AMBASSADOR MARKETING

Smart Shopping Campaigns: How to Optimize for ROAS (2025 Update)

Over 80% of businesses turn to Google for their pay-per-click (PPC) campaigns. And a whopping 85.3% of all PPC clicks go to Shopping Ads.

That means Google is the place to be for running ads for products.

Smart Shopping Ads were Google’s automated shopping campaigns offering that did most of the work on its own.

Today, those ads are called Performance Max.

These ads don’t afford the level of control that Standard shopping campaigns do.

Still, there are many ways to optimize and achieve the ideal return on ad spend (ROAS) for your campaign.

That’s exactly what we’ll cover in this article!

TL;DR

Google officially replaced Smart Shopping campaigns with Performance Max (PMax) in 2022.

While Smart Shopping focused on automated bidding using product feeds, PMax goes further, covering Search, Display, YouTube, Gmail, Discover, and Maps, and adds audience signals, asset groups, and more advanced automation.

Here are ways to optimize PMax for higher ROAS:

• Optimize product titles/descriptions using structured, keyword-rich data.
• Organize your feed with custom labels (e.g., high-margin, seasonal).
• Use high-quality lifestyle images–they can increase conversions by up to 40%.
• Exclude underperforming SKUs to focus the budget on high-ROAS products.
• Add audience signals to help Google’s AI target better.
• Create focused asset groups by product type or intent (stick to 3–5 per campaign).
• Avoid campaign overlap–duplicate listings split performance and inflate CPA.
• Enrich product feeds with promos, reviews, and shipping details.

What Is a Smart Shopping Campaign?

Smart Shopping campaigns were an automated campaign subtype within Google Ads designed to simplify product advertising and maximize conversion value.

Unlike Standard Ads campaigns that require manual adjustments, these campaigns used Google's machine learning to automatically manage bidding and ad placements across various networks, including Google Search, the Google Display Network, YouTube, and Gmail.

It pulled product data from an advertiser's Google Merchant Center feed, Smart Shopping campaigns dynamically generated and optimized ads to reach customers most likely to convert, saving advertisers significant time on manual campaign management.

Smart Shopping Ads have been replaced with what is now called Performance Max by Google, which is essentially the same thing but expanded to include even more capabilities.

What Happened to Smart Shopping Campaigns?

In 2022, Google officially phased out Smart Shopping campaigns and replaced them with Performance Max (PMax) Ads.

At the time, all existing Google Smart Shopping setups were automatically upgraded to Performance Max, which is a more advanced campaign type under Smart Shopping’s legacy.

Advertisers received new PMax campaigns in their accounts with all historical data, budgets, and asset combinations carried over.

Transitioning was seamless in theory, as the core concept behind the campaign type was the same.

However, PMax introduced asset groups, deeper campaign structure, and expansive ad formats across video, Google Display Network, and YouTube.

Early indicators show that thousands of advertisers embraced the change. By September 2022, about two-thirds of Smart Shopping users had fully transitioned to PMax

Smart Shopping vs. Performance Max

Smart Shopping campaigns and PMax both rely on automated bidding, product feed optimization, and machine learning; however, PMax offers additional capabilities and nuances in running automated ads.

For instance, unlike in Smart Shopping, PMax integrates ads with display ads, video ads, Gmail, Search, Discover, and Maps.

It essentially expanded the scope of automated bidding and advertising by integrating all of Google’s various platforms and advertising avenues.

It also modified some existing features and introduced new ones.

For example, the so-called Ad extensions in Smart Shopping campaigns were replaced by assets and asset groups. The most significant addition was the inclusion of audience signals, which is where you provide some context about who should be seeing your ads.

PMax relies heavily on audience signals and campaign structure. On the other hand, Smart Shopping solely focused on product feed and bidding strategy.

Like Shopping Ads, PMax still uses target ROAS and max conversion value as bidding strategies.

However, advertisers can also provide custom labels, product attributes, and asset groups to guide optimization across placements.

PMax brought significant improvements for advertisers from the get-go. Early statistics showed increased conversions and lower cost per acquisition (CPA) for advertisers. A finance company, MoneyMe, saw its conversions increase by 22% and CPA drop by 20%.

As of 2025, Google has introduced many new features in PMax that have made it even more powerful than when it was first introduced as the successor to Smart Shopping ads.

Here’s a table that shows the differences between Smart Shopping and Performance Max Ads.

8 Ways to Optimize Smart Shopping Campaigns (now PMax) for High ROAS

Now that you fully understand what Smart Shopping has become (PMax), let’s get to the tactics you can use to optimize for high ROAS, using some old and then some of the new features PMax has to offer.

These strategies are pretty much the same as those you’d adopt for standard Google Shopping campaigns. Here we go:

1. Optimize Product Titles and Descriptions

Well-crafted product titles and accurate descriptions are foundational for PMax. They serve as the primary “keywords,” as they guide Google’s algorithm and influence CTR, conversion rate, and, of course, ROAS.

A study by Search Engine Land showed just how impactful product titles can be. It was found that products with optimized titles experienced an 18% increase in CTR.

Here’s what to keep in mind when writing titles that convert:

• Front-load important attributes (brand, category, size, color); Google weights the first 70 characters most heavily.
• Aim for 75–100 characters–long enough to capture intent, short enough to avoid truncation.
• Use numerals (e.g., “2 TB”, not “two terabytes”) and capitalize consistently.
• Avoid promotional fluff like “best price.”

Descriptions also play a similar role, though not directly. They support clarity and help include search-relevant strings.

Companies that added structured, keyword-rich descriptions see quality feed improvements and higher ad relevance. Good descriptions are also crucial for conversion when a user clicks on an ad and arrives on the product page to make a purchase.

Pro Tip: Use a feed tool (e.g., DataFeedWatch, Channable, Feedonomics) to apply rules dynamically, like adding brand names or SKUs to underperforming products. After lifting feed quality, retest campaign performance.

Take this ad as an example:

This fits a PMax campaign because it uses:

• Benefit-first structure: It leads with clear, valuable outcomes (“fast, reliable Wi-Fi”), exactly what users care about. PMax prioritizes assets that surface the value prop early.
• Short, scannable sentences: 2 short lines, 17 and 10 words. PMax uses text assets across many surfaces (search, display, YouTube, Gmail), where brevity and clarity win. Long-winded copy tends to get truncated or ignored.
• Natural language & relevance:

“Wi-Fi” repeats naturally, reinforcing the core product term for Google’s AI to latch onto.
“At home” aligns with common search intent (“best wifi for home”), helping PMax match to relevant queries.

• Soft brand positioning: “Made with your home in mind” subtly implies thoughtful design and relevance without hard-selling. PMax favors this kind of natural, contextual language that improves conversion without sounding like an ad.
• Versatility across placements: This copy can flex across formats: in-feed (Gmail, Display), below a YouTube video, or as a headline + description combo. That versatility improves asset performance in PMax’s testing cycles.

2. Optimize Product Categories & Feed Organization with Custom Labels

Organization in your product feed sets the stage for campaign-level targeting and bidding. PMax uses product types, custom labels, and product categories to segment asset groups and tailor smart bidding.

A well-organized feed using product-type mapping and custom labels can improve campaign ROI, thanks to more precise targeting and budget allocation.

Custom labels allow you to organize your product feed further. Merchant Center allows up to five custom labels. Marketers typically use them for segments such as seasonal, high-margin, clearance, best-sellers, or price buckets.

One ecommerce brand separated SKUs into “high-margin,” “mid‑margin,” and “low margin” using custom_label_0 based on historical conversion values. They ran three Performance Max campaigns with tiered target ROAS goals, resulting in a 96% increase in ROAS for high-margin or bestselling products.

3. Use High-Quality, Optimized Product Images

Strong visuals drive performance in PMax campaigns (or really any kind of Shopping campaigns). High-quality images and lifestyle visuals work within asset groups, and they directly impact CTR and conversion rate. For instance, product pages with high-resolution, zoomable images see up to 40 % higher conversion rates compared to basic images.

Buyers will have more confidence in purchasing a product with high-quality images that accurately represent what the product looks like. That confidence translates into real ROAS gains when these images feed into Google Merchant Center and smart bidding processes in PMax.

Google’s best practices recommend at least four horizontal marketing and square marketing images per asset group, with dimensions of up to 1200×628 pixels for horizontal images and 1200×1200 pixels for square images.

You can also try A/B testing image styles (e.g., product-only vs lifestyle) to check the differences in conversion rate and ROAS.

4. Prioritize High-Performing SKUs and Exclude Underperforming Ones

Focusing spend on high-ROAS SKUs can have a big impact on PMax campaign results. PMax pools your product feed and adjusts automatic bidding across asset groups. That said, you still get control by choosing which SKUs stay active in your campaigns and which you exclude.

Eliminating “zombie” SKUs, products bringing high cost per conversion and low conversion value, can reduce average CPA significantly without sacrificing scale.

Tools such as DataFeedWatch or Feedonomics enable rules-based automation, allowing you to tag or exclude items based on conversion rates, margins, or inventory age. This makes it easy to shape your product feed and help smart bidding systems focus where returns are highest.

Run a weekly SKU-performance export from Google Merchant Center. Add a column showing conversion value ÷ cost over the past 30 days. Tag SKUs below the target ROAS threshold and test excluding them in asset groups. You’ll often see overall campaign ROAS rise, even if overall conversion volume dips slightly.

And here’s a hands-on guide to understand your SKU performance:

It all comes down to the simple fact that many brands generate 80% of their revenue from just 20% of their products. In other words, you need to focus on those best-selling SKUs to see a higher ROAS in PMax campaigns.

Explore our free ROAS calculator!

5. Leverage Audience Signals

Audience signals give your Performance Max campaign direction. They act as hints for Google’s machine learning, steering smart bidding and asset group placement. Although optional, adding first-party data and in‑market segments can significantly improve conversion performance.

Google reports that advertisers using Customer Match within PMax saw a 5.3 % uplift in conversions.

Here’s  what a marketer on a PPC thread on Reddit says about audience signals:

“Always include audience signals for P-Max, otherwise, you're targeting randomly across display, discovery, and video ads.”

To set this up, upload top-tier customer lists, website visitors, and in-market segments. For example, “in-market: apparel” or “custom keyword segment of best‑selling products.” Ideally, assign one precise audience per asset group (demographic or custom signals), so that each creative pack is optimized with matching search themes and visuals.

Example: a running shoe retailer uses segments for “abandoned cart,” “previous purchasers,” and “in‑market sports gear” in separate asset groups, pairing each with tailored visuals and copy.

Tools like Google Ads, DataFeedWatch, and Optmyzr make it easy to manage and refresh audiences and feed those signals into PMax.

6. Use Asset Groups Wisely

Asset groups are the heart of Performance Max. Smart bidding aligns your product feed, images, audience signals, and text assets inside each asset group, and campaign structure matters.

Industry data indicate that campaigns with separate asset groups per theme or category tend to outperform those with mixed-group setups. An Optmyzr study found that single-asset group campaigns often deliver a stronger return on ad spend than those with too many mixed groups.

Google recommends starting with 3–5 asset groups per campaign to strike a balance between variety and budget allocation. Each asset group should center around a clear theme, such as product type or audience intent.

For example, a footwear store might separate men’s running shoes, women’s casual shoes, and kids’ sneakers into different categories. Clear segmentation helps machine learning match the right audience with the right assets, thereby boosting conversions.

On top of that, Google Ads’ asset group reporting lets you see real‑time performance on headlines, images, and videos inside each group.

Here are some asset usage best practices:

• Group assets and listing groups by product category or intent.
• Link a unique audience signal to each asset group.
• Use asset performance labels (“low”, “good”, “best”) to identify creative gaps.
• Limit to five asset groups to avoid budget dilution.
• Regularly refresh low-performing assets or swap in fresh headlines or videos.

Pro tip: Build campaigns with just one asset group for granular control. Then you can pause entire campaigns easily, without losing cross-group momentum, and continue smart bidding performance with clear asset-level insights.

7. Avoid Overlapping Campaigns

When Performance Max and Standard or search campaigns target the same products, internal competition can occur. It’s best not to run multiple PMax and Standard shopping campaigns for the same products.

This can be challenging to accomplish when you have a large product feed and you want to try running both types of campaigns for the same category of products (if not the same ones).

Again, technology can come to the rescue. Optmyzr provides a process for auditing overlapping SKUs across Standard shopping and PMax campaigns using product ID comparisons. The tool flags duplicates and recommends consolidating product-themed campaign structures.

Google Ads auction logic now prevents PMax from always taking precedence over standard shopping campaigns. Today, ad rank determines which campaign shows for overlapping products. Because of this, duplicate listings fight for visibility, not profit.

Experts recommend simplifying campaign overlap by:

• Segmenting campaigns by conversion goals or geographic locations to minimize overlap.
• Assigning unique audience signals or conversion actions per campaign.
• Adding negative keywords at the account level for PMax to prevent cannibalization of branded or high-performing terms.

Here’s another strategy from a Reddit user that’s based on historic ROAS:

“I would suggest you to identify ROAS buckets based on the past performance of the SKUs. For example if 30 SKUs have been achieving a ROAS of 200% in last 30-45 days then put them all under one campaign. Likewise you can define as many buckets as you want but make sure the skus are unique in all the campaigns. Also keep in mind about the search volume. If the products do not have search volume there will be no point in creating a new campaign for them.”

8. Enrich Your Data Feed with Promotions, Ratings, Shipping Info

Adding optional fields, such as promotions, product ratings, and shipping details, to your Merchant Center feed provides Google with more context. Smart bidding and Google Shopping Ads respond better when your product data is complete and relevant.

Promotions, such as percent‑off offers or free shipping, display as “special offer” links on ads and listings. And they can make a big impact on key metrics. For instance, one advertiser who implemented these changes saw a 13% increase in ROAS, accompanied by a 25% drop in CPA.

Besides promotions, adding ratings can also be great for CTR and ROAS. Product ratings act as trust signals. Industry research shows that listings with 50 or more reviews can drive a 4.6% conversion rate increase.

Similarly, accurate shipping info matters. Users abandon carts when shipping costs or times are unclear. Include detailed shipping attributes, such as cost, speed, and delivery region, to prevent disapproval.

Tools like DataFeedWatch and Feedonomics make it easy to add these optional fields. They let you set feed rules for promotions, bulk upload review data, and define shipping attributes by country or product type.

What Should Be the Target ROAS for PMax Campaigns?

Smarter Ecommerce data reveals that 78% of PMax campaigns use target ­ROAS bidding, and 84% hit or exceed those targets.

Determining the right target ROAS is crucial for campaign performance. Advertisers who aim for a target that’s realistic in relation to current results, and then gradually scale it, see better outcomes. Setting it too high from the get-go may actually limit your reach.

Experts suggest setting a target ROAS near your historical campaign average, not far above it. For example, if your average ROAS is 300%, start your target around 350% and increase it slowly.

According to BrightBid, a good target ROAS is at least 400% ( 4:1).

Use the campaign "avg. target ROAS" column in Google Ads to monitor actual vs. target performance weekly. If the average target ROAS consistently falls below goals, consider reducing your target by 10% until PMax meets it. If the target is met and the conversion volume is good, try increasing it by 10–20% and monitor the results over the next 2–3 conversion cycles.

Yes, Smart Shopping Is Dead, But the Strategy Isn’t!

Smart Shopping in Google Ads is long gone. Now, you actually have something even better in the form of Performance Max. However, many of the best practices, like product information optimization and exclusion of low-performing SKUs, have carried over.

PMax also gives you more optimization opportunities with audience signals and assets. Technically, Google is automatically putting out ads for you via PMax campaigns, but your optimization efforts can make a big difference.

Of course, it takes time and patience to learn all these things and execute that perfect PMax campaign that exceeds ROAS targets. But there’s a workaround to that in the form of a professional agency.

Discover the top Google Ads agencies to set up, manage, and optimize PMax campaigns for your brand!

FAQs

Is Smart Shopping still available?

Smart Shopping campaigns were fully phased out in 2022 and are no longer available. They were replaced with Google Performance Max Ads, which are based on the same idea but offer more features and cover all of Google’s platforms.

Are Google Shopping ads worth it?

Yes. Google Shopping ads consistently outperform other formats. Store Growers reports an average Shopping conversion rate of 1.91%, which is approximately double that of standard Google Ads, and a cost per action of around $38.87. These stats show that well-structured shopping campaigns can offer strong conversion performance and ROAS.

What’s automatically optimized with a smart shopping / PMax campaign?

Campaign elements, such as bidding, placements, budget allocation, and creative combinations, are all automatically optimized. PMax uses smart bidding, real-time audience targeting, and asset group mix to reach high-intent users across Search, display, YouTube, Gmail, and Maps. It dynamically adjusts bids at auction time by factoring in device, location, time, and creative performance.

How do you create a Smart Shopping campaign?

You can't create new Smart Shopping campaigns anymore. You can launch an equivalent smart campaign type under Performance Max Ads. Here’s how you can do it:

1. Link your Google Merchant Center product feed.
2. In Google Ads, create a new Performance Max campaign with the goal "maximize conversion value" or target ROAS.
3. Upload optimized asset groups: titles, descriptions, high-quality images, and optional video.
4. Add audience signals (first-party lists, in-market segments).
5. Set your budget and choose a bidding strategy (target ROAS or max conversion value). Google Ads will handle automatic bidding, placement across its networks, and conversion tracking once set up correctly. You can use a paid media agency to set up Google Shopping Ads for your business.