---
title: "How Google Shopping ads work, from feed to sale"
description: "How Google Shopping ads work: Merchant Center, the campaign, the auction, where ads show and how a click and a sale are recorded. Sourced from Google."
canonical: "https://www.productmetrics.io/blog/how-google-shopping-ads-work"
pageType: article
language: en
publisher: "Product Metrics"
author: "Berend Vrakking"
datePublished: 2026-10-16
dateModified: 2026-10-16
image: "https://www.productmetrics.io/og/blog/how-google-shopping-ads-work.png"
---

> Content index: https://www.productmetrics.io/llms.txt

# How Google Shopping ads work, from feed to sale

## Key takeaways

- Google Shopping ads are built from the product data in Merchant Center, not from keywords. They show a product photo, title, price and store name, and Shopping campaigns charge per click.
- A Google Shopping ad takes seven steps: products into Merchant Center, the two accounts linked, a campaign created, an auction on every search, a click, and a sale recorded by your Google tag.
- You don't write Google Shopping ads. Merchant Center creates them from your product feed, so the data you send decides what a shopper sees.
- A sale that Google Ads records is revenue, not profit. In the illustrative example below, a ROAS of 5 and a 30% margin leave €200 after €400 of ads, before fixed costs, and break-even ROAS is 1 ÷ margin, 3.33 at a 30% margin.

Google Shopping ads are built from the product data in your [Merchant Center](https://www.productmetrics.io/glossary/google-merchant-center) account, not from keywords. You add products, link Merchant Center to Google Ads, create a campaign, and Google decides in an auction which ads to show for each search. This guide follows one ad from feed to sale, so you can see what you control at each step and where the sale is recorded.

This guide is for shop owners and PPC specialists who run, or are about to run, Shopping or [Performance Max](https://www.productmetrics.io/glossary/performance-max) campaigns. If you are starting from zero, the [Google Shopping ads beginners guide](https://www.productmetrics.io/blog/google-shopping-ads-beginners-guide) covers costs, budgets and the first campaign; this one explains the mechanics underneath. The mechanics below come from Google Ads Help and Merchant Center Help, linked in each section and listed under Sources. For what to do once the ads run, see [Google Shopping ads: manage and optimise](https://www.productmetrics.io/google-shopping-ads) and [how to optimise Google Shopping ads](https://www.productmetrics.io/blog/optimize-google-shopping-ads).

## How do Google Shopping ads work, in seven steps?

A Google Shopping ad passes through seven steps between your product data and a recorded sale. You do the first four, Google runs the fifth, and the last two happen on the shopper's side and in your tag.

**From product feed to recorded sale in seven steps**

1. **Add products to Merchant Center.** Send product data in a text or XML data source, or through an API. Google uses it to match products to searches and to build the ad.
2. **Fix the issues Merchant Center lists.** Incorrect or missing data can get a product disapproved, and issues can stop ads showing. Send fresh data at least every 30 days.
3. **Link Merchant Center to Google Ads.** The link comes before any Shopping campaign. It needs an admin of each account, and is approved automatically if you are an admin of both.
4. **Create a Shopping or Performance Max campaign.** Pick the Merchant Center account, a budget and a bidding strategy. Optionally split products into groups.
5. **Google runs an auction on every search.** Your bid, quality, thresholds, context and the competition decide whether an ad shows and where.
6. **A shopper clicks the ad.** In a Shopping campaign you pay when someone clicks an ad that leads to your website.
7. **Your Google tag records the sale.** The conversion is credited to the day of the click, so recent days keep filling in.

## 1. What are Google Shopping ads?

Google Shopping ads are a retail ad format that shows a product photo, title, price and store name. Google puts it this way: "Unlike text-only ads, Shopping ads display a product photo, title, price, store name, and more" ([About Shopping ads](https://support.google.com/google-ads/answer/2454022)). The data comes from Merchant Center, and Google says the ads "use your existing Merchant Center product data (not keywords) to decide how and where to show your ads".

So a shopper's search is matched to your product data, not to a keyword list you chose. Two campaign types serve these ads: Shopping campaigns, also called standard Shopping, and Performance Max campaigns that use a Merchant Center feed.

You may know them as product listing ads, or PLAs. That is a name many guides use for the same ads, for example [Shopify's guide to Shopping ads](https://www.shopify.com/blog/shopping-ads-google). Google's own help pages call them Shopping ads, so this guide does too.

> **Sidenote:** CSS Product Listing ads are a different format. Google describes them as ads that send the click to a product page on a comparison shopping service's website, not to a shop ([About CSS Product Listing ads](https://support.google.com/google-ads/answer/14645037)).

## 2. How are Google Shopping ads created?

You don't write Shopping ads. Google's help page on what makes up a Shopping ad says "Merchant Center creates these based on information you include in your product feed" ([What makes up a Shopping ad](https://support.google.com/google-ads/answer/6275294)). Google may also use content from your landing page and images, and the look of the ad can change, for example through automatic image cropping.

Creating the ads therefore means three jobs: get your [product feed](https://www.productmetrics.io/glossary/product-feed) into Merchant Center, link the two accounts, and create the campaign.

**Product data.** Add products in a text data source, an XML data source or through an API, following Google's [product data specification](https://support.google.com/merchants/answer/188494). Google warns that incorrect, inaccurate or missing information "can cause disapprovals", and that issues can stop your ads and free listings from showing. It also asks for up-to-date data at least every 30 days ([Requirements for Shopping ads](https://support.google.com/google-ads/answer/6275312)). What to put in the titles and attributes is covered in [how to optimise a Google Shopping feed](https://www.productmetrics.io/blog/optimize-google-shopping-ads), and the account itself in [what Google Merchant Center is](https://www.productmetrics.io/blog/what-is-google-merchant-center).

**The link.** Google says you need to link your Google Ads and Merchant Center accounts before you can create Shopping campaigns. The link needs an admin of each account, and it is approved automatically if you are an admin of both ([Link Google Ads and Merchant Center](https://support.google.com/google-ads/answer/12499498)).

**The campaign.** In Google Ads you choose New campaign, pick Shopping as the campaign type, select the Merchant Center account, set a daily budget and choose automated bidding ([Create a Shopping campaign](https://support.google.com/google-ads/answer/3455481)). You can't change the Merchant Center account after the campaign is created.

A new campaign starts with one "All products" group. You can split it into product groups by attributes such as brand, product type or custom labels 0 to 4, and give each group its own bid; each product can sit in only one biddable group per ad group, and a new label can take 24 to 48 hours before it works there ([Product groups](https://support.google.com/google-ads/answer/3517331)).

| Part of the ad | Who sets it | Where |
|---|---|---|
| Photo, title, price | You, through your product data | Merchant Center |
| Which products can advertise | You, with Google checking the data against its policies | Merchant Center, Google Ads |
| Budget and bidding | You | Google Ads |
| Which ad shows for a search | Google | The auction |
| How the ad looks | Google, from your data and landing page | Google |

## 3. How does Google decide which Shopping ad shows?

Google's auction decides which Shopping ad shows. It runs one "every time someone searches on Google or visits a site that shows ads", with a separate auction for each ad location ([How the Google Ads auction works](https://support.google.com/google-ads/answer/6366577)). Your bid is the most you are willing to pay per click, and you often pay less than that.

Google lists six things that decide whether an ad shows and in which position:

| Factor | What it covers | Who influences it |
|---|---|---|
| Bid | The most you will pay per click | You |
| Ad and landing page quality | Summarised in Quality Score | You |
| Assets and formats | The expected impact of the assets and formats you use | You and Google's estimate |
| Thresholds | Minimum quality an ad must reach for a position | Google |
| Context | Search terms, location, device, time of search | The shopper |
| Competitiveness | How close the other ads' ranks are | The other advertisers |

Google calls the minimum quality an ad must reach for a position its Ad Rank threshold, and says ads with similar ad ranks have a similar chance to win. It notes that "even if your competition has higher bids, you can still win a higher position at a lower price". Its auction page describes ads in general and doesn't give a Shopping-specific formula, so treat the list as the factors, not a recipe.

Your product data comes before all of it. Google uses the details you submit when it matches a user's search to your ads, and a product that Merchant Center disapproves can't show. A clear title and correct attributes are how a product gets into the auction for the right searches.

## 4. Where do Google Shopping ads show?

Where Shopping ads show depends on the campaign type. Shopping campaigns show on the Shopping tab, on Google Search next to the results and on Google Images, plus Search Partner websites if your campaign includes them. Performance Max reaches most Google Ads channels, including YouTube, Gmail, Display and Maps ([About Shopping ads](https://support.google.com/google-ads/answer/2454022)).

| | Shopping campaign | Performance Max |
|---|---|---|
| Shows on | Shopping tab, Google Search, Google Images, Search Partner sites if included | Most Google Ads channels, including YouTube, Gmail, Display and Maps |
| Product data | Merchant Center feed | Merchant Center feed, for Shopping ads |
| You are charged | Per click, when someone clicks an ad that leads to your website | For performance, for example clicks or CPM |

In many European countries, Shopping ads have to be placed through a Comparison Shopping Service (CSS). Google lists the Netherlands, Germany, France, Belgium, Italy, Spain, Sweden, Switzerland and the United Kingdom among them, and says you can use Google Shopping or any other CSS ([Comparison Shopping Services](https://support.google.com/merchants/answer/12653197)). The campaign steps above stay the same.

## 5. How does Google Ads record a Shopping ad click and sale?

A Google tag on your site records the sale that follows a Shopping ad click. Google's conversion tracking page describes the path: you add the Google tag, a short-lived cookie is stored on the shopper's device when they click your ad, and when they complete the action you defined, the system recognises the cookie through your code snippet and records a conversion ([About conversion tracking](https://support.google.com/google-ads/answer/1722022)).

Google Ads reports conversions by the date of the ad click by default, so cost and conversions land in the same period ([About conversion time reporting](https://support.google.com/google-ads/answer/9549009)). A shopper who buys a week after clicking is counted on the click day. The most recent days keep gaining conversions after you look at them, so judge a product after those conversions have arrived.

A recorded sale is revenue, not profit. Illustrative data: say 1,000 clicks cost €0.40 each, 2% of them buy a €100.00 product (excl. VAT) and the contribution margin is 30%. The ads cost €400 and 20 orders bring €2,000 of revenue, a [ROAS](https://www.productmetrics.io/glossary/roas) of 5. The [contribution margin](https://www.productmetrics.io/glossary/contribution-margin) of 30% makes the contribution €600, and after the ads €200 is left as profit, before fixed costs.

**Figure: What 1,000 clicks leave you: ads, revenue, contribution and profit.** Illustrative data: at a ROAS of 5, €400 of ads brings €2,000 of revenue, but at a 30% margin only €600 of that is contribution. The ads take €400 of it, so €200 is profit after ads, before fixed costs.

| Step | Amount in € |
| --- | --- |
| Ad cost | €400 |
| Revenue | €2,000 |
| Contribution (30% margin) | €600 |
| Profit after ads, before fixed costs | €200 |

_Source: Illustrative data: 1,000 clicks at €0.40, a 2% conversion rate, a €100.00 price excl. VAT and a 30% contribution margin_

The conversion rate decides which side of break-even the same spend lands on. A shop that records only some of its sales sees a lower rate than it really has.

**Figure: Profit after ads on the same 1,000 clicks, by conversion rate.** Illustrative data: the same €400 of ads leaves a €100 loss at a 1% conversion rate, €200 profit at 2% and €500 at 3%, all after ads and before fixed costs. A sale the tag never records looks like a lower conversion rate.

| Conversion rate | Profit after ads, before fixed costs |
| --- | --- |
| 1% | -€100 |
| 2% | €200 |
| 3% | €500 |
| 4% | €800 |

Reference line: Break-even (€0).

_Source: Illustrative data: 1,000 clicks at €0.40, a €100.00 price excl. VAT and a 30% contribution margin. Calculated as clicks × conversion rate × price × margin − ad cost_

[Break-even ROAS](https://www.productmetrics.io/glossary/break-even-roas) is 1 ÷ contribution margin, which is 3.33 at a 30% margin, so a ROAS of 5 clears it here. The profit equivalent is POAS, ROAS × margin, which is 1.5 in this example; break-even POAS is 1.0 ([POAS vs ROAS](https://www.productmetrics.io/blog/poas-vs-roas)). The [break-even ROAS calculator](https://www.productmetrics.io/break-even-roas-calculator) does the sum for any margin, and [break-even ROAS per product](https://www.productmetrics.io/blog/break-even-roas-per-product) works through it product by product.

If the tag doesn't fire, the sale never reaches Google Ads and the ROAS you see is lower than the real one. The [ad blocker test](https://www.productmetrics.io/ad-blocker-conversion-tracking) runs in your own browser and shows which blockers stop your tags, and [Full Signal Tracking](https://www.productmetrics.io/server-side-tracking) sends conversions to Google Ads server-side.

## What to check first: Merchant Center issues and break-even ROAS

Open the issues list in Merchant Center and fix disapproved products first, because nothing after step 2 works for a product that can't show. Then work out the break-even ROAS of your five biggest products, so the sale in step 7 means something. [Google Shopping management](https://www.productmetrics.io/blog/google-shopping-management) covers who does which job from there, and [Product Segmentation](https://www.productmetrics.io/product-segmentation) segments every product by clicks and return once there are more than you can read by hand.

## Sources: the Google Help pages behind each step

All opened 15 October 2026.

- Google Ads Help: [About Shopping ads](https://support.google.com/google-ads/answer/2454022), [What makes up a Shopping ad](https://support.google.com/google-ads/answer/6275294), [Requirements for Shopping ads](https://support.google.com/google-ads/answer/6275312), [Link Google Ads and Merchant Center](https://support.google.com/google-ads/answer/12499498), [Create a Shopping campaign](https://support.google.com/google-ads/answer/3455481), [Product groups](https://support.google.com/google-ads/answer/3517331), [How the Google Ads auction works](https://support.google.com/google-ads/answer/6366577), [About conversion tracking](https://support.google.com/google-ads/answer/1722022), [Conversion time reporting](https://support.google.com/google-ads/answer/9549009), [About CSS Product Listing ads](https://support.google.com/google-ads/answer/14645037).
- Google Merchant Center Help: [Product data specification](https://support.google.com/merchants/answer/188494), [About advertising with Comparison Shopping Services](https://support.google.com/merchants/answer/12653197).

## Frequently asked questions

### What are product listing ads?

Product listing ads, or PLAs, is a name many guides use for Google Shopping ads: ads with a product photo, title, price and store name, built from your Merchant Center data. Google's help pages call them Shopping ads. CSS Product Listing ads are a separate format that sends the click to a comparison shopping service's page.

### Do Google Shopping ads use keywords?

Google Shopping ads don't use keywords. Google says they use your existing Merchant Center product data, not keywords, to decide how and where to show your ads. A shopper's search is matched to your product titles and attributes, so the feed does the work a keyword list does in a Search campaign.

### How are Google Shopping ads created?

You don't write Google Shopping ads. Merchant Center creates them from the information in your product feed: a product image, title and price, plus your store name. You link Merchant Center to Google Ads, create a Shopping or Performance Max campaign, and choose a budget and bidding strategy.

### How does Google decide which Shopping ad shows first?

Google decides which Shopping ad shows first in an auction it runs every time someone searches. It weighs your bid, ad and landing page quality, the expected impact of assets and formats, minimum quality thresholds, the search context and how competitive the auction is. A higher bid does not guarantee a higher position.

## Keep reading.

- [Google Merchant Center suspended for misrepresentation: a dropshipper's checklist](https://www.productmetrics.io/blog/google-merchant-center-suspended-misrepresentation)
- [Google Shopping Ads: A Beginner's Guide (2026)](https://www.productmetrics.io/blog/google-shopping-ads-beginners-guide)
- [Selling on Google Shopping: The 2026 Playbook](https://www.productmetrics.io/blog/selling-on-google-shopping)

---

Written by Berend Vrakking, founder of Product Metrics. Last updated 2026-10-16.

HTML version: https://www.productmetrics.io/blog/how-google-shopping-ads-work