The Pros and Cons of Smart Shopping Campaigns

By Bethan Rainford - 27 May, 2020
Bethan Rainford 2021

In this guide, we explore the pros and cons of Google's smart shopping and look at some of the latest developments across the shopping channel.

In a previous blog, we spoke about the complexities of Google shopping campaigns for the fashion industry, its challenges, and best practices to maximise ROI. Here we revisit Google shopping with a focus on Smart shopping covering the pros, cons, and latest developments.

What is smart shopping?

Smart shopping was first announced by Google in May 2018 and separates itself from standard shopping campaigns by automatically optimising ad delivery to achieve an advertiser’s defined goal value i.e. ROI target. Google takes your product feed, campaign objective, budget and country settings and uses its machines learning to do the rest. Google’s algorithm decides where and when to serve your ads, how much to bid, and which audiences to target.  

Pros of Smart Shopping:

  • Smart shopping simplifies your campaign management by leaving the optimisation to Google, this reduces the resource required to fully manage the campaign yourself, and Google’s machine learning capabilities allow for large amounts of data and optimisations to be processed quickly which a human would struggle to compete with. 

  • Smart shopping combines search with display which allows advertisers to expand their reach, this includes both dynamic remarketing and dynamic prospecting. 

  • Smart Shopping uses machine learning to serve the most relevant combinations of your visual and textual assets to deliver the highest return.

Cons of Smart Shopping:

  • Reporting is limited- Placement, search query and audience data is not available. Whilst this is likely due to Google making all optimisations, and therefore the campaign manager has no use for the data, the lack of visibility means you have no knowledge of what may and may not be working. These could also be learnings you could have otherwise applied to other campaigns. 

  • Attribution becomes much more difficult as search/display/YouTube is bulked into one and there is no way to report on the performance of each separately. Naturally, each of these placements may drive quite different results and have a slightly different role in the conversion funnel. 

  • No ability to add negatives i.e. irrelevant or low intent search terms. 

  • No control over your products. Google recommends advertisers target all available products in one campaign which Google manages. However this means all products will be treated the same i.e. Google won’t factor into bidding the following; products on sale which an advertiser may want to push more aggressively, or products with different margins, or high-value products which you want more exposure on, or products with few sizes left in stock which you may want to pull back on. 

Summary of Smart Shopping Pros & Cons

Smart Shopping campaigns have been considered a way for Google to grow revenue across its shopping product, but also across Display and YouTube. Smart shopping, however, has most definitely made shopping more accessible to smaller advertisers, and in early testing, advertisers who used Smart Shopping campaigns drove over 20% more conversion value at a similar cost. There have been several success stories since which show a significant uplift in ROI, but of course, each advertiser is different and smart shopping campaigns may not work for everybody, either an uplift in ROI has not been seen, or due to the nature of the business or products sold, Smart campaigns are not feasible. 

Like all things in digital, testing is key. If you are keen to try Smart Shopping campaigns and the cons mentioned above are not a concern, we would recommend A/B testing standard campaigns vs Smart with a specific product group initially rather than your whole catalog. Many of the same principles exist in terms of set up, however, for a refresher we have included a checklist below. 

  • Google merchant and product feed set up 

  • Link Google merchant centre to Google ads 

  • Review the diagnostics tab in Merchant centre and fix any errors

  • Add the analytics eCommerce tracking code to your site

  • Enable remarketing in Google Analytics

  • Import Google Analytics metrics into Google Ads 

  • Import Google Analytics remarketing audiences into Google ads 

  • High-value products to be broken out into own Smart shopping campaigns 

  • Low-value products to be broken out into own Smart shopping campaigns 

  • Products in your Smart Shopping campaigns should be excluded from standard shopping and dynamic remarketing campaigns. 

  • Segment products across several product groups

  • If using Target ROAS, set different Target ROAS goals for each campaign based on margins

According to Google, it is best to leave smart campaigns running for at least 2-3 weeks before evaluating performance. Remember to compare like for like performance, especially as smart campaigns do not separate by placement. 

What is new with Google Shopping?

Google recently announced for searches on the Google shopping tab, merchants will now be able to show products listings for free. Retailers will continue to be able to show their paid ads alongside these new free organic listings, however as on the main search page they will appear primarily towards the top and bottom of the pages, and non-paid (organic) listings will take the remaining real estate within that tab. This will be rolled out later this month, and initially in the US. Whilst this was already on Google’s road map, the impact Coronavirus has had on retailers has pushed this forward. This is not, however, the first time Google has offered these listings for free. Back in 2012, this ad space was free, before Google made this a paid ad space with Google shopping. The recent changes appear to have come to rival eCommerce giant Amazon. As the change does not affect the Google search results page, we do not expect to see a huge impact on current Google shopping advertisers.