Why Single Product Ad Groups are a Google Shopping Nightmare

Oct 30, 2018

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Happy Halloween! It’s that time of the year again for tricks, treats, and of course a few good scares as well.

Haunted houses and ghastly ghouls aside, “scary” can mean a lot of things for all different walks of life, especially more so in ecommerce marketing.

Our team sees and tackles our very own type “scary” every single day in the form of mismanaged or poorly optimized approaches to Google Shopping.

I will preface that while I do believe that there is no single right way to setup and manage Shopping campaigns, there are some specific methodologies I have written and spoken about before at length that I simply cannot agree with.

As an homage to Halloween, I am going to tackle one such approach to structuring Shopping campaigns that frightens me so:

“SPAG” or Single Product Ad Groups

First Off, What Is SPAG?

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As the name suggests, Single Product Ad Groups is an approach to Shopping campaign structure which attempts to achieve item-level granularity by way of creating a single ad group in Google Ads for every single product from one’s feed in Merchant Center.

Yes, you read that correct, every single product is segmented into its own unique ad group. Though, at first glance, this may seem like a novel idea, this approach is riddled with several issues and limitations.

Those issues and limitations only grow even more overwhelming as you scale up in the size of your inventory. Imagine you are a merchant who advertises hundreds of thousands of individual products – that means you would need hundreds of thousands of unique ad groups to house them.

Nightmare #1: Staggering Numbers

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Here’s a little bit of math to put the above in perspective:

300,000 Products Eligible for Google Shopping + 20,000 Ad Groups Maximum Per Shopping Campaign

=

15 Total Shopping Campaigns WITH 20,0000 Ad Groups Each

=

300,000 Products Spread Across 15 Campaigns!

Now just consider the 15 campaigns which means 15 separate potential campaign-level settings and optimizations including daily budgets, ad schedules, location targeting, device modifiers, RLSA audiences.

Nightmare #2: Setting Up

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Barring having just a handful of products to sell, (BUT THERE’S STILL A MUCH BETTER WAY THAN SPAG) to put it simply, there is absolutely no easy way to go about setting up a SPAG set of Google Shopping campaigns.

Just so you can understand the time and effort that would go into doing this manually in Google Ads, I literally timed myself setting up one campaign and got through building two single product ad groups.

Using the example of our 300,000 products (and only in a perfect world):

Setup Time Clocked (1)Campaign (1)Ad Group = Approximately 1.5 minutes

Setup Time Clocked (1)Ad Group Subsequent = Approximately 1 minute

18,000 Remaining Ad Groups @ approx. 1 minute Setup Each

=

Approximately 300 Hours Total Setup Time for One Full Campaign!

Now this, again, is all relative to how many products you are trying to set up. Even someone only selling a few hundred products is looking at a few hours spent setting up a structure that is outclassed by other approaches anyway.

Nightmare #3: Managing Bids & Negative Keywords

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If it wasn’t already a daunting task to manage hundreds of thousands of products, now imagine having to analyze and adjust Max CPC bids for them.

Yes, there are automated bidding tools in Google Ads you can leverage such as Enhanced CPC or Target ROAS but that’s about as far as you can go, and you’d essentially be sticking with a “set it and forget it” mindset – a proven bad practice for Google Shopping.

Using our example, either way you look at it, you still have 20,000 products to adjust in one campaign, and then 14 more campaigns to cycle through after you’re done with the first.

Even if you were to use AdWords editor, direct to Google Ads file imports, or just simple Google Ads filters to help speed things up, you’re still talking about hours upon hours of bid adjustments (I mean just imagine trying to that in an Excel file).

Then there’s Negative Keywords. Now, the “dark” beauty about SPAG is that it allows one to set up product-specific negative keywords since each ad group contains one product.

But, what does that entail?

  • Piecing through each ad group’s search query report
  • Attempting to do the same in Google Analytics
  • Compiling a group of acceptable negative keywords (there could be 100’s of search terms!)
  • Ensuring that the proper match type is applied to each negative (Broad, Phrase, Exact)
  • Uploading that in some way to Google and ensuring its set to the correct Ad Group

Five steps which, in total, could range in time to fully implement: anyway from a few seconds to several minutes or more.

Now, do that 20,000 times, 15 times over.

Nightmare #4: The Law of Diminishing Returns (and Negative Returns)

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A concept taught in economics, the Law of Diminishing Returns often reads:

“If one input in the production of a commodity is increased while all other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.”

My economics professor liked to use eating your favorite slice of pizza as a perfect example to describe diminishing returns. Essentially, the increasing input is the number of bites you take, while the fixed input is you.

That very first bite of your favorite slice of pizza will always be the best. However, each subsequent bite thereafter diminishes in its value (flavor). In other words, every bite after your first is (conceptually speaking) increasingly less tasty than the previous.

But, how do you translate this to managing SPAG in Google Shopping? Well, just substitute for what we know:

One Input in the Production of a Commodity is Increased -> # of Campaigns, Ad Groups, Products, etc.

+

All Other Inputs are Held Fixed -> 1 Person Managing Campaigns

=

The Point at which the yield or return diminishes -> ROI, ROAS, Sales, etc.

It’s important to note that Part 1 of this equation has an underlying “compounding effect” because there’s a virtually endless number of elements to consider for each campaign, ad group, product as well, such as negative keywords, device modifiers, location modifiers, ad metrics.

Now, there is also a very common “side-effect” nestled within the Law of Diminishing Returns known as Negative Returns. When applied to the same equation above, we are no longer seeing this as diminishing but instead now completely diminished.

Thus, per your investments (time, effort, energy, money), there is a very high probability to experience a negative return or loss.

Do note that this is still all conceptual and when applied, there is the assumption of “all other things being equal”. What that means is that beyond the “inputs” as translated in our equation above, everything else does not change.

But, as we all know, that is not at all true. All other things can and will change, only further adding to the potential for diminishing or negative returns.

Truth Be Told: There Are “Better” Ways

Right now, the question you should be asking yourself: “Is SPAG still the right choice for me?”

Not to turn the tables on you so quick, but honestly the answer may very well be “yes.” If you only advertise very few products (tens as opposed to hundreds), SPAG may still work for you although it will still be far more time consuming than other approaches.

You must be very careful if you wish to test it out. It is beyond important that you pay very close attention and look out for the point at which your return begins to diminish or slips to the negative.

I would implore you, however, to explore other more efficient options for Shopping campaign structure.

Want to learn more? Schedule a call with our team.

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Anthony Capetola

Written by Anthony Capetola

Tony is the Marketing Manager at Sales & Orders heading up our inbound marketing and advertising team. His latest adventure, though? Being a dad!

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