Grouping products by commercial value

Group Shopping products when the groups lead to different advertising decisions. A useful scheme separates products that may support more spend from those needing tighter control, using contribution, fulfilment and stock information rather than selling price alone. Keep the groups few enough that each has a clear action.

Define value before assigning labels

Agree on a per-order contribution measure. Start with expected selling price after normal discounts, then deduct product cost and the variable costs the business includes, such as delivery subsidy, payment fees and expected returns. Use the same accounting basis across products. A higher-priced item can leave less room for acquisition cost than a cheaper one.

The estimate is not a guarantee of profit. Costs can vary by region, basket and promotion, and one product may lead to sales of others. Add a stock or fulfilment flag so an attractive margin does not keep an unreliable offer in paid inventory. Keep missing cost data visible rather than treating it as a favourable margin.

A working scheme could use room to scale, monitor closely, limited stock and exclude for now. These are illustrative business labels, not Google performance tiers. Set business-specific contribution cut-offs: above the upper cut-off is room to scale, between cut-offs is monitor closely, and below the minimum is exclude for now. Treat limited stock as a separate stock trigger, not a contribution band.

Set the cut-offs from the contribution required to fund acquisition, using the same cost basis across products. Define when a product enters or leaves each group and what happens when its cost or stock data changes.

Product Contribution Groups by Commercial Value

Apply the groups to campaigns

Custom labels can hold values for organising products in Shopping ads. Put the contribution band in one custom label and stock or fulfilment status in another, so a product can have both a value group and an operational flag.

In Standard Shopping, subdivide inventory by custom label into product groups. These subdivisions create targetable units; use Manual CPC to set more room for products in room to scale, tighter bids for monitor closely, and lower bids when stock is limited.

For exclude for now, keep the product out of the active campaign inventory until its economics or fulfilment status changes; a label by itself is not an exclusion. Standard Shopping and Performance Max are campaign types, and they do not offer identical bidding controls. Target ROAS and Maximise Conversion Value are named value-bidding approaches, while Manual CPC provides granular bid control.

Check the residual everything else inventory after subdividing so products not assigned to a label receive the intended treatment.

Applying Product Groups to Shopping Campaigns

Revise groups using results

Compare spend, attributed sales and the contribution estimate on a consistent reporting basis. Check whether the advertised product sold, whether another product was bought, and whether price or stock changed. Conversions with cart data can add reporting metrics.

Record why a product moves: a supplier-cost change, expired promotion, fulfilment problem or sufficient sales evidence to question the estimate. A group is a current decision about advertising exposure, not a permanent characteristic of the SKU.

Review and Revise Product Groups Using Performance Data