How Do Google Shopping Ads Work?
If you run an e-commerce store, you might be thinking about running Google Ads for your shopping feed. But how do Google Shopping Ads work, and will they actually drive revenue for your business?
It’s a fair question.
I speak to a lot of online retailers who know they should probably be using Shopping ads, but aren’t fully clear on how everything connects together or how the costs stack up.
In this guide, I’ll explain:
How Google Shopping Ads work
Whether Google Merchant Centre is free
When Shopping campaigns perform well
When they don’t make sense
Let’s break it down properly.
How Do Google Shopping Ads Work?
At a basic level, Google Shopping Ads use your product data rather than traditional ad copy.
Here’s how the process works.
1. You Connect Merchant Centre to Google Ads
You upload your product feed into Google Merchant Centre. This includes:
Product titles
Descriptions
Images
Prices
Availability
GTINs or product identifiers
You then link your Merchant Centre account to your Google Ads account.
Once connected, your product feed becomes eligible to show in Shopping results.
2. Your Products Appear for Relevant Searches
When someone searches for a relevant product, for example a specific type of brick or building material, Google matches that search to products in your feed.
Your product can then appear in the sponsored Shopping section at the top of the results page.
Unlike Search ads, you’re not bidding on keywords manually in the traditional sense. Google uses your feed data and campaign structure to determine when your product is relevant.
3. You Pay Per Click
Google Shopping Ads are not free to run.
You pay on a cost-per-click basis. Depending on the industry, clicks can range from:
10p per click
£1–£3 per click
£5–£10 per click in competitive sectors
It all depends on the product type and competition.
4. The User Lands on Your Product Page
When someone clicks your Shopping ad, they are taken directly to your product page.
They already know:
The product image
The price
Your brand name
This pre-qualifies traffic, which is one reason Shopping can convert well.
If they purchase, you generate revenue and ideally profit. That’s why Shopping ads are so powerful for e-commerce businesses when set up correctly.
Is Google Merchant Centre Free?
Yes, Google Merchant Centre itself is completely free.
I recommend that every e-commerce business sets it up, even if they are not running paid ads.
Why?
Because you can still appear in free product listings.
However, paid Google Ads campaigns significantly increase visibility. You’ll gain far more exposure compared to relying purely on free listings.
In my experience, businesses that combine:
Optimised product feeds
Paid Shopping campaigns
Proper conversion tracking
Where Do Google Shopping Ads Work Well?
Not every business is suited to Shopping campaigns. Let’s be realistic.
They Work Well When:
You Have Strong Profit Margins
If your margins are healthy, you have room to pay for clicks and still remain profitable.
Shopping ads require margin flexibility.
You Run a Proper e-commerce Store
Shopping ads send traffic directly to product pages. If you do not sell online, this format is not suitable.
Your Product Can Stand Out
If your product has…
Competitive pricing
Strong imagery
Unique features
Brand recognition
…you’re far more likely to win clicks.
You Want to Drive More Sales Volume
Shopping works well for businesses looking to scale revenue. The more conversion data Google gets, the smarter its bidding becomes.
Google Ads optimisation improves over time. The more conversions you generate, the better Google understands your ideal customer.
Where Google Shopping Ads Don’t Work So Well
Very Low Margins
If your margins are tight, it can be extremely difficult to generate profit once you factor in ad spend.
You may find:
Cost per click is too high
Conversion rates aren’t strong enough
Profit disappears quickly
In those cases, Shopping may not be the right primary strategy.
Lead Generation Businesses
If you don’t sell directly online and instead rely on enquiries or quote requests, standard Search campaigns are usually more appropriate.
Shopping is built for product-based e-commerce.
Lack of Budget
Google Ads works best when it has data.
If your budget is too small, you may struggle to generate enough conversions for Google’s algorithm to optimise effectively.
I usually advise businesses to commit a meaningful test budget rather than dipping in with very small spend and expecting immediate results.
If you want to read more on how much your should spend on Google Ads, check out my blog post.
Final Thoughts: Are Google Shopping Ads Worth It?
So, how do Google Shopping Ads work?
In simple terms:
You upload your product feed to Merchant Centre
Connect it to Google Ads
Pay per click
Send traffic directly to product pages
Generate revenue and ideally profit
For the right e-commerce business, Shopping ads can be one of the most profitable channels available.
But it’s not automatic.
You need:
Solid margins
Proper feed optimisation
Accurate tracking
A realistic budget
If you're interested in professional PPC management to grow your business, feel free to get in touch via my contact page at jonnyswiftppc.com/contact. I'd be happy to discuss how PPC can work for you.
