Performance Max vs Standard Shopping update – Priority changed and Ad Rank wins

Newsletter update on the 17th of October 2024:

Campaign Priorities

Performance Max campaigns used to have uber-priority over the traditional High, Medium and Low-priority settings for Standard Shopping campaigns. The uber-priority already applied to Smart Shopping since it was introduced in 2018. The actual Ad Rank for a product ad entering the Shopping Ads auction was determined by the settings of the campaign with the highest priority being eligible to participate. This was very straightforward.

Before smart shopping was introduced advanced advertisers used campaign priorities to implement the waterfall strategy to get more control and insights leading to better results from their Standard Shopping campaigns.

Competing based on Ad Rank

Google has decided to let Performance Max and Standard Shopping compete with each other based on ad rank. To understand the impact we first need to look into how the actual ad rank for a product within shopping ads is determined by Google.

The Shopping Ads auction

The way we expect the Shopping Ads auction in Google Ads works: [not officially confirmed by Google]

1. The searcher types in a query on Google.
2. Google looks for advertisers with products that are eligible to show for the search query.
3. Google goes through the campaigns (priorities of the Performance Max and Shopping Ads campaigns) to find products that are eligible, based on budget, ad rank (Cost Per Click bid and predicted Click Through Rate) and targeting settings.
4. Based on the outcome of the auction the winning products are presented to the searcher in the Shopping Ads box on Google.

Campaign priorities are still in place for Standard Shopping, but Google has decided to let Performance Max compete with all your Standard Shopping campaigns targeting the same products based on Ad Rank.

So when a product is both in your Standard Shopping setup and in Performance Max campaigns. The campaign type with the highest Ad Rank (CPC Bid) will enter the auction for a position in the Shopping Ads window.

So what can you expect?

• You might gain additional total conversion volume coming from both campaign types.
• Your cost will most likely go up (possibly without incremental conversion volume).
• Either way, when running both Standard Shopping and Performance Max campaigns you will have less control over your budget and performance for Shopping Ads.
• Personal thought: The introduction just before peak season suggests Google expects an uplift in Ad Spend.

What we’ve seen so far

We’ve been monitoring these changes on a high level up until November 10th, 2024, and so far, we haven’t seen any significant changes in click volume. Since, as Google mentioned, the roll-out is gradual, we’ll keep monitoring, dive deeper into the data, and keep you updated.

This graph is based on over 700 Google Ads accounts.

Update Jan 2025: Today, we did another analysis and we came to the same findings.