Google Ads priority bidding structure and bidding strategy

Google Shopping Ads Priority Bidding Mechanism
How is the priority bidding mechanism of Google Shopping constructed? To understand this mechanism, you must first understand that there is a priority setting function when creating a Google Shopping campaign. By default, the priority of all campaigns is set to ‘low’, but you can adjust it to ‘medium’ or ‘high’.
Under normal circumstances, if you have multiple campaigns, and they are all set to ‘low’ by default, and can bid on the same search, Google will only show the one with the highest bid. But you can influence Google’s display decision by setting different priorities so that it no longer selects campaigns based solely on bids.

Why do we use the priority bidding strategy? Let me explain this to you through an example.
Imagine that you are a clothing company and Levi’s 311 Skinny Jeans is one of your best-selling products. In order to expand your brand influence and attract potential high-end customers, you need to first attract a broad user group that only searches for “jeans”. At the same time, you also hope to attract those groups with higher purchase intent.
Of course, the ideal situation is to attract those precise users who directly search for “levi’s 311 skinny jeans”, who are often the most likely group to make a purchase.
However, the traffic and quality of each search term are different. Generally speaking, for general product searches with large traffic but low conversion rates, you need to keep the bid low to avoid too many invalid clicks. For those specific search terms with clear purchase intent and high conversion rates, you need to keep the bid high.
The priority bidding structure is designed to meet this need, allowing you to invest more money only for clicks that can bring high returns.

Google Shopping Ads Priority Bidding Structure
With the priority bidding structure, overseas advertisers are able to split campaigns to flexibly respond to different search intents and adjust bids. Here’s a practical application example to illustrate this: I worked with a jeans product client who first created three campaigns:
Campaign A: Focuses on capturing broad search terms (such as “jeans”) and achieves low risk and broad coverage by excluding brand and brand + style keywords. For this, the client set a lower bid and increased the priority. Campaign B: Focuses on brand-related searches (such as “levi jeans”), excluding brand + style keywords to attract high-quality traffic and remain competitive. For this, the client set a medium bid and set the priority to medium. Campaign C: Given the limitations of campaigns A and B, this series focuses on capturing precise searches with high conversion rates (such as “levi’s 311 skinny jeans”). For this, the client set a higher bid and set the priority to a lower

Google Custom Labels Segment Products
Using custom labels to segment products, advertisers can optimize bidding strategies and categorize products based on custom attributes to increase ROAS on Google Shopping ads. In the product feed, up to 5 custom labels can be added to label products and assign definitions and values.
While it is not mandatory, by segmenting products, advertisers can more accurately increase bids for high-performing products and achieve higher ROAS. This approach not only provides more granular bidding control, but also helps maintain market competitiveness, highlight sales highlights, and promote experimentation and innovation.

Taking a beauty retailer as an example, products can be categorized by product type, genre or brand depending on the level of segmentation required:
Product Category: Skin Care, Hair Care, Body Care, Fragrance Product Type: Facial Cleanser, Toner, Sunscreen, Shampoo, Conditioner, Soap, Moisturizer Brands: Aesop, malin+goetz, L’Oreal, La Mer , Clinique, Kheils, etc.
Additionally, you can create rules using Static Values ​​in DataFeedWatch to further segment specific products or product groups with custom labels. This approach allows cosmetics retailers to segment products based on numerous attributes such as season, sales events, promotions, profit margins, price points and performance:
Margin: >80%, >60%, >40%, <40% Season: SS24 new products, SS24 promotion, AW23 new products, AW24 promotion performance: best-selling 20% ​​products, high-value products, low-value products
Through detailed classification of products, you can manage your advertising budget more accurately, thereby significantly improving advertising effectiveness. Next, let’s take a closer look at 5 custom tags that advertisers commonly use to improve Google Shopping Ads ROAS. These tags help them segment their products more granularly.

Based on sales and promotions You can segment products by sales status (such as promotion, clearance) and bid higher for these specific products to maintain market competitiveness and optimize the use of shopping budget. This approach helps to increase product visibility, especially during promotions, as the goal is to maximize inventory sales.

Split products by profit margin based on margin so that a more aggressive bidding strategy can be adopted for high-profit products. This approach not only takes into account the profitability of the product, but also goes beyond the single indicator of ROAS, and is an effective way to improve overall performance. At the same time, you can also reduce bids for low-profit products to ensure that the budget is concentrated in the most profitable areas.

Based on price point Considering the price point of the product and its impact on performance, you can categorize the products by price range. For example, bidding high on high-end items may be more profitable than bidding on mid- and low-priced items.

Taking into account high-performing product groups or campaigns based on product performance is a popular Google Shopping strategy. You can increase bids based on product performance, such as setting up categories for best-selling products. In addition, you can further classify best-selling products based on profits to focus on high-profit best-selling products.

By Shipping Type You can segment your products based on shipping methods (e.g. free shipping, tiered pricing). If you offer special shipping offers to attract consumers, you can also group your products this way.

Priority bidding strategy for Google Shopping
Compared with search and display ads, Google Shopping ads are unique in that they do not rely on keyword and group bidding mechanisms. Because of this difference, the bidding strategy of Google Shopping ads has shown unique characteristics. And its built-in priority structure provides users with clear and specific guidance for bid adjustments.
Here are three ways to adjust the bidding strategy that you need to consider:

1. Manual bidding For users who are new to shoppable ads, manual bidding is a relatively safe choice. This strategy has been proven in practice, and its advantage is that it allows users to decide the cost per click of a specific product group. When setting bids, you can refer to the benchmark data of Google Shopping ads to adjust.
   Although manual bidding provides full control, it also requires users to invest a certain amount of time and effort to fine-tune bid management according to the size of their shopping account. Therefore, when choosing manual bidding, you also need to make corresponding time planning and preparation.
2. Maximize clicks The “maximize clicks” strategy is very suitable for shopping ads because it focuses on increasing traffic to e-commerce websites. Compared to manual bidding, this strategy allows you to set a maximum CPC cap at the campaign level, keeping your budget under control while saving management time.

In shopping campaigns, it is critical to set a reasonable bid cap. Google algorithms will try to get more clicks within the budget, even if some clicks cost a little more. At the same time, in order to maximize clicks, you need to set a maximum bid that is both realistic and consistent with the current average click cost.
In addition, although you cannot directly adjust each bid, you can adjust the maximum click cost according to the campaign priority to ensure that the priority bidding strategy effectively drives click growth.

3. Target return on ad spend (tROAS) Finally, I want to focus on target return on ad spend (tROAS), which is a very common and effective shopping bidding strategy. The core advantage of this strategy is that it closely operates around ROAS, a key shopping metric. ROAS not only focuses on the purchase behavior itself, but also pays more attention to the value brought by the purchase.
   When setting tROAS, advertisers can adjust it to a reasonable level higher than the current ROAS and clarify the priority. The algorithm will automatically adjust the price according to the target: a high target will reduce the price to maximize the return (suitable for high-priority ads), and a low target may increase the price to increase conversions.