Approaches for Performance Max Retail campaigns

The introduction of Performance Max can be seen as one of the most significant changes to Google Ads in a long time. This is the start of an era where Google is beginning to take full control of where and when an ad is served. So how should you, seller or agency, approach this new way of advertising?

ABOUT PERFORMANCE MAX

This summer (July-September 2022) Google will automatically upgrade the Smart Shopping campaigns to Performance Max campaigns.

Is the fact that Google is gaining more control a bad sign for advertisers?

We think it opens up new possibilities that were previously unavailable. Most campaigns cannot reach their full potential right now, because all the insights and options that a campaign has to offer are often simply not being used properly.

Various field studies have also found that using Google’s intelligent algorithms has proven beneficial, even for advertisers using sophisticated, manual approaches.

WHY CAMPAIGN STRUCTURE MATTERS

Campaign structure has always been a strategically important avenue for advertisers. This allows one to find the optimum level of control over automation.

Will there be one single campaign in the future that handles everything for the advertiser?

Probably not. Advertisers will always look for different approaches to gain more control over their campaigns.

We will introduce some new approaches to gain more control over shopping with the Performance Max campaigns.

THE THREE APPROACHES TO PERFORMANCE MAX IN RETAIL CAMPAIGNS

Here are three types of Performance Max for retail campaigns, broken down by their complexity:

• Easy – for small retailers who aren’t particularly knowledgeable about ads
• Medium – for mid-sized retailers who want to regain control but don’t want to build and maintain a very complex campaign structure
• Advanced – for larger and more sophisticated advertisers

The three approaches are explained in more detail below:

SIMPLE SETUP: THE ONE-CAMPAIGN APPROACH

Google recommends this approach.

It’s very close to “set it and forget it” because you can fully rely on Google’s sophisticated algorithms to deliver the best results.

This approach works for many advertisers, especially smaller businesses or those who don’t want to invest a lot of time into it.

While this campaign structure is very simple, it can still be very clever. Namely, you can use data such as product content, (first-party) audiences and richer conversion data (return, margin, LTV, etc.).

The benefit here is that this approach is easy to set up and maintain. However, at the same time, the advertiser has little insight and control.

MEDIUM STRUCTURE: THE SEPARATE SHOPPING APPROACH

On average, for merchants, Shopping ads account for about two-thirds of all Google Ads clicks and more than 80% of clicks on non-branded search ads. Therefore, it is logical to separate these campaigns from the rest in order to optimize and analyze them separately.

WHY?

To get more control (and insights). This approach allows you to run your Shopping ads in separate Performance Max campaigns. And you can create a separate (Performance Max) campaign for the other assets. So you have control over which segment of the range is promoted in separate Performance Max PLA campaigns. This is more difficult / not possible when the budgets are shared and the results are combined with display, text ads, youtube etc.

HOW?

Create a Performance Max campaign with Merchant Center Feed as the only asset.
Make sure final URL expansion is turned off.
You can run all Shopping ads in a separate Performance Max campaign, but for medium and large advertisers we recommend using separate campaigns for different product segments. This way you can better push your top products, save on unprofitable products and activate products that hardly get impressions and clicks.

In other Performance Max campaign(s), you should add the other assets: headlines, descriptions, images, videos, etc. Don’t add any products here, so you keep your Shopping ads separate from the rest. Again, you can segment (e.g. by category, priority or goal) or combine everything into one campaign. In the latter case, you can still create multiple asset groups within the Performance Max campaign.

ADVANCED CONSTRUCTION: HYBRID APPROACH

By adding an additional human-managed layer to the middle build, advertisers get a more complicated layout that relies on a stronger mix of PEOPLE + MACHINES.

The advanced setup proceeds in the same way as the middle setup (see previous paragraph, middle setup). Shopping ads are separated and ideally segmented to control and increase performance.

1. Search campaign(s) – Exact keywords

When you use Performance Max campaigns, you no longer have control over where and when a product is displayed. In the event that for some reason the algorithm decides not to bid on a product, it is beneficial to additionally set up a campaign with low manual bids. You could call it a “catch-all” or “safety-net” campaign. Certain campaigns can deliver an interesting additional stream of low-cost visitors alongside fully automated campaigns. These campaigns often generate nice additional revenue with a favorable ROI.

2. Standard Shopping campaign – all products – low manual bids

HOW?

In order to create the separate Performance Max Shopping campaigns, a separate Performance Max campaign must be set up, where it is important that:

No other assets can be added besides the Merchant Center Feed
The final URL expansion is turned off.
To create more than separate shopping campaigns with a selection of products, you can choose which subset of products you want to add to a Performance Max campaign.

Summary

PERFORMANCE MAX IS VERY COMPLEX, BUT THERE ARE METHODS NOT TO LOSE OVERVIEW

In this article, we covered the campaign structures for retailers using Performance Max campaigns. At this point, we’re still in the early stages of rolling out Performance Max campaigns. Therefore, keep in mind that these approaches are also early and not yet thoroughly tested approaches on how best to strike the balance between automation and control.

The internal structure and optimization of assets (product content, images, videos) and the use of data such as rich conversion data (returns, margin, LTV, etc.) or (first party) audiences are expected to become a dominant aspect of campaign optimization.

Need help creating your own Performance Max campaigns? At Nakoa Digital we are performance marketing and retail media experts. You can easily book a non-binding consultation with us and ask us your questions.