How to Segment Your Products in Google Ads for Maximum ROI

One of the most effective ways to scale your eCommerce brand with Google Ads is through proper segmentation of your product categories. This approach enables you to allocate your budget more efficiently, focusing on high-performing products while optimizing underperforming ones.

In this blog post, I'll guide you through the essential principles and step-by-step process to segment your products for Google Shopping and Performance Max campaigns.

Why Segment Your Products?

Proper segmentation allows you to:

• Maximize Budget Efficiency: Spend more on high-performing product categories.
• Optimize Underperformers: Limit spending on low-performing products while working on their optimization.
• Tailor ROAS/CPA Goals: Apply different target ROAS or CPA goals based on product profit margins.

Core Principles of Product Segmentation

Before diving into the step-by-step process, it's crucial to understand three core principles of product segmentation in Google Ads:

1. Align Campaign Structure with Website Structure
2. Maintain Search Term and Product Relevance
3. Avoid Over-Segmenting Campaigns

1. Align Campaign Structure with Website Structure

As Google Ads increasingly incorporates automated strategies and AI technology, having a campaign structure that mirrors your website structure is key to success. A well-organized website structure allows for precise URL exclusions, enabling campaigns to focus on specific product categories.

Example:

• Single Product Category: For an eCommerce brand with a single product category, such as "Ems for Kids," the campaign structure is straightforward.
• Multiple Product Categories: For a brand like "The Iconic," which has various categories, the campaign structure should reflect each category, allowing for targeted budget allocation and optimization.

2. Maintain Search Term and Product Relevance

The golden rule of eCommerce in Google Ads is to ensure highly relevant product titles lead to equally relevant landing pages. Ideally, each campaign should target unique keywords, audiences, and locations to avoid overlap and competition between campaigns.

Key Points:

• Single Campaign Targeting: Typically, one campaign should target specific keywords. However, in some cases, separate campaigns might be necessary for different stages of the funnel (e.g., top-of-funnel vs. bottom-of-funnel targeting).
• Handling Underperforming Variations: Instead of creating separate campaigns for underperforming product variations, manage them within the same campaign using negative keywords or segmenting within asset groups. For instance, add "blue leather" as a negative keyword to other ad groups if the "blue leather wallet" is underperforming.

3. Avoid Over-Segmenting Campaigns

Over-segmentation can be counterproductive, especially for eCommerce brands with a limited inventory. Simplified structures often yield better results.

Example:

• Small Inventory: An eCommerce brand with a single product category and three product variations might perform best with one campaign and three ad or asset groups. Despite different products, they fall under the same core search theme, making a simple structure more effective.

Many brands mistakenly believe that complex strategies with multiple campaigns and varied ROAS goals are the key to success. However, segmentation should be a scaling strategy applied only once your products are already performing well on Google Ads. If your products are not selling, reevaluate your pricing, policies, or landing pages.

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Step-by-Step Process for Segmenting Your Products

Now that you understand the core principles, let's move on to the step-by-step process for segmenting your products in Google Ads:

1. Analyze Your Website Structure: Ensure your website structure is logical and well-organized. This will guide your campaign structure.
2. Identify High and Low-Performing Products: Use performance data to distinguish between high-performing and low-performing products.
3. Create Campaigns Reflecting Product Categories: Align your Google Ads campaigns with your product categories as per your website structure.
4. Use Negative Keywords for Segmentation: Within shopping campaigns, apply negative keywords to direct traffic to specific ad groups for underperforming products.
5. Optimize Asset Groups in Performance Max: Break underperforming variations into their own asset groups with tailored ad copies and images. Monitor and adjust based on performance.
6. Test and Adjust: Continuously test different segmentations and adjust based on performance metrics to ensure optimal results.

Conclusion

Segmenting your products in Google Ads is a strategic way to scale your eCommerce brand. By aligning your campaign structure with your website structure, maintaining search term and product relevance, and avoiding over-segmentation, you can maximize your advertising budget and drive better results. Remember, segmentation should enhance already successful campaigns, not compensate for underperformance.