How to prepare your Google Ads retail campaigns for holiday shopping

Join Google’s Ads Product Liaison Ginny Marvin as she sits down with Enric Durany, Group Product Manager for retail advertiser experiences. They unpack the actionable strategies retailers need to capture early Q4 demand and connect with shoppers as they’re discovering and researching gift ideas in new ways this holiday season.

Episode overview

How closely does your holiday campaign setup match the way people are actually shopping this year?

Shoppers aren’t just trying AI this season - they’re relying on it to discover, decide, and buy. As searches with terms like “ideas for”, “where should I”, and “which” grow, focusing only on the last click misses how they actually shop.

In this deep dive:

• Why capturing early shopper interest is a major opportunity for retailers, and how pairing Demand Gen with your Search, Shopping or Performance Max campaigns helps you drive discovery and sales simultaneously.
• How AI Max for Shopping uses text customization and Final URL Expansion to make ads more contextually relevant to a shopper’s unique intent.
• Setting up New Customer Acquisition and Loyalty program goals to reach high-value shoppers and highlight member benefits on product listing ads.
• Unlocking incremental holiday demand with Smart Bidding Exploration and dynamic budget pacing to capture shopping spikes throughout the season.

Want Ginny’s key takeaways and tips from this conversation? Subscribe to the Ads Decoded newsletter.

Additional resources

Explore the Rethink Retail hub

Watch the keynote and learn proven AI strategies to drive Q4 revenue

Transcript

Ginny: Welcome to a very special episode of Ads Decoded. We are coming fresh off Google’s Rethink Retail event here in New York City, and we are gonna be picking up on the announcements and themes we heard about today, diving deeper into the nuts and bolts to help advertisers and retailers set their campaigns up for success this holiday season.

I am very happy to be joined by Enric Duran, who is a group product manager for retail advertiser experiences. Welcome, Enric.

Enric: I’m a big fan of the podcast, so I’m super happy to be here.

Ginny: All right. So holiday is obviously a critical time where merchants are really focused on conversions, driving conversion value in-store, online. There’s obviously opportunity for brand discovery and that’s across Search, YouTube. We’re seeing and heard about the ways that consumers are interacting is changing, evolving across these platforms.

Why is it, would you say, important for merchants to be focused on the entire customer journey, including during the holiday season, and how can merchants ensure that they are best positioned to do so?

Enric: Speaking a little bit from experience, what I’ve heard from advertisers, I think one of the main pitfalls that I have seen is that some advertisers tend to go into the shopping season with this mindset of capturing that last click before the purchase. I think the issue with that is that this tends to have advertisers participate in auctions that are pretty crowded, very competitive, with rising costs.

And so, moreover, this also is a big mismatch with how consumers are looking for products. Queries are a lot more category-based or mid-funnel, things like best gifts for runners or stylish warm clothes for this winter season.

Think about a model where you can basically have your Performance Max campaign or your shopping campaigns to be able to capture that bottom end of the funnel, and then layer on top a Demand Gen campaign that can work a little bit more on discovery, inspiration, leverage all these more visual formats that can be displayed on YouTube Shorts, in-stream, or Discover.

And in that regard, something very actionable that I think retailers could do is add a product feed to the Demand Gen campaigns. Because this not only enables more retail-focused creative, but it also improves targeting, performance, and whatnot. Internally, what we’ve seen is that retailers that actually add the product feed to their Demand Gen campaigns see up to a 35% lift in conversion.

Ginny: And yes, and so driving from awareness to sale, having that full spectrum. And your merchant feed that you’re using in shopping or Performance Max, same feed works great for Demand Gen. Yeah. So there’s no extra lift you need to do on that side.

AI Max for Shopping is in open beta. So I just want to talk a little bit more about what makes AI Max for Shopping different. What are the benefits for advertisers? What is it designed to help advertisers accomplish?

Enric: You’re absolutely right. Now we are entering open beta for AI Max for Shopping. If it’s not available in your account, it will be available soon.

I think just to take a step back, if you look at what’s happening, especially with consumer behavior, is that especially in the onset of all these new AI-based surfaces, especially with AI Mode, AI Overviews, customers are issuing completely different sets of queries. They are searching more, but they are also searching for different things and in different ways. This also happens, for example, with visual search, where in Google Lens, for example, one in every five searches are actually of commercial nature.

And so historically, shopping campaigns, I think it has been a very effective product to drive bottom of the funnel performance. However, with this new shifting customer expectations and these new AI formats where we need to make the ads very, very contextually relevant, we are trying to modernize the product in a way in which advertisers can harness this AI-based performance.

And so AI Max for Shopping campaigns, very quickly explained, is just like a one-click toggle where you can enable essentially two features.

One is called text customization. The second one is called final URL expansion. What text customization does is that it uses your product feed as a seed to develop AI-performing creative. What this will do is, for starters, be able to tailor, for example, the product listing ad title to, for example, feature some of the properties of the product that might be very relevant for the context and for that query.

So there is one part, and then there is final URL expansion, which essentially will help select the best landing page on your side and the best format to serve that query. So for example, if there was a query which would be like a commercial query but with low product intent, like for example, best houseplant for beginners, then it might be the case that, for example, a text ad that leads to a categorical page that shows multiple plants is a better user experience than a product listing ad would be. Then final URL expansion will be able to find that page on your side and then build, for example, a text ad for it.

There’s also additional reports that we have added where you can see all the incremental queries that your ads are serving for. And there’s also a bunch of guardrails that we have added as well, for example, text exclusions, messaging restrictions, so that you can remain in control of the creative that is being generated.

Then final URL expansion is an optional feature that you can turn on or off at a campaign level, and that will essentially help you build those mid-funnel text ads that might perform well for those queries.

Ginny: Anything that practitioners need to keep in mind when enabling this for the holidays?

Enric: I would say if you have this available in your account, try it out ahead of the holidays, see how performance looks like. I think in this case, because we are building all these features around the feed, it’s very important that you have high-quality data in the feed. So feed quality continues to be very important for this.

Ginny: And if you are running Search campaigns as well as Shopping campaigns, anything to be cognizant of in testing AI Max for Shopping in those cases?

Enric: Yeah, it’s a good question as well. We have not changed any of the priority rules that exist today. So Search campaigns will continue to take precedence for exact matches, just like they do with Performance Max campaigns. So everything that applies between Search and Performance Max also applies between Search and Shopping campaigns with AI Max enabled.

Something that you could do is if you are worried about, or if you are trying to route branded traffic to specific campaigns, you can also choose to add brand exclusions to AI Max for Shopping to sort of avoid those branded searches to be routed into Shopping campaigns. That’s something you could totally do.

Ginny: Good tip. New customer acquisition, big focus often during the holidays. And as you mentioned, we often see cost for acquisitions spike in holidays when things are so competitive. How should retailers be thinking about ensuring that they’ve set up new customer acquisition goals to find new customers and make sure that they’re not accidentally spending money on existing customers?

Enric: What New Customer Acquisition and largely lifecycle goals enable you to do is sort of like value different audiences differently based on the objectives that you’re trying to drive and how valuable those audiences are for your business. This is now available in all campaign types, including Shopping campaigns.

You can also set up as a New Customer Only mode. And now I would also highlight that we have a new prospects mode where you can also set up new customer to essentially focus on audiences that have not interacted with your brand at all.

So there’s a few options for you to choose from. I think for all these options, things that I would highlight is, first, that data freshness is very important. And so make sure to upload your Customer Match audiences.

Second thing, install the new customer tag. And that also helps the algorithm become better and more precise at detecting new customers for your business. And then third, assign reasonable values for your business for those audiences. I also want to mention that just in this year, we launched over 20 different improvements in our new customer models. And so we have seen great increases in precision of new customer detection. So hopefully that will drive the performance that you’re wishing for.

Ginny: Very helpful to know. And it’s one of those kind of recurring themes I think we end up talking about is the backend updates that are always happening. And so just a reminder again that if you’ve tried something even a few months ago, there likely have been improvements. So never stop testing.

Loyalty in, I believe Performance Max and standard Shopping campaigns, aimed obviously at retaining your customers and giving you the flexibility to bid to different loyalty tiers within your loyalty program. Similar to NCA or New Customer Acquisition, loyalty bidding relies on Customer Match data.

Enric: Loyalty programs are super important for retailers. And so now what we have available is this end-to-end solution where on the one hand you can set up your benefits, the benefits that you offer to loyalty customers. This can be member price discounts. This can be free shipping discounts. And then once you have those uploaded, you can pair them with specific audiences.

So you can say, “Look, this audience segment has this member price discount. This other segment has this other member price discount.” And this will feature on the actual product listing ads. This is not only valuable for users to know, but it’s also a way for merchants to differentiate themselves in the PLA slate, which is always good.

Ginny: So what do merchants need to know about how to ensure they’ve got their segments for their loyalty programs available for messaging, setting up the right messages, and then being able to bid accordingly?

Enric: Sure. So let me just explain briefly what are the steps that merchants have to take to activate the loyalty retention goal. The first one is going to Merchant Center and setting up the loyalty benefits. This can be things like member pricing or free shipping, and you can do that in Merchant Center alongside the different tiers that are associated to those benefits.

Then second, you have to upload your Customer Match lists in Data Manager to match to those different tiers. And then finally, also in Google Ads, you would go and activate the goal for your campaigns. You can choose to just activate the goal, which will enable essentially showing those benefits to the users that we can recognize and that we can match.

Or you can also add optionally a multiplier for those audiences in case you want to assign an additional value to those audiences. Finally, there is the reporting piece. Assuming that you have done the first and second step, then the data will start showing up in the promotions report, in the audience report, and you will be able to see how your benefits and your audiences are performing.

Ginny: Okay, perfect. And we heard today about a new feature, Product Value Optimization in closed beta, so it may not be fully available for everyone perhaps for this holiday season, but an exciting development, I think, because we’ve often seen a challenge for merchants is being able to steer the system to prioritize certain types of products, whether that’s by margin or clearance status, or making sure that the system is prioritizing those certain products.

Enric: Absolutely. Very excited about this feature. Like you say, it’s in closed beta, but we’re working hard to bring it to all customers.

Just to explain a little bit like the problem that we’re trying to tackle here: I’ve heard personally many times advertisers explaining how there are main business goals, like for example driving purchase conversions, but there’s also a bunch of adjacent goals, like for example driving conversions for high-margin products or driving inventory clearance, amongst many others. Now, the issue is that in the past, in order for advertisers to orchestrate these goals, really the only option that they had was to essentially create separate campaigns.

And so Product Value Optimization is trying to tackle this problem by virtue of letting you set up these additional goals without having to change your campaigns. So how this works is, for a campaign, you can specify a set of rules for which you want to apply a value adjustment. And so once you have set up this value adjustment based on some of your product’s properties, like for example category, brand, or custom label, then this value adjustment is applied to that slice of products. And then this will, on the one hand, be taken into account before the click in the auction, so we will prioritize those products. And then after the click, it will also be reported in the Google Ads UI.

So you will be able to see the conversion value that this product drove, which will include both the value adjustment and the conversion value, but also see the original conversion value separately so you can see how that product is performing. So effectively with this solution, you are able to configure those additional business goals without having to change your campaigns or your product groups, which I think is like a pretty neat solution to a pretty complex problem.

Ginny: Okay. All right. AI Brief, we announced at Google Marketing Live. It’s continuing to roll out in being able to give merchants and advertisers just more ways to tell the system what kind of traffic is desirable, what traffic is less desirable.

In the meantime, text guidelines are also available in Performance Max, AI Max for Search, and with text exclusions, messaging restrictions, and those will then automatically roll into AI Brief when AI Brief becomes available in your accounts.

But in the meantime, I’m wondering what tips you have for merchants who want to use text customization in their campaigns for being able to quickly have holiday-tuned ads for the season in terms of having ads that are at scale and still adhering to their brand and business restrictions.

Enric: Something that we consider very important as we try to roll out all these very automated products to harness AI-based performance is doing so in a way that drives advertiser trust. And so one of the things that we normally hear about is that advertisers want more guardrails in terms of being able to steer Google AI to make sure that everything that gets generated adheres very strongly with brand guidelines.

And I think this is where AI Brief and also text guidelines come into play. On the one hand, there is AI Brief, which is essentially a conversational layer for you to be able to add those guidelines in a way that is more natural without having to fiddle with many controls that might be cumbersome to use and difficult to set up.

And then we have sort of the underlying control layer, which is what is today encompassed by text guidelines, and that you can add to essentially tell Google AI what you want your ads to sound like, what you want your ads to say or not say.

And in terms of some more tactical advice on how to use these features, I would say you can go and start looking at text exclusions, messaging restrictions. Make sure that those are set up in a way in which you feel that you have the right guardrails to use in your campaigns.

I think the flip side of that is that I would try to recommend not to be overly restrictive because the issue with that is that that might actually restrict your campaigns from serving on searches that might actually be incremental and high-performing for your business.

Ginny: And on the restrictions piece, I mean, there is something of a mindset shift here with thinking about how consumers are searching differently. They’re engaging on YouTube and then coming to search differently. And so thinking about what you might have restricted in the past might not be beneficial and conducive to the way that people are shopping, searching more broadly, longer, more sophisticated queries.

So, I just want to reinforce that thinking about customer behavior and how much that is changing probably this season more than any season in the past, I think, is something to be keeping in mind when you’re thinking about how you’re optimizing your campaigns.

Enric: Absolutely.

Ginny: I want to talk a little bit more about bidding, Smart Bidding Exploration for those using ROAS targets. I think there’s still quite a bit of confusion about what Smart Bidding Exploration actually does, how it works, and how it still maintains relevancy while giving some more flexibility to your targets.

Enric: Smart Bidding Exploration introduces a small control ROAS slack that ranges from 10% to 30%, and that can be configured by the advertiser. And this enables the Smart Bidding algorithm to explore new query spaces to drive that additional performance.

Through internal data and internal studies that we’ve run, we’ve seen that advertisers that use Smart Bidding Exploration on search to drive text ads campaigns saw up to a 27% lift in unique user conversions at a 10% ROAS slack, showing that exploring new query spaces can actually be very profitable for advertisers while still maintaining their efficiency.

Ginny: And one of the things I think is really interesting about this, and often not totally understood, is that it’s exploring still within the range of queries that you’re targeting, that your targeting is already qualified for this new set of exploration.

It’s just that you’re giving the system more flexibility to look outside, as you mentioned, the concentration of known knowns of queries. And so I think some people get nervous that they’re gonna be expanding outside of the kind of query bandwidth that they are looking to reach.

Enric: Yeah, that’s right. We’re working also to expand Smart Bidding Exploration to shopping traffic, and it will be available in Performance Max campaigns with a retail feed and also Shopping campaigns.

Ginny: Great. And there is reporting to help show that diversity expansion. That’s great.

Coming into holiday, budgets are set or targets are set in terms of where people want to be from an efficiency standpoint. The use of uncapped demand-led budgets gives campaigns that flexibility to find new pockets of opportunity, new conversions during this highly competitive holiday season.

And for those who are operating within a fixed budget, we have a new report called the Missed Opportunities Report. Can you talk more about what that can be used for and how people who are operating with budget limitations can find insights in that report?

Enric: The reality is that when you look at specific dates like Black Friday and Cyber Monday, demand can be 3x, 5x, 7x higher than on regular days. And so this is why we think that someone operating with a monthly budget can fall short of capturing all of that additional demand.

And this is where demand-led pacing can be a good tool for you to be able to capture that additional demand. So essentially, how demand-led budgets work is that you will still set up a monthly budget, but you will let Google adapt to spending more on days where there is more demand and then making up for that on days when there is less demand, while still attaining your monthly budget target.

So it’s a way to effectively uncap the budget and make sure you’re not missing any opportunities, which is a good segue into the Missed Opportunities Report. What the Missed Opportunities Report does is effectively show you what your current performance is and how that compares to the performance that you could have gotten should you have been uncapped on either the budget side or the bid side.

And so those two tools can work very well together because today you could go to the Missed Opportunities Report and see how many opportunities you’ve missed and how much value you left on the table by virtue of not having an uncapped budget. And so for the holiday season, you can check the Missed Opportunities Report and see how having a demand-led pacing budget could help you capture that additional demand.

Ginny: And then that gives you something to bring to the finance team and talk about where we can build in more—these are the opportunities we’re missing, is there opportunity to bring more budget into these campaigns as we’re heading into this incredibly competitive time?

Thank you so much. If you could give those watching one, two, three must-dos for holiday readiness, what would they be?

Enric: I would say the product feed continues to be super important. A lot of the experiences and features that we are building revolve around the product feed, so having high quality in your product feed continues to be paramount to driving performance. Same goes for audiences—make sure to upload your audience data. This is used by most of the new features that we’re launching, like New Customer Acquisition, retention, and loyalty. So it is very important to have data uploaded to use for Customer Match that represents a high percentage of your audience base.

If you’re using Shopping campaigns, enable AI Max for Shopping. That will help you harness that additional AI-based performance. You can also adopt these features safely by virtue of using AI Brief, text exclusions, messaging restrictions, alongside the other controls that we have added. So those would be the three that I would highlight.

Ginny: I guess these are obviously great tips for the holidays, but also well beyond, evergreen tips. I think the data piece is so important. I know we’re also gonna be talking about this more at the Rethink ROI event as well.

Thank you so much, Enric, for sharing your expertise and your tips.

Be sure to check out the “Ads Decoded” newsletter on the Google Ads LinkedIn page, where we’ll have more insights and resources for you. Thanks so much for listening. Until next time.