Google Shopping Ads: How They Work and How to Win (2027)

By Corey Frankosky · Last Updated October 27, 2026

Google Shopping ads are the product ads with a photo, a title, a price and a store name that show up at the top of Google when someone searches for something to buy. You do not pick keywords for them. Google reads your product feed in Merchant Center and decides which searches each product is eligible for, so your feed and your titles do the targeting.

This guide covers how Google Shopping works going into 2027: where Shopping ads show, free listings vs paid ads, Standard Shopping vs Performance Max, how the auction works with no keywords, setup, structure, bidding, negative keywords and the optimizations that actually move results. If you would rather have someone run your Shopping campaigns for you, see my ecommerce Google Ads management page.

1What Are Google Shopping Ads?

Google Shopping ads are product ads that show an image, a title, a price, your store name and sometimes ratings or a promotion. Because the ad shows the product photo and price before the click, the people who click already know what they are getting and what it costs.

Here is how Google Shopping works in plain terms:

1. Your products live in Merchant Center. You send Google a product feed with every item's title, price, image, availability and identifiers.
2. Google Ads runs the campaign. You link Merchant Center to Google Ads and create a Shopping or Performance Max campaign that uses that feed.
3. Google matches searches to products. Shopping ads use your product data, not keywords, to decide when and where your ads show.
4. You pay per click. Standard Shopping campaigns charge only when someone clicks through to your site or a Google hosted local store page.

People also call them Google product listing ads, or PLAs. That was the old name, and it still describes them well.

2Where Google Shopping Ads Show

Where your Shopping ads can appear depends on the campaign type. Google's About Shopping ads page lists the surfaces like this:

Source: Google Ads Help, About Shopping ads, accessed October 27, 2026.

Keep in mind that Google's current page does not list Discover by name. Discover placements now run through Demand Gen inventory, which Performance Max can reach. If you only want product ads on Search, the Shopping tab and Images, Standard Shopping keeps you there.

3Free Listings vs Paid Shopping Ads

You do not have to pay to show products on Google. Free listings let your products appear at no cost on the Shopping tab, in Search, on Google Images and Lens, and on YouTube in some countries. New Merchant Center accounts are opted in by default. You can check the status under Marketing, then Marketing methods, on the Free listings card.

Free listings are a good start, and they use the same feed. The problem is that you cannot push volume on your best sellers. Paid Shopping ads are how you buy the top spots for the products that make you money.

4Standard Shopping vs Performance Max

A common question is Google Shopping vs Google Ads. Google Shopping is not a separate ad platform. It is a campaign type inside Google Ads that runs on your Merchant Center feed. Today you have two ways to run it.

Standard Shopping is still available. Google's Create a Shopping campaign help page still walks you through choosing Shopping as the campaign type, and Google's campaign total budgets now cover Standard Shopping as well. Performance Max is the goal based option that uses your feed plus text, image and video assets to serve across every Google channel.

When both campaign types include the same product, Google gives priority to the campaign with the higher Ad Rank. Performance Max no longer wins automatically. Most stores I work with run Performance Max for the bulk of the catalog and keep Standard Shopping for products that need tighter control. My Performance Max guide covers that setup in detail.

5How the Shopping Auction Works Without Keywords

With Search campaigns, you choose keywords. With Shopping, you choose products, and Google decides which searches each product is relevant for. Google uses the data in your feed to do that matching, and your title carries most of the weight.

When a search happens, every eligible product enters an auction. Your Ad Rank comes from your bid, or the bid Smart Bidding sets, plus how relevant and useful Google expects your product to be for that search. A product with a vague title can lose to a cheaper bid with a precise one.

For example, a title like "Classic Tee" gives Google almost nothing. "Tidewater Men's Organic Cotton Crew Neck T-Shirt Black Medium" tells Google the brand, the gender, the material, the style, the color and the size. That product can now match all of those searches.

That is why I treat the feed as the keyword list for Shopping. The full attribute list is in my Google Shopping feed attributes guide.

6How to Create Google Shopping Ads

Here is the process at a high level.

1. Set up Merchant Center. Create the account, verify and claim your website, add shipping and return policies, and add your products. My Google Merchant Center guide walks through every screen. If you are on Shopify, use the Shopify Google Merchant Center guide instead.
2. Get your products approved. Fix anything on the Needs attention tab of the Products page before you spend a dollar.
3. Link Merchant Center to Google Ads. Your Shopping campaign can only use a linked account.
4. Set up conversion tracking with values. Smart Bidding for retail needs purchase revenue, not just a purchase count.
5. Create the campaign. In Google Ads, click the plus button, choose New campaign, pick an objective such as Sales, then choose Shopping or Performance Max and select your Merchant Center account. Google notes you cannot change the Merchant Center account after the campaign is created.
6. Set bidding, budget and priority. Then choose locations and build your first ad group and product groups.

7Google Shopping Campaign Structure

One campaign with "All products" in a single product group is the most common setup I see, and it is the reason most stores cannot tell which products make money. Your structure should match how you want to spend.

• By margin. Use a custom label for high, medium and low margin so you can set different ROAS targets.
• By performance. Split best sellers from products that get clicks and no sales, and from products that get no impressions.
• By category or brand. Product groups can be built from category, brand, item ID, condition, product type, channel and custom labels.
• By season. Give holiday and seasonal products their own campaign so you can raise budgets fast. My holiday Shopping ads plan covers the timing.

Campaign priority (Low, Medium or High) decides which Standard Shopping campaign uses its budget when products overlap across campaigns. My step by step build is in how to structure Shopping campaigns for retailers.

8Bidding With Target ROAS and Maximize Conversion Value

Standard Shopping supports Manual CPC plus three automated strategies: Maximize clicks, Target ROAS and Maximize conversion value. Maximize clicks does not need conversions. The other two do.

• Maximize conversion value spends your budget to get the most revenue. Google recommends starting with it when your budget is limited.
• Target ROAS aims for a set return, such as 400%, which means $4 in revenue for every $1 in ad spend. Google's Target ROAS for Shopping page asks for at least 15 conversions per Merchant Center ID in the last 30 days.
• Naming update. In June 2026 Google renamed "Maximize conversion value with a Target ROAS" back to "Target ROAS". The bidding itself did not change.

The key with Target ROAS is to set it from your real numbers. Start near the ROAS you are already getting, then raise it slowly. Setting it too high is the fastest way to choke your impressions. If ROAS is new to you, read what ROAS is, then work out your break even ROAS with the ROAS calculator.

9Negative Keywords for Shopping

You cannot add keywords to Shopping, but you can add negative keywords, and you should. Since Google decides which searches your products match, the search terms report is where you find the junk.

• Standard Shopping. Add negatives at the campaign or ad group level, or attach a shared negative keyword list.
• Performance Max. You can add campaign level negative keywords and negative keyword lists, but Google says they apply to Search and Shopping inventory only. They do not stop your ads on YouTube or Display.
• What to block. Searches for free items, used or DIY versions you do not sell, competitor brands you do not carry, wrong sizes or models, and research terms like "manual" or "repair."
• How often. Check search terms every week for the first month, then every two weeks.

Be careful with broad negatives. Blocking "cheap" might cut good traffic if you sell budget products. My guide to spotting underperforming products shows how to separate a bad search term from a bad product.

10How to Optimize Google Shopping Ads

Most Google Shopping tips focus on bids. In my experience, these five areas move results more.

1. Titles. Titles can be 150 characters, but shoppers usually see 70 characters or fewer. Put the brand, product type and the attribute people search for first. No promotional text or all caps.
2. Images. Use a clean main image on a plain background with no watermarks or promotional text. Google will enforce a 500 x 500 pixel minimum starting January 31, 2027. Add lifestyle shots with additional_image_link.
3. Price competitiveness. Shoppers see your price next to your competitors. If you are 20% higher than everyone else on the same item, a better bid will not fix your conversion rate.
4. Custom labels. Use custom_label_0 through custom_label_4 for margin, season, best sellers and clearance, then structure campaigns and ROAS targets around them.
5. Product ratings. Star ratings help your ad stand out. Google asks for at least 50 product reviews before you apply, and reviews can take 2 to 4 weeks to go live after you register a reviews source.

From there, add GTINs wherever the manufacturer assigned one. Google says products with missing or incorrect GTINs may have limited visibility.

11Google Shopping Cost Per Click

Google does not publish an average Shopping cost per click, and most US benchmark reports cover Search only. The most current Shopping figure I found comes from Smarter Ecommerce's Market Observer, which tracks European ecommerce accounts and was last updated October 26, 2026.

Source: Smarter Ecommerce Market Observer, European ecommerce accounts, September to October 2026, accessed October 27, 2026.

These are European numbers, so treat them as directional for a US store. The useful takeaway is that Shopping clicks usually cost less than Search clicks in the same market. Your own cost per click will depend on your category, your price and your competitors. I did not find a current, sourced Shopping click-through rate or conversion rate worth quoting, so I left those out.

12Common Google Shopping Mistakes

• Treating the feed as set and forget. Titles straight from your store theme are rarely written for search.
• One product group for everything. You cannot fund winners or cut losers if they share one bid.
• No conversion values. Target ROAS and Maximize conversion value cannot work without revenue data.
• Setting Target ROAS too high on day one. Spend drops and the campaign never learns.
• Ignoring the Needs attention tab. Disapproved products cannot serve at all.
• Price and availability mismatches. If your feed says $29.99 and the page says $34.99, Google can disapprove the product.
• Never checking search terms. Shopping finds the searches for you, including the bad ones.

If you are studying for the Google Ads Shopping certification, I put practice questions at the end of my Shopping campaign structure guide.

13Frequently Asked Questions

Sources

• Google Ads Help, "About Shopping ads". Accessed October 27, 2026.
• Google Ads Help, "Create a Shopping campaign". Accessed October 27, 2026.
• Google Ads Help, "How Performance Max interacts with other campaigns in your account". Accessed October 27, 2026.
• Google Ads Help, "About automated bidding for Shopping campaigns" and "Set up Target ROAS bidding for Shopping campaigns" and "Effectively use Smart Bidding with Shopping and Performance Max campaigns". Accessed October 27, 2026.
• Google Ads Developer Blog, "Updates to Smart Bidding strategy". June 16, 2026.
• Google Ads Help, "Negative keywords in Performance Max campaigns" and "Campaign total budgets FAQs". Accessed October 27, 2026.
• Merchant Center Help, free listings, title, GTIN and product reviews data source. Accessed October 27, 2026.
• Smarter Ecommerce, "Market Observer". Last updated October 26, 2026. European ecommerce Google Ads accounts.