What is Google Shopping and how does it work?

Google Shopping provides a way to display your products on Google Shopping whenever someone searches for a term that’s relevant to your products, making it easier for potential customers to find you. Knowing exactly what Google Shopping is, how it works and how it can benefit your business will allow you to take full advantage of the platform, so let’s have a look in more detail.

In a saturated marketplace, it can be difficult to get your brand and products in front of the right people at the right time. Marketplaces such as Amazon and Etsy are a great way to increase your chances of success, but they can be expensive and cut into profits.

According to research, as of November 2022, e-commerce accounted for 30.2% of UK retail sales. This is a stark contrast to February 2020 when online sales accounted for 19.1%. 

Google Shopping provides a way to display your products on Google Shopping when someone searches for a term that’s relevant to your products, making it easier for potential customers to find you. 

Statistics show that Google Shopping Ads drive 76.4% of all e-commerce ad spend. As a retailer, making sure you’re using Google Shopping Ads to drive customers to your website is essential. 

Knowing what Google Shopping is, how it works and how it can benefit your business will allow you to take full advantage of the platform and drive sales for your business.

What is Google Shopping?

What are Google Shopping Ads? 

Google Shopping is a paid advertising platform provided by Google as part of Google Ads (Paid Search). Formerly known as Product Listing Ads, Google Shopping campaigns allow potential customers to search for, view and compare products from different online retailers. 

The products are shown when customers use Google to search for a particular product. They usually know what product they’re looking for and want to find the best price or supplier to buy it from. These results can appear on the main search engine results page or under the Shopping tab. 

Whilst 63% of product searches start on Amazon, a further 48% of consumers start their product search on search engines. This means Google only comes second to Amazon when consumers are looking for a product and provides you with a great opportunity to maximise the visibility of your products online. 

‍In short, Google Shopping provides another way for you to advertise your physical products on Google, helping to maximise exposure. Unlike text-based ads that are optimised and shown based on chosen keywords, Google Shopping uses the product data you enter into your Google Merchant Center account. 

Google Shopping campaigns are particularly effective because they show a high-quality product image, product price and features and allow searchers to read more about the product, as well as compare prices between different online retailers. 

How do Google Shopping Ads work? 

While Google Shopping looks similar to marketplaces such as Etsy, Amazon or eBay, it is not an online shop. 

Google Shopping provides a way for online retailers to gain visibility and drive traffic and sales to their own websites.

You upload your product feed to Google Shopping to ensure that your inventory shows when potential customers search for a product or specific keywords. 

Unlike Google Ads, you don’t bid on specific keywords. Google will decide when your product listings will be shown using the information in your feed, your site and the amount you choose to bid. The only keywords you’ll use in your campaigns are negative keywords - these are the words you don’t want your ads to show for. This can be done at both campaign and ad group level. 

‍To fully understand how Google Shopping really works, it’s also important to know that there are two different parts to it. 

A comparison shopping engine 

Within Google’s Comparison Shopping Engine (CSE), shoppers are able to search for specific products and compare the offering and prices of various sellers. From here, they can either click through to the retailer's website and buy there, or they can check out if the product is eligible for Buy with Google

This part of Google Shopping acts as a product research and discovery hub, with tools and features available to make purchase easier for customers. 

An advertising platform

Google Shopping Ads show in the search results and display product details to customers, including:

  • Product Image
  • Star ratings 
  • Customer reviews 
  • Promotions 
  • Price 
  • Local availability 

These ads use a PPC model and allow you to drive traffic to your website. It will also give you control over when and where your ads appear to ensure that you control your spending. 

‍For e-commerce, SEO can be a long process and can take time to build. On the other hand, Google Shopping provides an easier and more cost-effective method for reaching the right people in the right place and driving sales for your business. 

How to run Google Shopping Ads

In order to create a Google Shopping campaign, you will need two platforms:

Let’s have a look at both of these in more detail:

Google Ads 

Previously known as Adwords, Google Ads is an advertising tool which allows you to bid on keywords related to your products or business so that you will appear at the top of Google’s search results.

You can use this to save Shopping campaigns, set a budget, handle bids, analyse campaign data, and optimise your marketing efforts. 

Google Merchant Center 

This is where you will upload and update your product feed (information about your product types), including attributes such as EAN, price, colour and ISBN. 

Why should you use Google Shopping for your business?

As a business, if you’re running Google Ads and you’re optimising your website for SEO, running Google Shopping Ads means you’ll be seen in the Google search results more than once. 

Your brand will be seen as a paid ad, in the organic results and the Google Shopping results. 

Google Shopping makes the user search experience more visual and provides them with the information they need to make a purchase decision in one place. This means they don’t have to scroll through text-heavy results or click on multiple websites to find the information they want. ‍‍

As you can see, recent growth in online shopping has increased the need to be seen online and make sure that you’re driving customers to buy your products. 

Google describes Google Shopping as a platform that “makes the world your storefront”. By investing in Google Shopping for your business, you have access to everyone searching in Google for your product or product groups which can help to drive traffic and increase your sales. 

What are the benefits of Google Shopping Ads for your business? 

Knowing how Google Shopping works is the first step to implementing it for your business. The second, and most important step, is knowing how it will help you to grow your business. Here’s a run down of how Google Shopping can help you to increase sales and revenue: 

‍1. High search volumes 

Google controls 92% of search engine market share worldwide and serves up to 5.6 billion search queries every day. That makes it the biggest search engine in the world and according to Google, shoppers go online in 60% of shopping occasions. 

2. Broaden your brand’s reach 

Google has expanded the areas in which Shopping Ads are shown so they do not just appear in the standard search results anymore. This provides you with a better chance of reaching potential customers. Results are now shown in:

  • Shopping tab on Google search 
  • Google images 
  • Google Search Partner websites 
  • On the Google Display network, including YouTube and Gmail 

3. Drive more targeted traffic 

Driving more traffic to your website doesn’t always mean more sales. That’s why it’s important to use Google Shopping to target the people who want to buy your products. The platform allows you to find the people with the intent to purchase your products, as you can be relatively sure the people who are typing search terms into Google for your product are ready to buy. 

This is in contrast to regular search when you need to be aware of which stage of the buyer’s journey searchers are in to help them find the right information. 

4. Enjoy better performance than text ads 

Searchers who find and click on a Google Shopping Ad show a higher purchase intent than those who look at PPC text ads. This means that Shopping ads have a higher conversion rate. 

Figures show that Google Shopping Ads generate 26% higher conversion rates and have a 23% lower cost-per-click than text ads. This means that you will get a better return on investment when using Google Shopping as a way to promote your products.

5. Easy-to-manage  

Text ads require you to choose keywords you want to target and bid on them separately. However, Google Shopping simplifies this process with no need to choose the keywords you want to bid on. These are automatically chosen by Google based on the product information in your Google Merchant Center account (your product data feed). It uses this information to show your ads in searches that are relevant. 

A recent update to the Google Shopping platform means you can run Smart Shopping ads which are even easier to set up and manage. All you need to do is enter your campaign objective and budget, and Smart Shopping uses machine learning to help with automated bidding and ad placements. 

6. Great reporting ability 

Google Shopping allows you to check on the performance of your ads easily and to see which ads are performing well. This will allow you to track your spend and make sure you’re getting the best return on investment for your ad spend. It also helps you to benchmark your performance and provide goals to work towards. 

Key takeaways

If you’re selling products online, Google Shopping is an extremely valuable tool that we recommend you utilise. It’s one of the best ways to get your products seen by customers who are in-market for your products because they’re likely to be at the bottom of the funnel - they know exactly what they want to buy, and they’re looking for the best deal. 

The campaigns are easy to set up, manage and control and will deliver great results for your business, helping you to achieve your business goals. 

If you’d like to know more about how Google Shopping works or would like help with managing your campaigns, please contact our team today

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Blog written by

Mark Skinner