It can be hard to get an edge with shopping ads these days. Many advertisers try to get super specific breaking out product groups into many P-Max campaigns and then subdividing those into more granular asset/listing groups. Other advertises dump 25,000 products into a single P-Max campaign with one asset/listing group pointing to their home page. Yet others have given up on P-Max and run old school Standard Shopping campaigns. Lastly, some folks run a hybrid of P-Max and Standard Shopping.

The truth is that there is no one-size fits all approach for success with Google shopping ads. But there are some tools that can help you figure out if, when, and how to group your products.

In this article I’m going to show you some ways you can use Google’s Product Category reports to effectively segment and optimize google shopping campaigns. Before going any further I’ll clarify what I mean by Product Category Reports. If you click on “products” inside your Google Ads account, you will see a default tab selection of “Products” along with 4 other tabs. These tabs include Categories, Brands, Product Types, and Custom Labels. Each of these correspond to the matching fields in your feed. It’s also noteworthy that Google just added “Categories” and this corresponds to Google’s own taxonomy of fixed product categories.

optimize google shopping campaigns with product categories

I recommend to add segment analysis to your regular optimization routine. It’s probably not an every week thing for mature accounts with few changes to feed data… but you should dive in at least monthly. New campaign, you should be reviewing relevant field segments pretty frequently.

Garbage in Garbage Out

First, to get any value from this exercise you need to have a complete trustworthy data set. This means if you plan to review product types data, you need to have all of your products properly categorized into logical groups using your own taxonomy. If you’re missing fields on a good chunk of your products this simply isn’t going to be useful.

Which Field Types to Focus On

If you sell a single brand of products, say your own, there is zero point in reviewing the brand report. Likewise, if all of your products fit into a single Google Product Category you should skip that. Otherwise, it’s generally worth looking at all of the categories you have setup properly.

How to Sort The Data

Once you’ve selected one of the tabs, let’s say Product Types, it’s time to sort and filter your data. First add the relevant metrics to your columns. This should, at least include impressions, clicks, CTR, cost, average CPC, conversions, cost/conv., conversion value/cost, and all 4 competitive metrics.

Ad Spend and ROAS

The first area I recommend looking at is raw ad spend vs. ROAS. Sort by highest to lowest spend and check your ROAS (conv. value/cost) for the major contributors. This is the lowest hanging fruit as you’ll be able to identify your biggest drivers of sales/return as well as drivers of spend with low return.

What to do with high performers?

If a high performing group is turning in above average ROAS (higher than your tROAS) and spending is restricted you might want to figure out a way to open up spending for this group. For clarity, spending may be restricted because you have a hard budget cap on the campaign or because competing product groups with lower performance are taking impressions or clicks away from this group. You can get a pretty good sense of the missed opportunity by looking at impression and click share metrics.

Here are some ways to unlock more opportunity.

First, you can take your best performing groups and put them into a separate campaign with an open budget. You can also, then, lower the tROAS on this new campaign to boost spending… these products (new campaign called “high performers”) will effectively get a better ad rank through higher bidding, than the existing campaign.

Second, you can drill down into this group and further identify the high performers. Those individual products could be move into a new high performers campaign.

What do do with low performers?

Groups with high spending and low returns are eating up your budget that could be better utilized elsewhere. You really have two options here.

First, you can simply pause these product groups, or at least the individual products that are eating budget and not generating sales. Second, you can move these products into a seperate “catch-all” campaign with a much lower bid. This will deprioritize them while still allowing them to run for what I’d classify as ideal queries… exactly matching the product title/description, such as a specific product model number or name.

Click Share, CTR and Impression Share

This is another good set of metrics to review. What you’re looking for here are product groups that you know to be big sellers (on other channels) that are not getting much activity. These products may simply be underserved for various reasons such as limited budget, poor feed implementation, too many similar products in feed, and so on.

As above, it’s probably a good idea to breath new life into these by moving them into a separate campaign with a lower ROAS and unlimited budget.

That said, you should keep a close eye on performance after making the change. If you have a data feed issue you won’t simply resolve that by moving these out of the old campaign.

Summary

If you’re not using product taxonomy to optimize Google Shopping campaigns you’re probably missing out on some great opportunities.

Key steps to improving your campaigns include:

  1. Data Quality: Ensure complete and accurate data
  2. Field Selection: Choose relevant fields (e.g., product types, brands)
  3. Data Analysis: Sort and filter data by metrics like ad spend, ROAS, CTR, and impression share
  4. Optimization: Identify high and low performers, adjust campaigns accordingly (e.g., separate campaigns, adjust budgets, pause low performers)