Google Shopping can be overwhelming and something as seemingly simple as deciding your budget can be half the battle. 

Here's what we suggest in terms of budget allocation, A/B testing your budget, how your industry affects your budget, and how you can use your Google Ads data to make informed decisions.

You can bid from as little as a penny, and with no minimum daily budget, it at first seems wise to keep your spending to a minimum. However, managing the budget isn’t an easy task: on one hand, if you’re spending too little, you’re effectively underbidding for your products and reducing your visibility. On the other hand, you risk overbidding and wasting ad spend on products that may not convert highly.

Check out the ultimate guide to Google Shopping

If you’re struggling to get started or looking for a restructure, we’ve put together a few pieces of advice for pinpointing your ideal Google Shopping budget.

Allocating your Google Shopping budget

Take some time to work out which of your products are performing well, using factors such as conversion rate, average order value and ROAS. Similarly, look out for products with poor impressions, as well as those winning a lot of traffic but which bear a poor conversion rate. You should cut back on funding for products that fall into these categories as they could be jeopardizing your ad spend.

A/B testing your budget

A bit like how you might A/B test a new text advert, running similar campaigns with different bid prices can help you to see which bid prices are being optimised and are bringing you the best ROAS. 

What we have seen works best is to monitor your campaign results, then test and test again. Try testing specific products and categories by putting them in their own campaigns. Generally, your budget will depend on the size of your business, your goals, and what industry you’re competing in.

Google Shopping budget by industry

To really stand out amongst your competitors, it may be worth researching average spending habits in your industry. 

American research shows that retailers in the health and beauty industry have an average monthly budget on Google Shopping of nearly $2,000, towering above other sectors. This is followed by retailers in computers and technology, and climate control at approximately $1,500 and $1,100 respectively. 

Meanwhile here in the UK, our own research finds retailers in the fashion, home and garden, and media industries have a far greater average budget than in others. However, that’s not to say that only the biggest retailers can win the best traffic – use your budget wisely, and you can drive more consumers with greater purchase intent your way.

Using your Google Ads data

If you’re using Google Smart Shopping, it’s a complete data ‘black box’. Without access to your own data to be able to make informed decisions, determining your ad spend can be even more difficult. Information including which bid prices are working best, and for which product or group are unfortunately hidden, enabling Google to maintain the upper hand.

Update: Google has retired Smart Shopping campaigns and has replaced them with Performance Max campaigns. Get up-to-date information on Performance Max here.

Bidnamic’s technology automatically distributes ad spend based on hundreds of different factors using AI technology. However, for those bidding manually, we thought we’d pitch in some advice on what works best. 

Research has shown that most retailers spend 40-60% of their marketing budget on advertising, whether that’s on Google Shopping or Facebook. Sadly, there’s no ‘right’ budget, but a little research will help you create a target for your business.

For more tips on optimising Google Shopping, explore our resources page.

If you’re interested in learning how to intelligently allocate your budget, book a demo with one of our Google Shopping Specialists today.

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