How to Optimise Google Shopping Campaigns: Bids and Structure

To optimise Google Shopping campaigns, give your products a structure that matches how they make money. Split them by margin, price and performance so that best sellers, low earners and products that never sell are not all fighting over one budget. Then choose a bidding strategy that suits the conversion data you have, and set your ROAS target from your real margins rather than a number that sounds good. Finally, go through the search terms every week and cut what wastes money.

Most underperforming Shopping accounts we review have the same problem. Every product sits in one campaign with one bid strategy and one target. Google spends where it finds conversions easiest, which usually means a handful of products take the budget while the rest of the catalogue gets little or no exposure. The fixes below are campaign-level changes to bidding, structure and segmentation that you can make in Google Ads and Merchant Center without rebuilding your website.

Check the foundations before you touch bids

Campaign tweaks cannot fix a broken product feed or wrong conversion data. Before you change anything, spend twenty minutes on three checks.

1. Feed health

Open Merchant Center and look at the product diagnostics. Disapproved products, missing GTINs, price mismatches and "limited performance" warnings all reduce how often your ads show. If a large part of the catalogue has issues, sort those first. Our guide on how to optimise for Google Shopping covers feed titles, images and attributes in detail, so we will keep this post on the campaign side.

2. Conversion tracking and values

If you plan to bid on return on ad spend, Google needs to know the value of every sale, and that value has to be accurate. Check three things:

• Every purchase records a value. A conversion with no value, or a flat value of £1, will mislead value-based bidding.
• VAT and shipping are treated consistently. Choose whether revenue includes VAT and delivery, apply it everywhere, and remember which one you chose when you set targets.
• Only real sales count as primary conversions. Newsletter sign-ups, add-to-baskets and page views should not sit alongside purchases as primary goals in a Shopping campaign optimising for revenue.

Enhanced conversions are also worth turning on if your platform supports them. They help Google match sales back to ad clicks more reliably, and that matters more each year as browsers restrict tracking.

3. Know your margins

You cannot set a sensible ROAS target without knowing your gross margin by product or at least by category. A spreadsheet with product ID, selling price, cost price and margin percentage is all you need. You will use it below to build custom labels and calculate break-even targets.

Standard Shopping or Performance Max?

Your choice of campaign type affects every other decision, so settle this first. Google offers two main ways to run Shopping ads: Standard Shopping campaigns and Performance Max. Performance Max shows your products on Shopping placements and also across YouTube, Display, Discover and Gmail, with Google taking more of the decisions.

Factor	Standard Shopping	Performance Max
Where ads show	Shopping tab, Search results and partner placements	Shopping plus YouTube, Display, Discover, Gmail and Maps
Control over bids	Manual or automated, set by product group	Automated only, set at campaign level
Search term visibility	Full search terms report	Search term insights, less detail
Negative keywords	Campaign and ad group level	More limited, including account-level negatives
Best suited to	Tighter budgets, testing, owners who want control	Accounts with good conversion volume and strong creative assets

Neither one is right for every shop. Plenty of small retailers do well with Standard Shopping because they can see where the money goes and stop waste quickly. Performance Max can work very well once the account has a steady flow of conversions and good images or video for the extra placements. Many accounts end up running both, with each one covering a different set of products.

If you run both on the same products, be aware that Google has changed over time how the two campaign types compete for the same search. Check Google's current guidance, and keep products separated by custom label so you always know which campaign is responsible for which item.

How to structure your Shopping campaigns

Structure is where most of the improvement comes from. The aim is to group products that deserve the same treatment, so that each group gets its own budget and target.

Why "all products" in one campaign underperforms

With one campaign and one product group, a £12 accessory with a 20% margin and a £400 item with a 50% margin get the same ROAS target. Google will push spend towards whatever converts most easily, which is not always what makes you the most profit. Products with little history get little traffic and never build the data they need to prove themselves.

Common structures that work

Do not use all six at once. A small shop with a few hundred products will usually do best with two to four campaigns. If you split too far, each campaign has too little data for automated bidding to learn from. A sensible approach is to start with margin bands, then pull out best sellers into their own campaign once you can see which products they are.

Product groups inside Standard Shopping

Within a Standard Shopping campaign you can subdivide products into product groups by category, brand, item ID, custom label and more. If you bid manually, this is where you set different bids. Subdividing down to individual item ID gives the most control but takes the most upkeep, so keep that level of detail for products that spend enough to justify it.

Listing groups in Performance Max

In Performance Max, the equivalent is the listing group within an asset group. You can include or exclude products by the same attributes. You cannot bid differently per listing group, though, so if products need different targets they need to sit in different campaigns.

Use custom labels to make segmentation easy

Custom labels are five extra fields in your product feed, numbered 0 to 4, that you fill in yourself. Google does not use them to match searches. They exist purely so you can group products in your campaigns any way you like. If you only take one idea from this post, start using custom labels.

Label	Example use	Example values
custom_label_0	Margin band	high_margin, mid_margin, low_margin
custom_label_1	Price band	under_25, 25_to_100, over_100
custom_label_2	Performance tier	bestseller, steady, underperformer, no_traffic
custom_label_3	Season	summer, winter, christmas, all_year
custom_label_4	Promotion or stock status	clearance, new_in, low_stock

You can add labels through your e-commerce platform's feed settings, a feed management app, a supplemental feed in Merchant Center (a simple Google Sheet works), or feed rules in Merchant Center. A supplemental sheet with product ID in one column and the label in the next is often the quickest route for a small shop.

Keep the values simple and consistent. "high_margin" in one place and "High Margin" in another will create two separate groups and cause confusion later.

Keep performance labels up to date

Margin and price labels rarely change. Performance labels do. A product that was a best seller last summer may be quiet now. Review performance tiers monthly, or automate them with a script or feed tool that tags products on recent sales. If you leave the labels to go stale, the structure stops reflecting reality.

Choosing the right bidding strategy

Bidding strategy should follow your data, not the other way round. Here are the main options for Shopping and when each makes sense.

Manual CPC

You set a maximum cost per click for each product group. It is the most hands-on option, and it suits new campaigns with little conversion history, very tight budgets, or situations where you want to test before handing control to automation. The downside is time: you need to review bids regularly and you cannot react to every individual auction the way automated bidding can.

Maximise clicks

Google tries to get as many clicks as possible within your budget, with an optional maximum CPC cap. It can be useful briefly to gather data for a new range, but it optimises for traffic, not sales. Do not leave it running for long.

Maximise conversions

Google aims for the largest number of sales within budget, treating each sale as equal. That suits shops where most products are similarly priced. It is less suitable when order values vary a lot, because a £10 sale and a £300 sale count the same.

Maximise conversion value, with or without target ROAS

This is usually where established Shopping campaigns end up. Google aims for the highest total sales value within budget. Add a target ROAS and it will aim for a set return on each pound spent. It needs accurate conversion values and a reasonable volume of conversions to work well. If a campaign only gets a few sales a month, the algorithm has little to learn from, and results will swing.

How to set a realistic target ROAS

Many owners pick a ROAS target because it sounds healthy. A better method is to work out your break-even point and build from there.

The break-even calculation

Break-even ROAS is one divided by your gross margin, where margin is expressed as a decimal of the selling price. If you keep 40% of the selling price after the cost of goods, your break-even ROAS is 1 divided by 0.4, which is 2.5, or 250%. At that level, every £1 of ad spend brings in £2.50 of revenue, which covers the cost of the product and the ad and leaves nothing over.

Gross margin	Break-even ROAS
20%	500%
25%	400%
30%	333%
40%	250%
50%	200%
60%	167%

This table is simple maths, not a benchmark. Your own target depends on your margin and your other costs.

A worked example

Say you sell a kitchen knife set for £80 including VAT. Excluding VAT that is about £66.67. The set costs you £30, delivery costs you £5 and you allow around £2 per order for returns and packaging. That leaves roughly £29.67, a margin of about 44.5% of the ex-VAT price.

Break-even ROAS on ex-VAT revenue is 1 divided by 0.445, which is about 225%. If your conversion tracking records revenue including VAT, you need to scale that up by the same proportion, so break-even on VAT-inclusive revenue is about 270%. That is why consistency with VAT matters so much.

If you want profit on the first sale, set the target above break-even. If repeat purchases are common and you know customers come back, you might accept a target near break-even to win new customers. That is a business decision, and it should be made deliberately rather than by accident.

Changing targets without breaking the campaign

Automated bidding needs time to adjust after each change. A few practical rules:

• Change targets in small steps rather than big jumps.
• Leave a change alone for at least a couple of weeks before judging it, longer if conversions are low.
• Do not change budget, target and structure all in the same week, or you will not know which change made the difference.
• Judge results over full weeks, since weekday and weekend buying often differ.

Bidding tactics by product group

Once your structure is in place, each group can be treated on its merits.

1. Best sellers: These already convert. Give them enough budget that they are not limited, and set a target that protects profit. If the campaign shows as limited by budget and is comfortably above target, it may be worth moving more budget here.
2. Steady performers: Keep them running at a target near your goal, and check every month for products rising into best seller status.
3. Products that spend without selling: Check the basics first: price compared with competitors, image quality, stock, delivery costs and the product page itself. If they still do not sell after those are fixed, lower bids, raise the target or exclude them.
4. Products with no impressions: These often have feed issues or titles that do not match how people search. A separate campaign with a lower target, or manual bids, can give them a chance to build data without taking budget from proven lines.

Search query sculpting with campaign priorities

Standard Shopping has a campaign priority setting (low, medium or high) that tells Google which campaign to use when the same product is in more than one. Combined with negative keywords, this lets you route different kinds of searches to different bids. This is sometimes called query sculpting.

A simple two-campaign version works like this:

• Campaign A, high priority, lower bids: contains your products with negative keywords for your brand name and specific product terms. It catches broad, early searches such as "chef knives", where buyers are still browsing.
• Campaign B, low priority, higher bids: contains the same products with no negatives. Because Campaign A blocks the specific terms, those searches fall through to Campaign B, which bids more for searches like "8 inch Japanese chef knife set", where buyers are closer to purchase.

This takes more setup and regular maintenance, and it works best with manual bidding or close monitoring. For smaller catalogues it can be a good way to stop paying premium prices for vague searches.

Search terms and negative keywords

Shopping campaigns have no keywords. Google matches searches using your feed, so the search terms report is your main way to see what you are paying for.

What to look for

• Irrelevant terms: searches for products you do not sell, or a different meaning of a word in your titles.
• Low-intent terms: "free", "DIY", "how to make", "second hand" (unless you sell used goods), "jobs" and "rental".
• Competitor brand terms: sometimes profitable, often not. Judge them on results rather than habit.
• Terms with spend and no sales: give them a fair amount of clicks before you decide, then add them as negatives if they still do not convert.

Match types for negatives

Use phrase or exact match negatives where a broad negative might block good traffic. For example, adding "cheap" as a broad negative could stop searches that do convert for you if price is your selling point. Go through the terms before you exclude whole words.

Performance Max

Performance Max gives less search term detail, but you can review search term insights and use account-level negative keywords to block terms you never want to appear for. Brand exclusions are also available if you want to keep your own brand searches separate. Google has added more controls over time, so check what is available in your account.

Segmenting by location, device and time

Location

Only target places you deliver to. Then check the location option: "Presence" shows ads to people in or regularly in your target area, while the broader option also includes people interested in it. For a UK-only shop, Presence usually avoids paying for clicks from people abroad who cannot order.

Look at performance by region too. If you charge more to deliver to the Scottish Highlands or Northern Ireland, conversion rates there may differ. With manual bidding you can adjust bids by location. With automated bidding, Google takes location into account itself, but very weak regions may still be worth excluding.

Device

Compare mobile, desktop and tablet conversion rates and order values. A big gap often points to a problem with your mobile checkout rather than a bidding issue, so test the checkout on your own phone before you cut mobile bids. Smart Bidding sets device bids itself, so manual device adjustments matter far less once you use automated strategies.

Ad schedule

Check day-of-week and hour-of-day reports over several weeks. If sales are consistently weak overnight, you can reduce spend then with manual bidding. With automated bidding, schedules are mainly useful for excluding hours when you cannot fulfil orders or handle customer queries.

Audiences

Add your website visitors and customer lists to campaigns, at least in observation mode. It shows you how returning visitors perform compared with new ones, which helps when you set targets and decide how much to invest in finding new customers.

Budgets, seasons and promotions

Do not starve your best campaigns

If a campaign that beats its target is limited by budget, you are leaving sales behind. Move budget from weaker campaigns before you raise the total. Be careful with shared budgets across Shopping campaigns, because the campaign that spends fastest can take most of the money.

Seasonality adjustments

For short events such as a weekend sale or Black Friday, Google Ads offers seasonality adjustments. These tell Smart Bidding to expect a change in conversion rate for a set period. They suit events lasting a few days, not whole seasons. For longer seasonal shifts, adjust targets and budgets gradually ahead of time.

Merchant promotions

If you are running a discount, adding a promotion in Merchant Center can show a special offer label on your Shopping ads. It costs nothing extra and makes your listing stand out next to competitors. Make sure the offer works exactly as described on your site, or the promotion may be rejected.

A simple optimisation routine

Consistency beats occasional big overhauls. Here is a routine a small business owner can manage.

Weekly

1. Check Merchant Center for new disapprovals or warnings.
2. Review search terms and add negatives.
3. Look at spend against target for each campaign.
4. Check that best sellers are in stock and not limited by budget.

Monthly

1. Update performance tier labels based on recent sales.
2. Review ROAS targets against margins, especially if costs or prices have changed.
3. Compare device, location and schedule data.
4. Check competitor prices for your top products.
5. Plan budgets for any upcoming seasonal peaks.

Quarterly

1. Review the whole campaign structure. Does it still match how your products make money?
2. Test a change, such as a new bidding strategy on one campaign, against your existing setup.
3. Recheck margins across the catalogue.

Common mistakes to avoid

Frequently asked questions

How long does it take to see results from Shopping optimisation?

Search term cleanup can cut waste within days. Structural and bidding changes take longer because automated bidding needs time to learn, so judge them over several weeks rather than a few days.

Should I use Performance Max instead of Standard Shopping?

It depends on your conversion volume, creative assets and how much control you want. Many small shops start with Standard Shopping for transparency, then test Performance Max on a set of products once there is enough data.

What is a good ROAS for Google Shopping?

There is no universal figure. A good ROAS is one above your break-even point, worked out from your own margins and costs. A shop with 60% margins can profit at a ROAS that would lose money for a shop with 20% margins.

Do I need a new feed to use custom labels?

No. You can add custom labels through a supplemental feed or feed rules in Merchant Center without changing your main feed. If you are starting from scratch, our guide on setting up Google Shopping walks through the basics.

Can someone guarantee my products will sell more through Shopping?

No. Nobody can honestly guarantee sales or positions on Google. Good structure, accurate data and steady management make it far more likely that your budget goes to profitable products, but results depend on your prices, products and market too.