shopping

Google Ads Smart Shopping: How Smart Are They?

What are smart shopping campaigns?

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On May 3, 2018 Google Ads announced a new type of shopping campaign, called Smart Shopping. Continuing on their path of releasing new products driven by machine learning, Smart Shopping campaigns allow you to hand over your shopping ad management to the machines. At the root of the product, what separates them the most from traditional shopping campaigns is that the ads don’t just run on Google search, they also run on Youtube, Google display network & gmail. As we continually see in eCommerce product touch points are increasing and this product takes advantage of that.

The second feature that separates Smart Shopping from traditional shopping campaigns is that they are fully automated. While there could have been an option for Google to expand shopping campaigns to enable the advertiser to choose to expand the networks the ads run on, they chose not to. We would love to see this feature added in the future.

The third feature is that because they also run on the display network, Google chose to include remarketing (with no opt out). The intention is that you no longer need to run Shopping and Remarketing campaigns, only Smart Shopping.

That all sounds pretty good doesn’t it?

What are the downsides to smart shopping campaigns?

Smart shopping campaigns are a black box. The advertiser gets no insight into whether the ads ran on search, display network or gmail. All you see is "cross-network” for placement data. There is also no audience data shared. How much of your budget is being spent on remarketing? No idea and no way to find out.

You cannot do any of the following with Smart Shopping campaigns:

  1. Add negative keywords

  2. Change location targeting (feed runs in country targeted in the merchant center)

  3. Adjust bids by device

  4. Change ad scheduling

  5. Do anything with audiences

What can the advertiser control?

The advertiser can still see product level performance data which is great, but there’s nothing you can do with the data. When you setup the campaign you get to choose your shopping feed, a budget and ad text. The default bidding type is maximize conversion value, but you can choose a target ROAS if you please.

Here is what the ad setup looks like:

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Can any advertiser run smart shopping campaigns?

The requirements to run Smart Shopping campaigns are:

  1. You must have conversion tracking installed and passing revenue data

  2. You must have the remarketing global site tag installed

  3. You must have at least 20 conversions over the last 45 days across existing shopping campaigns

  4. You need an audience lists of more than 100 users

How do smart shopping campaigns perform?

This is what we’ve all been waiting for isn’t it?

There are certain clients we have tested this on in the past 6 months. You have to be careful because smart shopping campaigns are shown before traditional shopping campaigns. Even though you technically can have both on at the same time, your traditional shopping campaigns will receive almost no impressions.

What we have seen is that half of the clients we’ve tested smart shopping with, we have continued to run long term. Here is one example:

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The results above are over a 30 day period. Traditional shopping campaigns ran for the first 15 and smart shopping for the ladder 15 days. As you can see the cost per conversion dropped from $47.60 to $19.06. What’s interesting is you see similar conversion rates, but the cost per click is dramatically lower on smart shopping. That’s because the Google display network is less expensive to run ads on.

We also have cases where the cost per conversion is almost the same, we have cases where the cost per conversion dropped the same amount, but we lost too much volume and we have cases where the cost per conversion increased. Just like any other advertising products in Google ads: test, test, test.

What else should you know?

The most difficult piece in a real controlled test between traditional shopping and smart shopping is the retargeting portion. At Relay PM, we all but phased out running display retargeting on Google for clients because we’ve seen much better performance with Facbeook ads. It’s difficult to factor that into the campaign performance. The analysis can get complex.

Conclusion

For many advertisers we highly recommend testing this feature. Be aware of all the pros and cons. Be aware it includes retargeting. Understand in most cases you’ll never be able to have a real controlled test. There are too many pieces of data Google doesn’t share.

As we’re able to bring in more data we’ll continue to update this article. Please feel free to message us with any questions.

If you’re looking to test shopping campaigns, let us know.