Google Ads for Ecommerce

How does Google Ads work for ecommerce stores?

Google Ads for ecommerce works by matching your product feed to shoppers’ searches and showing your product image, price and store name in Shopping results, across Google Search, the Shopping tab and other Google surfaces. You pay per click, and the feed in Google Merchant Center decides which searches each product can appear for.

There are three moving parts:

1. Merchant Center. Your product data lives here: titles, prices, images, GTINs, availability and shipping. Google requires products to be added here and linked to your Google Ads account before Shopping ads can run.
2. Campaigns. Standard Shopping, Performance Max and Search campaigns decide how much you bid and where ads appear.
3. Tracking. Purchase conversions with order values, so Google can bid towards revenue instead of clicks.

The same feed also powers free listings, which show your products in Google’s Shopping results at no cost. If your store isn’t in Merchant Center yet, that’s free visibility you’re missing before spending anything on ads. Our ecommerce SEO work covers the free listings side.

Should you run Standard Shopping or Performance Max?

Most stores do best with a mix: Performance Max for broad reach on proven products, and Standard Shopping where you want tight control over which products get budget and which searches they show for. Google’s current rule is that when both campaign types target the same products with overlapping settings, the one with the higher Ad Rank serves.

	Standard Shopping	Performance Max
Where ads show	Shopping ads on Google Search, the Shopping tab and partners	Search, Shopping, YouTube, Display, Discover, Gmail and Maps from one campaign
Control	Product-level bids, priorities, detailed negative keywords	Asset groups, search themes, brand exclusions and negative keywords; more automated
Data needed	Works on low conversion volume	Works best with steady purchase data
Best for	Testing new products, protecting margin on low-margin items	Scaling best-sellers once tracking is solid
Watch out for	More manual work	Budget drifting to brand searches or cheap placements if not checked

Two practical points. First, protect your brand traffic: people searching your store name would often buy anyway, so check how much Performance Max spend goes to brand searches and use brand exclusions where it’s inflating results. Second, Google prioritises a Search campaign over Performance Max when its exact match keyword matches the query, so exact match Search campaigns are still useful for your highest-value product searches.

Don’t put every product in one campaign with one target. A $15 accessory and a $900 appliance need different targets, and a single campaign will push budget to whichever is easiest to sell, not the most profitable.

Why does Merchant Center feed quality decide your results?

Feed quality decides which searches your products appear for, how often they’re approved, and how well they compete. A product titled “Model X200 Black” will struggle against one titled “Brand X200 Cordless Stick Vacuum, 45 min Runtime, Black”, because Google matches searches to the feed, not to your product page copy alone.

The fixes that matter most:

• Titles. Lead with what the product is and the words people search: brand, product type, key attribute (size, colour, material, model).
• GTINs. Google recommends submitting the GTIN for every product that has one from the manufacturer, and products with missing or incorrect GTINs may get limited visibility or be disapproved. Store-brand items without GTINs don’t need one.
• Price and availability match. Google requires the feed price and currency to match your landing page and checkout. Sales that end on the site but not in the feed are a common cause of disapprovals.
• Images. A clean, unobstructed view of the product. Google’s image rules don’t allow promotional text such as “Free shipping”, calls to action, watermarks or borders on the main image.
• Product type and custom labels. Use these to group products by margin, season or best-seller status, so campaigns can be split by profit rather than by your site’s menu.

Check Merchant Center diagnostics weekly. A single feed sync problem can quietly disapprove hundreds of products, and spend shifts to whatever is left.

What ROAS do you need to break even?

Your break-even ROAS is 1 divided by your margin after product cost, shipping you absorb, payment fees and other per-order costs. A product with a 30% margin breaks even at a ROAS of about 3.3. Anything below that loses money on the first order, however good the revenue looks.

The GST trap is specific to Australian stores. Google requires Australian feed prices to include GST, and many store tracking setups pass the order total including GST as the conversion value. Google also bills ad spend with 10% GST added on Australian invoices, which GST-registered businesses can usually claim back. If your reported revenue includes GST but your costs don’t, ROAS looks about 10% better than it really is.

Worked example (hypothetical, for illustration):

	Amount
Shelf price including GST	$110.00
Revenue excluding GST	$100.00
Cost of goods	$50.00
Shipping you absorb and packaging	$10.00
Payment and platform fees (~3%)	$3.30
Contribution before ads	$36.70
Margin on ex-GST revenue	36.7%
Break-even ROAS on ex-GST revenue	~2.7
Break-even ROAS if conversion value includes GST	~3.0

Set your ROAS targets on the same basis as your conversion values. If you’re unsure whether your values include GST or shipping, compare a week of Google Ads conversion values against your store’s order report. For how GST appears on Google’s invoices, see our Google Ads Perth page.

Repeat purchase changes the maths. A store selling consumables like coffee, pet food or skincare can accept a lower first-order ROAS if customers come back. Just make that a deliberate decision, based on your actual repeat rate.

What do Australian stores need to get right in Merchant Center?

Australian stores need GST-inclusive prices in the feed, shipping costs set in Merchant Center, and website pricing that meets Australian Consumer Law. Each of these is a common reason for disapprovals or for clicks that don’t convert.

Requirement	What it means	Source of the rule
GST-inclusive prices	Australian product prices must include GST, matching the landing page and checkout	Google Merchant Center price [price] specification
Shipping costs	Australia is on Google’s list of countries where shipping costs are required for Shopping ads and free listings; set them in account shipping settings	Google Merchant Center shipping [shipping] specification
AUD currency	The price must be in the target country’s currency on your landing page and checkout	Google Merchant Center price specification
Total price on your site	Where you show a part price, the total price must also be shown as a single figure, as prominently, including GST; optional charges like delivery don’t need to be included	business.gov.au guidance on displaying prices

This is a plain-English summary, not legal advice.

Shipping deserves extra thought in Australia. Delivery to Perth, Darwin or regional Queensland can cost far more and take longer than metro east coast delivery. If your Merchant Center shipping settings show one flat rate but checkout charges more for WA postcodes, shoppers drop off at checkout and Google may flag a mismatch. Set shipping by region or postcode where your rates differ, and show realistic delivery times. A WA store with fast local delivery can turn that into an advantage against east coast competitors.

Free shipping thresholds also affect ad profit. If most orders sit just under the threshold, you’re paying for shipping on few orders. If they sit just over, your shipping cost belongs in the break-even maths above.

How much should an ecommerce store spend on Google Ads?

Spend enough for each campaign to collect steady purchase data every week, because automated bidding learns from conversions, not clicks. For many small Australian stores that means $1,500–$5,000 a month in ad spend, focused on proven products first. Management is separate, typically $500–$1,500 a month, or 10–20% of spend.

Store stage	Typical starting setup
New store, few sales	Free listings, Standard Shopping on best-margin products, brand Search campaign
Steady sales, solid tracking	Performance Max on proven products, Standard Shopping for tests and low-margin items
Large catalogue, multiple categories	Campaigns split by margin and category, with separate targets for each

Expect 4–8 weeks before automated bidding settles. Products can appear within hours to a few days of linking Merchant Center, but the first month is mostly about fixing feed issues, confirming tracking and finding which products sell at a profit. Google controls the auction, so no one can promise a ROAS before the data exists.

Ads and SEO work together for stores. Ads give you fast sales data on which products and searches convert, and that data shows which category pages are worth ranking organically. See our ecommerce SEO and SEO pricing pages for the organic side, or read about how we work.

Want to know where your store’s ad spend and organic visibility are leaking? Get a free audit.