Grow Revenue with Smart Shopping Campaigns

What Are Smart Shopping Campaigns?

Most eCommerce retailers have probably used Google Shopping campaigns to promote their inventory online, but may not have tested Smart Shopping. These campaigns combine insights from Google and retailers to maximize revenue or achieve the advertiser’s target return on ad spend (ROAS) using machine learning. Insights include search queries, seasonality, location, device, product price, cart size, product category, audience lists, and more.

According to Google, advertisers using Smart Shopping see nearly a 30% increase in conversion value on average compared to standard Shopping campaigns. Like standard Shopping, Smart Shopping ads appear on Google Search, Google Shopping, and the Google Display Network, and they also serve on Gmail and YouTube. Smart Shopping campaigns do not use targets, placements, or exclusions. The process through which Google chooses when and where to show your ads is 100% automated by an algorithm that determines the right time, place, and product to show based on the likelihood of the viewer to convert. By default, Smart Shopping campaigns use a maximize conversion value bid strategy, which aims to drive the most revenue possible at a given budget. Advertisers with a strict ROAS goal also have the option to use target return on ad spend (tROAS) bidding, which will attempt to drive maximum revenue at the given ROAS target. 

How to Test

The first step is to decide how you want to test. Your strategy should align with your campaign structure and your business goals. You can test Smart Shopping across all campaigns at once, or on a subset, such as only on high-margin products or groups of products with similar returns. 

Make sure you account for your Smart Shopping campaigns learning period and any conversion lags when you evaluate your test’s performance. Smart Shopping campaigns take about two weeks to ramp up and you shouldn’t make any major changes to the campaign during this time. Once the learning period is complete, your Smart Shopping campaign should be performing as expected, either maximizing revenue or hitting your target ROAS. A month after launching your campaign, you can evaluate performance by comparing the last two weeks of Smart Shopping to standard Shopping performance during the two weeks prior to launch.

Since Smart Shopping campaigns show ads across the Google Display Network and other Google surfaces, they are likely to have higher impressions and lower CTRs than standard Shopping. Focus on revenue changes or ROAS when evaluating performance, rather than high level metrics.

Based on how Google’s process of choosing which products to show that are geared to drive maximum revenue, you can run one Smart Shopping campaign that advertises all products in your catalog instead of multiple campaigns. If you use tROAS bidding and  margins are relatively consistent across your catalog, this is an effective strategy. However, if you are selling both high and low margin products, you should consider segmenting by campaign to set ROAS targets accordingly.

Optimizing for Effectiveness

Smart Shopping campaigns are highly automated, so there are fewer levers to pull to optimize performance than with a standard Shopping campaign. Adjusting budget and ROAS targets are the easiest ways to help your Smart Shopping campaigns scale efficiently. If you want to drive conversion volume, set a lower ROAS target to allow your Smart Shopping campaigns to bid more aggressively and drive more sales. If you need to see a higher return on your ad spend, set a more aggressive ROAS target and the algorithm will bid more conservatively to achieve better returns with fewer conversions. Adding more budget to Smart Shopping campaigns that consistently max out spend will allow more people to see your ads and drive more conversions. 

Another important aspect of optimizing Smart Shopping is feed optimization. Feed health is important since Google uses this information to determine when and where your products show up in searches. Monitor the Google Merchant Center to catch any feed or item issues, and make sure the feed is updated regularly.

Smart Shopping’s automated nature offers advantages for advertisers, though there are a few drawbacks to consider. Unlike standard Shopping and display, Smart Shopping campaigns do not allow you to add negative keywords or placement exclusions, nor do they generate search query or display placement reports. The black box nature of Smart Shopping campaigns may make some advertisers reluctant to try them, however the potential lift in performance makes them worth testing.