Have you ever wondered why some online stores seem to print money while others struggle to break even? After managing millions in e-commerce ad spend, I’ve discovered it usually comes down to one thing: how well they use Google Ads. Today, I’m going to show you exactly how to build a Google Ads strategy that actually works for e-commerce, based on real campaigns that are crushing it right now.

Why Google Ads is the E-commerce Game-Changer in 2025

Let’s get real for a second. There’s a reason why the biggest e-commerce brands pour millions into Google Ads: it works. But not just because it’s Google – it works because it taps into something incredibly powerful: purchase intent. When someone types “buy ergonomic office chair” into Google, they’re not just browsing – they’re reaching for their wallet.

Setting Up Your Google Ads Account The Right Way

Let’s start with the nuts and bolts. Setting up your Google Ads account correctly is critical to getting good results with Google Ads.

First, head to ads.google.com and click “Start Now” and go through the basic account setup. Connect your account up to Google analytics to be able to get valuable data from your site.

Now for the crucial part – conversion tracking. Here’s exactly how to set it up:

1. In your Google Ads account, click “Tools & Settings” > “Measurement” > “Conversions”
2. Click the blue plus button to add a new conversion action
3. Select “Website” as your conversion source
4. Choose “Purchase” as your conversion action
5. Set your value settings to “Use different values for each conversion”
6. Important: Set your counting method to “Every conversion” for e-commerce

Don’t see the ability to import all of these conversion events? Don’t worry, most tools or site builders have off the shelf solutions to implement advanced e-commerce tracking. If you’re using woocommerce download google site kit. If you’re using Shopify it’s there by default, re-check that your google analytics conversions work. If you have a custom website, you might need to ask developers to implement these events.

Google Ads Campaign Types

Let’s talk about the three campaign types that matter for e-commerce:

Shopping Campaigns:

These should be your bread and butter, it’s really hard to beat the returns of a correctly setup Google shopping campaign.

How they work is you pay google for your product listings to show up directly in search results, right here. Why these placements are great is because you get the best of both worlds. They show up in search results directly related to your product, so there’s always a purchase intent and it’ll be far easier to convert these people.

It’s way easier to sell a dog bed to someone whose actively looking to buy one than trying to convince them from scrolling in a feed and the other factor is unlike search results they are visual, so when searching and comparing products it’s actually quite likely product listings will perform better than search.

We will go over how to setup a shopping campaign later.

Search Campaigns:

Search campaigns are great. They are the standard thing that comes to mind when thinking of Google, you search something up and a bunch of text results come back with the few top results being ads. But their also expensive, very expensive.

They work best for products that are over $200 (180ish euro) or products that involve complex purchases such as custom orders for b2b products or technical products. So you’re more so looking to run search campaigns for things like electronic refurbs, high end consumer products but mainly business to business products.

Display Campaigns:

Display campaigns are the odd ones in the bunch. We don’t really like them, we don’t really want to use them. Display ads show up on random website which are in the google Adsense products. These ads are really really really cheap but that’s deceptive. It could take tens of thousands of clicks to land a sale!

Their low intent and depending on industry, quite crowded with bot traffic.

But, we still like and use display campaigns? Why? Because of re-marketing. If real humans go on your site and get “fingerprinted” we can serve them ads on other sites they go, reminding them to go back and buy that dog bed they spent 15 minutes looking at.

How To Correctly Setup Google Merchant Center

Google merchant centre is basically a database for retailers to upload their products, this allows google to populate these shopping results that come up whenever you search for a product or product category.

These results are great, as they can be either paid or organic. If you have a 100 SKUs and only plan to advertise a dozen of them, still upload all your products as who knows you might rank really well organically.

1. Go to merchants.google.com and create your account
2. Verify and claim your website URL
3. Upload your product feed

I recently helped a client revamp their product titles using this format, and their click-through rate increased by 47% in just two weeks, think of your merchant feed as a garden. It doesn’t have to be all perfect right away but you should be improving wherever you can, with better titles, more descriptions and obviously having everything as accurate as you can.

This is quite critical as if you add a bunch of rubbish to your descriptions your dog bed listing will be getting served to searches that are unrelated to it.

Bidding Strategies Explained

Each campaign type has access to a few different bidding strategies. Firstly there are 2 main types of bidding strategy. One is where you, the human manually sets what you want to bid for and how much and the other are smart bidding strategies. Smart bidding strategies are effectively big AI algorithms which optimise for certain goals.

Let’s jump into that further.

Manual Strategies

Manual CPC – Manual CPC is a campaign type where you set the individual max bid you are willing to pay for every keyword you are bidding for. This is how digital advertising used to work years ago and to this day you can incredible results by sticking to your guns and manually optimising your campaigns, but for large campaigns this can get really complicated really fast and most of the time you get better results with some automated bidding strategies.

Smart Bidding

Maximse Clicks – M.Clicks is a bidding strategy which goal is to get the most possible clicks with your daily budget. It doesn’t care if you land sales with these clicks or not it just wants to be clicked on the most. You can also set your overall max cost per click you are willing to pay for. This smart bidding type sounds, quite useless but there are good reasons to run max click campaigns but I’ll get into that later.

Max Conversions – M.Conversions for most people is the bread and butter of Google Ads, the goal with this strategy is to get the most conversions possible within it’s budget. That sounds amazing, isn’t google very smart? I just need to click on this and it’ll land me tons of sales!

Well yeah, not really buckero. Google’s algo can be shockingly intelligent but most of the time it’s quite dumb and will need a ton of work to get where you want it to be. Just setting your campaign like this will never yield great results but honestly, if you’re running an exact match type search campaign and have ad groups properly set up – this might be all you need! But this guide is the ultimate e-commerce guide so it’s not good enough for us.

The Fool Proof E-commerce Google Ads Strategy

When it comes to Google Ads, regardless of what people make you believe it’s rarely if ever one size fits all but over the years and working with a bunch of smaller and large accounts I’ve developed a relatively simple prescriptive strategy that is “one size fits most”, and this involves building up your account block by block. There’s no reason to rush.

Initial Campaign Setup

How to Optimise E-Commerce Campaigns on Google Ads

Let’s get into the nitty-gritty of optimization. Here’s your weekly optimization checklist. You can start this during your test campaign but honestly you’ll have very little data to do much with. So it is optional and can save you a few bucks in the first 2 weeks.

Daily Optimization Checklist (20 minutes)

1. Check search terms report
   • Look for irrelevant searches
   • Add negative keywords
   • Note any unexpected popular searches
2. Monitor product performance
   • Check which products are getting clicks but no sales
   • Review your pricing against competitors for these products
   • Check if these products have enough images and reviews
3. Custom Labels Strategy

   Create labels for:

   • Margin levels (High/Medium/Low)
   • Seasonality (Summer/Winter/Year-round)
   • Price points (Budget/Mid-range/Premium)
   • Stock levels (Limited/Normal/Oversupply)

Implementing Performance Max: The Advanced Strategy

Once your shopping campaigns are stable (usually after 4-6 weeks), it’s time to juice the hell out of your campaigns. We’re going to be setting up a p-max campaign.

Setup Process

1. Create a p-max campaign
2. Set budget to 50% of your shopping campaign budget
3. Set it as a max conv. bidding strategy
4. Setup your asset groups

Asset Group Options

Profitability Tracking: The Numbers That Matter

Firstly, we need to know what our required ROAS is to break even.

Calculate Your True Required ROAS

1. Calculate your total cost per sale:
   • Product cost
   • Shipping cost
   • Payment processing fees
   • Platform fees
   • Labor cost per order
   • Customer service cost
   • Returns rate cost
2. Calculate your required ROAS:

   Required ROAS = (100 / Profit Margin %) * 1.2

   Example:

   • Product sells for $100
   • Total costs = $70
   • Profit margin = 30%
   • Required ROAS = (100 / 30) * 1.2 = 400%

Beyond Google Ads: Maximizing Your Success

There’s a lot more you can be doing. I already covered it already but yes, a lot of the results you get on google are reliant are things outside of the google ads dashboard. Your site’s speed, UX and how easy it is to find products are critical elements to making a killer ad campaign.

Optimization Checklist

1. Website Speed Optimization
   • Compress all images
   • Implement lazy loading
   • Use a content delivery network (CDN)
   • Minimize HTTP requests
   • Enable browser caching
2. Customer Journey Optimization
   • Set up abandonment cart emails
   • Create post-purchase email sequences
   • Implement SMS marketing for order updates
   • Use exit-intent popups for email collection
3. Conversion Rate Optimization
   • Add trust badges
   • Display shipping information prominently
   • Show real-time stock levels
   • Implement buy now, pay later options
   • Add size guides and detailed specifications
   • Display customer reviews prominently