Ad spend for Google Shopping ads has increased by 38% over last year, while ad spend for traditional Google Search ads is dropping. This could be because Google Product Listing Ads are more visual, more informative, and they attract bottom-of-the-funnel, ready-to-buy customers.

But just because digital marketing departments are spending money on them doesn’t mean they see a positive return. Ad revenue is how Google makes about 80% of its money, and you don’t just want to spend money without a strategy.

You want Google to work for you.

In this post, we’re going to show how to optimize your Google Product Listing ads so that you’re driving sales and seeing a good ROAS (return on ad spend), and not just paying Google for a high cost-per-click bid.

Before we get to all of that, let’s cover Google Product Listing 101.

What is a Google Product Listing Ad?

A Google Product Listing Ad (PLA) is a data-feed driven ad that shows up in Google search when a user queries something product-related.

Unlike a standard Google Search Ad, PLAs give more information to the user, including images, reviews, prices, buying options, and more.

In the image below, you’ll see I googled “leather jacket,” and a series of Product Listing Ads came back.

These PLAs show at the very top of the page, before position zero and before search ads.  They are designed to help connect me with products that I could be looking for based on my keyword search.

But how does this process work?

More importantly, how can you make sure your product appears when it’s most likely to be purchased?

How Do Google Product Listing Ads Work?

Before we get into how to leverage Google Product Listing ads to drive and increase your ROAS, let’s cover the technical “how PLAs work.”

Here’s a simplified step-by-step:

1. Upload your product data feed into the Google Merchant Center.

2. Create a Product Listing Ad campaign inside Google Adwords.

3. Within that campaign, you’ll create Ad Groups for specific products (more on this below).

4. Finally, set your bid.

If you need more technical help connecting your eCommerce store to Google, check out our guide on setting up your product feed into Google shopping.

Now, let’s talk about the potential return on ad spend (ROAS) of using Google Products Listings. 

Google Shopping ads work because:

• They go after high-intent queries.

When I googled “leather jacket” (see the image above) Google made a calculated choice and determined (rightly) that I wasn’t likely looking for “the history of the leather jacket” or even “how to clean a leather jacket.”Google decided my search had high buyer intent, which means I’m near the bottom of the conversion funnel, ready to make a purchase. PLAs capitalize on this fact by showing me things to buy and reasons (such as social proof and product information) to buy.

• Product Listing ads bring new customers to your business.

44% of companies are focused on acquiring new customers. And acquiring new customers through shopping ads is a natural fit.
People are searching for products, not necessarily anyone’s brand. This means the customer is open to new brands. Once a customer clicks on your ad and becomes a paying customer, you can work on retargeting and upselling, which costs you less as existing customers are 60-70% more likely to buy from you.

How to Use Google Product Listing Ads to Drive Sales

Okay, now let’s look at some killer strategies for turning your run-of-the-mill Google Product Listing into a serious revenue driver.

Optimize Your Product Feed

Here are 4 strategies to optimize your Google Product listing feed.

• Use high-quality images that help convert by matching user intent to your image.
  

  You can do competitor research to see how other brands (similar to yours) are utilizing images. However, it should mirror the search intent’s feature and use. For example, if it’s a water bottle, the image should be of a water bottle, but if your image is someone drinking from the water bottle, the model might be distracting.Here’s what we see after Googling “blue slacks:”

The second and third ads are for full suits. That’s not only a mismatch between search intent and product listing; it’s also a visual indicator to a potential customer that says “not what you’re looking for.”Out of the five PLAs, it’s only the last ad that focuses on “blue slacks.” 

• Write value-driven and concise product descriptions.
  

  What will be in your product description will, of course, vary by industry. However, the main takeaway is to make sure it’s not overly long and full of fluff. Instead, you want valuable details that a customer needs to know to make a purchase (such as color or size or material or whatever else is relevant to your particular product).

• Use detailed titles to help attract your audience.

An ad is the sum of its parts. The more consistent the experience from the user searching for a term, seeing your product image, and reading your product title, the better.

Here’s an example:

I googled “french press,” and the first four product listing ads are successful in a few areas. However, the most expensive product, the Le Creuset French Press, doesn’t use its title to really give information that motivates a conversion. It’s the name of the French press and the name of its color (which I can already see and don’t need to be told). I’ve also seen it’s $75. As a prospective customer, I’d like to see some indication of what makes this French press worth the extra money, as it’s clearly the most expensive option available to me.

Pro-Tip: Google only allows 70 characters in the product title. If you go over 70 characters, Google will cut your title short and possibly muddy its impact.

Compare the Le Creuset French title with the Bodum Brazil. The Bodum Brazil tells us it’s an 8 cup/34 oz French press. This means customers who want something within that size are now more motivated to click on the Bodum. In the same vein, customers who want a larger or smaller French press will avoid that ad, which means they avoid hurting that CPC by clicking on an item that, when they get to the product page, they’re realizing is not a good fit.

• Use extensions to stand apart from the competition.

Looking back at the image above, you can see that the first ad has a price drop, and the last ad is available for pick up at a nearby store. These are called ad extensions, and it’s a way to add more detail to your product listing.
While there’s no way to guarantee ad extensions show up on your ad, you can still set the odds in your favor by ensuring you have relevant enhancements added to your product feed.

2. Add Negative Keywords

Unlike Google Search ads, PLAs aren’t keyword based. At least not directly. But you can (and should) add negative keywords to your campaign.

Negative keywords are your way of telling Google what your product should not be considered for.

For example, you want to reduce the number of keywords that are irrelevant to your product. If you’re selling coffee mugs, you may not necessarily want to show up when people search for coffee subscription services or coffee grinders.

However, just because a keyword is relevant doesn’t mean you want it triggering your PLA.

If you’re selling a bed-in-a-box memory foam mattress, you may not want the relevant keyword “mattress” to be part of your targeted audience. A broad keyword may have high volume, but it’s debatable whether that keyword has buyer intent for your specific product.

Adding such a high-volume keyword to your negative keyword list lets you focus on more specific niche keywords, such as “memory foam mattress” or “latex mattress” or “bed in a box mattress.”

Pro-Tip: Run a campaign with keywords that end with “Amazon” added to your negative keyword list. Example: “running shoes Amazon.” Sometimes adding “Amazon” to your negative keyword list works in your favor, sometimes it works against it. The best way to know is to test it.

Or, in the case below, tennis balls. Perhaps Wilson Sporting knows more than we do, but to a marketer, it seems unlikely that someone searching such a broad topic as “tennis ball” would be looking for a tennis ball pick-up basic with capacity for 75 tennis balls.

Plus, it’s good to remember that Google looks at your ad’s quality score when assigning rankings.

If you go after keywords that are not relevant to the user, then you’re likely to have a low click-through rate (CTR), which adversely affects your paid marketing campaign.

For more information about using negative keywords strategically, check out our post on developing a Google Ads Negative Keywords list in 2020.

3.  Use Product Groups

When you’re using Google Product Shopping ads, the default organization is to put “all products” in one large group. This means all of your products are listed in one campaign.

This isn’t smart for a few reasons because it means you’re using the same bid across all of your products.

Though it varies from industry to industry, we can almost promise not all of your products have the same margin, the same conversion rate, the same return rate, and so on.

Products are unique, and their monetary benefit to your company varies. Some products give you a better return on mobile ads, and some give you a better return on desktop ads.

Some of your products may fare better on a Facebook ad than a Google shopping ad.

This is why you want more than one product group for your products.

By bidding the same amount across all products, it’s very likely that you’re spending both too much on certain products and too little on others. Plus, it’s practically impossible to gauge your campaign’s success and to adjust as necessary.

Pro-Tip: Don’t place the same product in more than one campaign. This creates conflicting bids, which will cost you more money but not give you more exposure.

4. Set your bids strategically

You set your Google shopping ad bid to an automatic strategy (called a Google Smart Shopping campaign), where you give Google a maximum ad budget and time frame, and they won’t go over that budget (though how much is spent per day will vary greatly).

However, let’s talk about best practices when you’re doing manual bidding.

Setting bids can get complicated. To simplify it, focus on three things: your product’s conversion rate, price, and gross margin.

When you have those numbers, multiply them together to create your maximum CPC.

Your maximum CPC is when you’ll break even. That gives you a benchmark so you can set your initial bids lower than your max CPC.

5. Target your Product Listing ads towards the right audience

To help reduce over-zealous ad spend that brings you little return and wastes your budget on expensive clicks that don’t result in a purchase, you’ll want to use any data you can mine from Google Analytics to tailor your product listing campaign towards your audience.

This means using geo-targeting to change your bids based on location.

If you’re using a Google Shopping ad campaign, you hopefully know a bit about your target customer.

• Set up ads in regions that bring you the most revenue.

  You can even exclude entire areas that you don’t think will bring you any sales.

• Change your ads depending on whether or not you have a physical retail store in the area.
  

  As we’ve seen in the examples above, you can add ad extensions that show local items as available for pick up. This is especially valuable for mobile queries, as 46% of shoppers confirm local store inventory online before visiting the actual store.

Conclusion

We hope this guide on using Google Product Listing ads to drive sales was helpful.

In it, we discussed the importance of product listing ad campaigns and how they, by targeting bottom-of-the-funnel customers, can bring revenue to your business.

The key takeaway is that Google is trying to use product listings to offer up the right product to their customer.

So everything you do on your end, from managing the product feed to segmenting the product groups, is to help offer the right product at the right time.

This means your CPC was worth it. This means when your maximum bid is met, you’re getting a strong return on ad spend.

Remember, product listing ads are a great way to acquire new customers, which then become return customers as you can now reach out to them and use tools like Google Display Network for retargeting them in the future.