Why Google Shopping Ad Performance Depends on Bidding Strategy

Why Google Shopping isn’t ‘set and forget’ anymore. There was a time when Google Shopping felt simple.

Upload a feed > Set a budget > Add a ROAS target > Wait

But that time has now gone.

Today, Google Shopping is one of the most powerful – and misunderstood – growth channels in ecommerce. And the difference between average and exceptional performance rarely comes down to budget. It comes down to structure, data, and bidding strategy.

The Problem: Automation Without Direction

Google has pushed aggressively toward automation.

• Performance Max
• Smart Bidding
• Broad match Targeting
• AI Max
• Auto-applied recommendations

In theory, this should make life easier.

In practice, we often see accounts where:

• Spend increases
• CPCs creep up
• Impression share looks healthy
• But incremental revenue barely moves

ROAS might look acceptable on the surface – but blended margin tells a different story.

Automation is powerful. But without commercial guardrails, it optimises for platform outcomes – not business outcomes.

Why Bidding Strategy Is More Than a Setting

Bidding isn’t just a toggle in Google Ads.

It’s a commercial lever.

Most ecommerce brands, and rightly so, use:

• Maximise Conversion Value
• Target ROAS
• Performance Max

These strategies can work extremely well.

But the real performance difference doesn’t come from which bidding model is selected.

It comes from how intentionally it’s guided.

Because even with automated bidding, questions still matter:

• Are we comfortable prioritising volume over efficiency in certain periods?
• Should all products be treated equally in the auction?
• Are we consciously allowing branded and repeat demand to dominate spend?
• Are we clear on what “good” looks like beyond the platform-reported ROAS?

Without that commercial context, Google automation will naturally favour the path of least resistance:

• Existing customers
• High-converting products
• Branded queries

That often produces stable ROAS.

But stability and growth aren’t always the same thing.

The bidding strategy itself isn’t the issue.

The intent behind it is.

Structure Still Matters (Even If Google Says It Doesn’t)

There’s a narrative that structure is irrelevant in a PMax world. It isn’t.

Feed segmentation, SKU grouping, margin tiers, product lifecycle status – these still influence where budget flows.

If everything is bundled into one campaign, Google will always favour the easiest conversions. Not the most strategic ones.

A Performance Reality

Across accounts we’ve worked on, we’ve seen that when bidding and structure are rebuilt around commercial logic – not default settings – performance shifts quickly.

In one recent portfolio review, restructuring shopping and adjusting bidding logic resulted in a double-digit increase in conversion value within 60 days – without increasing total spend.

Not because we “beat the algorithm.”  But because we aligned it to the business. That’s the difference.

What Most Brands Don’t Realise About Modern Google Shopping

Google has rolled out significant changes in the past months that many ecommerce teams haven’t fully adapted to:

• Performance Max replacing Smart Shopping
• Enhanced conversions improving data signals
• Broad match and keywordless targeting
• New customer acquisition goals within PMax
• Profit-based bidding via value rules
• Auto-applied recommendations that quietly change campaigns

Each of these can improve performance – or quietly erode it. It depends on how they’re implemented and managed.

The Hard Truth

If the conversation isn’t covering:

• How new demand is being generated
• How bidding aligns with margin and growth goals
• Why certain SKUs are prioritised over others

Then there may be more potential in the account than the current setup is unlocking. Automation works best when it’s guided.

Without commercial direction, Google will optimise toward the most efficient conversions – not necessarily the most strategic ones.

And those aren’t always the same thing.

 

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