results varied strongly by client, and in one case we found Display placement clicks to account for more than 78% of total Smart Shopping ad clicks.
CPCs are generally lower on the Display network, and we see this trend play out in Smart Shopping campaigns. Our clients’ Smart Shopping Display network ad clicks were 48% lower than their CPCs for regular Shopping ad clicks.
For context, this data was pulled from a 30-day window, and a total of 24 accounts with varying levels of traffic were included.
How Does Smart Shopping Work?
Smart Shopping creates product ads by utilizing a product feed that advertisers submit through the Google Merchant Center. This process is the same as standard Shopping and standard dynamic Display ads.
These campaigns are incredibly easy to set up in the Google Ads interface, with advertisers only needing to set a budget, an optional Target ROAS goal, and supply a bit of creative for the Display ad portion in order to get started.
Success Story: “Burke Decor boosts results with Smart Shopping campaigns“
Smart Shopping campaigns use ‘maximize conversion value’ automated bidding, which will also take into account your Target ROAS goal if provided.
What Is Smart Bidding?
For context, automated, or ‘smart’ bidding strategies (this terminology is interchangeable) use machine learning and “a wide range of auction-time signals including device, location, time of day, remarketing list, language, and operating system to capture the unique context of every search” to automatically set bids based on the likelihood of a search term converting.
Some automated bidding strategies, such as Target ROAS and Target CPA, are available for advertisers to utilize within their standard Shopping campaigns (as well as some of the other campaign types).
“Smart bidding strategies have become much more sophisticated over the years. We’ve seen performance improve and know that these bidding options will only become more important over time, so it’s time to start using them to your advantage and get comfortable with them now rather than later.”
— Josh Brisco, VP of Growth Media at Tinuiti
The Benefits of Smart Shopping
Easy Set-Up
The main benefit that is unique to ‘Smart Shopping’ is that it is incredibly easy to set-up and encompasses a number of ad types, enabling advertisers to quickly gain exposure across both the Google Shopping and Display networks.
For those who do not have the time to set up a full-scale advertising strategy, or the money to pay an expert to do so, this is a way to easily start advertising on Google without much hassle.
There are some other key benefits, including the ability to utilize automated bidding strategies and machine learning, but this is not unique to Smart Shopping campaigns; these strategies are available to use in standard Shopping campaigns as well as some of the other campaign types (including Display and Search campaigns).
Ideal for Testing the Impact of Display
Standard Shopping campaigns still make up the lion’s share of campaigns our teams manage, but interest in Smart Shopping has continued to grow since its debut, for both Tinuiti and our clients.
For a few clients, we’re currently running close to a 50/50 mix, investing half their budget in standard Shopping campaigns, and half in Smart Shopping campaigns.
That said, the majority of our enterprise level clients still lean most heavily into standard Shopping campaigns thanks to the control and insights they offer. For these clients, we often still leverage Smart Shopping campaigns for special promotional events where adding the display component can be a real value-add.
Mike Wojciechowski, Senior Director on Tinuiti’s Shoppable Media Team, explains:
“If a client is preparing for a big sale, there can be a real benefit to adding the reach of the Display network for specific sale products. If you sell swimwear, for example, and you’re running a 40% off promotion, it’s just a different customer experience to only show that strikethrough price on the SERP as opposed to billboarding your product everywhere—on YouTube, on Gmail, on Google Shopping, on the Display network. There’s an advantage to running promotional products in a Smart Shopping campaign—combining the reach, and potentially improving your conversion rate, on both the Display network and the Google Shopping side of things.”
Exclusive Features for Smart Shopping Campaigns
Google is actively building out new features that will be exclusive to Smart Shopping campaigns—including video and discovery ads, and new betas for customer acquisition—and has a dedicated development team for the campaign type.
Google has also recently announced a new partnership with GoDaddy. SocialMediaToday reports:
“GoDaddy users will be able to build Smart Shopping campaigns within their GoDaddy dashboard, which will enable them to utilize Google’s automated matching tools to get their product listings in front of people who are searching for related items within its apps.”
This news follows another recent announcement in May 2021, a collaboration with Shopify.
All signs indicate that growing the capabilities and adoption of Smart Shopping will continue to be a focus for Google as the importance of automation only continues to grow. Familiarizing yourself with these campaigns—and how to make the most of them—is only increasing in importance, as well.
As Google has increased the amount of time and resources that goes into growing their Smart Shopping capabilities, so has Tinuiti.
“Over the past year, we’ve been developing a new playbook to test out these campaigns in ways that align more with our best practices and the best interests of our clients.”
—Evan Kirkpatrick, VP of Tinuiti’s Shoppable Media Team
The Disadvantages of Smart Shopping
For advertisers that desire full control over their advertising efforts, data collection, and/or the ability to adjust their advertising strategy based on audience data, search terms data, and product information, Smart Shopping may be less than ideal.
Here’s why.
Smart Shopping campaigns provide no search term data and no audience data. The standard reporting Google provides for these campaigns doesn’t even break out performance by Shopping and Display ads—lumping them both together—though Tinuiti has the capabilities to provide this level of detail in proprietary reports for our clients and prospects.
“Google doesn’t provide as much transparency about the percentage of traffic they serve on the search results page vs. the Display network, but our team is able to put together a report to get that information for our clients and prospects. Advertisers running Smart Shopping campaigns have been looking at one row, but to isolate how wins or losses in either affected overall performance, you really need two—one for Display and one for Shopping.”
— Mike Wojciechowski, Senior Director on Tinuiti’s Shoppable Media Team
This information is crucial in determining which ad types and keywords performed best with which shoppers—and were served most often—so you can apply those learnings to future campaigns.
The lack of data means that advertisers have no ability to set ROAS or CPA goals based on search intent, type of user, type of ad, or type of product, and cannot control where their advertising spend is allocated.
Not only can advertisers not control their advertising approach based on these factors, but they also can’t collect this data from what is reported from the campaign, since the only metrics reported within the campaign are the best spend and conversion metrics.
Smart Shopping Campaigns may not be the best choice if:
- You don’t have a lot of historical data; the more conversion history you can provide, the better. Smart Shopping campaigns can’t be “smart” without ingesting any intelligence!
- You want to change your goals based on real-time data
- You want to allocate unique budgets to shopping efforts vs retargeting efforts
- Collecting search term data is important to you
- You have terms you don’t want to advertise towards (Note: Tinuiti does have the ability to add negative keywords for our clients running Smart Shopping campaigns by working directly with Google reps, but this is among our differentiators and not the norm for this campaign type.)
- You want to control what creative you advertise, and who you advertise to
- You want the ability to adjust your bids at the product level
How Should We Advertise Instead?
While Smart Shopping is often positioned as a ‘set it and forget it’ campaign type, we have realized the best results when the choices about what to run in Smart vs. standard are made very strategically.
We would never recommend simply turning over all your standard campaigns to Smart campaigns—each has their own unique capabilities and features, and neither is something you have to go “all in” on.
Standard Shopping campaigns often make the most sense for the majority of the ads you’re running—while Smart Shopping campaigns could be the perfect fit for specific products and promotions.
Smart Shopping campaigns are also a solid choice for new advertisers, or those who do not have the time or money to invest in an advanced advertising strategy. More advanced advertisers will more frequently benefit from the control and additional levers of optimization that can be pulled by using non-Smart Shopping campaigns.
The benefits of Smart Shopping—and automated bidding specifically—can be utilized in standard Shopping and Display campaigns, while all the benefits of data collection, unique goal setting, and having full control over your advertising efforts that standard Shopping and Display campaigns provide is often too important to lose.
Utilizing advanced strategies, such as an ISO Strategy (which allows us to control bidding based on the type of shopping search term), targeting in-depth audiences within both Display campaigns and Shopping campaigns (using RLSAs), and setting specific budgets and goals based on where in the funnel a user falls, is the suggested approach when advertising Shopping and Display ads.
Combining this with automated bidding strategies (such as Target ROAS or Target CPA) is the best way to leverage the benefits of machine learning of Google while also maintaining control of your advertising.
Google Smart Shopping Results
Some of the Smart Shopping campaigns we’ve run have achieved client goals and proved to be more effective than standard Shopping ads. Most of these instances involve segmenting products across multiple Smart Shopping campaigns, allowing us to set separate goals for each subset of products.
Here are some examples of segments we used for success:
The recent performance of each product, which we typically segment into four groups—products that are top performers (aka ‘winners’), products we want to increase visibility for, products that have performed poorly and we want to suppress, and then everything else—we call this the WISE strategy.
The price point of a product and whether it’s competitive compared to the market, which allows us to focus spend on products we know to be most competitive in the market at that point in time.
The relative margin of each product/brand/product type, so that we can set unique ROAS goals and budget for each grouping.
Although we have seen varying success of these types of campaigns depending on the performance, we have seen in some cases that when using the WISE strategy, our KPIs did improve compared to standard shopping accounts.
For example, in one instance when we were trying to improve the efficiency of an account, we saw WISE help cut costs by more than 50%, while reported conversion revenue only saw a 15% decline. In another example in which we wanted to push for more volume, we saw costs actually decrease by 1% while revenue increased by more than 33%. And in one final example, in an account in which a brand was getting 0 traffic regardless of how high we manually set a bid, we were able to increase visibility on this brand to a point where it recently drove 11% of total sales within all Shopping campaigns.
As mentioned previously, these comparisons are not fully apples-to-apples as standard Shopping does not carry the same inventory as Smart Shopping accounts, but we did still see notable overall lifts.
Final Thoughts
Smart Shopping is an effective tool to help advertisers get started advertising their products on Google.
It is also an effective tool for established advertisers to experiment, and test out new features exclusive to Smart Shopping. Whether you have an important promotional event on the near horizon, or simply want to see if Smart Shopping might be the right campaign choice for products that haven’t been performing well in your standard Shopping campaigns, there is plenty of room to strategically test the impact of adding automation and a display component.
With this said, if you have the time, expertise, and capabilities to run a full-scale advertising approach with Google Ads, then there are other options available that may be a better fit for the majority of your spend thanks to their targeting and measurement capabilities.
If you’re working with an agency like Tinuiti, and are exclusively running standard Shopping campaigns, devote some time in your next call with your account manager to discussing how you can get started with Smart Shopping, well…the smart way!
Editor’s Note: This post was originally published in April 2019 and has been updated for freshness, accuracy, and comprehensiveness.
You Might Be Interested In
