Performance Max is how most Shopping advertising now runs. You supply a product feed, a budget, some creative and a goal, and Google decides where and when your products appear across Search, Shopping, YouTube, Gmail, Maps and the display network.
For a small shop that is either a genuine advantage or an expensive way to find out your margins do not support advertising. The difference is almost entirely decided before you launch, by arithmetic most people skip.
Do this calculation first
Not optional, and it takes five minutes.
- Average order value. Say £45.
- Subtract product cost. If your margin is 55%, that leaves £24.75.
- Subtract card fees. Roughly £1.15 on Orbit's Solo plan at 2% plus 25p. Leaves £23.60.
- Subtract postage and packaging. Say £4.50. Leaves £19.10.
That £19.10 is your contribution per order: what an order actually earns before overheads and before advertising.
Now divide it by your conversion rate. At 2%, one hundred visitors produce two orders and £38.20 of contribution, so you can afford 38p per click to break even. At 1%, it is 19p.
Compare that to what clicks cost in your category. If the answer is uncomfortable, you have learned something extremely valuable for the price of five minutes rather than five hundred pounds. And note what the maths says: improving your conversion rate raises what you can afford to bid, proportionally. Doubling conversion from 1% to 2% doubles your affordable click price. That is why checkout work often beats ad work.
Why it suits some shops and not others
It tends to work when you have healthy margins, a decent average order value, a catalogue with enough products for the system to have choices, a converting site, and enough budget to get through the learning period without panicking.
It tends to struggle when margins are thin, average order value is low, the catalogue is tiny, the product data is poor, or the budget is so small the campaign never gathers enough data to learn anything. That last one is the trap: a very small budget does not produce a small version of the result, it often produces no useful result at all.
The feed is most of the campaign
Here is the thing people underestimate. In Performance Max, your product feed is doing much of the targeting work. Google is matching your product data against queries and intent signals, which means the quality of your titles, images, categories and attributes largely determines who sees your products.
In other words: a bad feed is a bad campaign, and no amount of bid tuning fixes it. Fixing product titles is often the highest-return change available to a Performance Max advertiser, which is why we wrote a whole post about titles.
Settings that matter for a small shop
Track the right conversion. Purchases with real values. If you are optimising towards page views or add-to-carts, the system will faithfully buy you those instead of sales.
Start without a target return figure. Let it gather data before you constrain it. Setting an aggressive target on day one usually strangles the campaign before it learns.
Exclude your brand searches if you can. People searching your business name were coming anyway, and paying for those clicks inflates your reported results while adding nothing. This flatters the numbers considerably if you leave it on.
Give it real creative. Without good images and text it falls back on whatever it can scrape, and the results look like it.
Leave it alone for a fortnight. The hardest instruction to follow. Daily fiddling resets learning and guarantees you never find out whether it works.
How to tell whether it is working
One number: does contribution from attributed orders exceed the spend? Not impressions, not clicks, not a return figure counting brand searches you were getting free.
Give it enough time to produce a meaningful number of orders. Thirty conversions is a signal, four is noise, and a great deal of ad-account misery comes from making confident decisions on four.
The honest alternative
If the break-even maths came out badly, the answer is not a cleverer campaign. It is one of these:
- Raise conversion rate, which raises what you can afford to pay per click proportionally.
- Raise average order value, through free delivery thresholds and bundles. See discounts that pay.
- Use the free channels properly first. Free Google listings cost nothing and use the same feed, which makes them the obvious first move for a shop where paid does not yet add up.
None of that is as exciting as launching a campaign. All of it is cheaper than learning the same lesson at £30 a day.
Questions people ask about Performance Max
How much should a small shop spend on Performance Max?
Enough that the campaign can gather data, or nothing at all. A budget so small that the campaign never accumulates meaningful conversions does not produce a small result, it usually produces no usable result while still spending your money. Work out your break-even cost per click first: contribution per order divided by conversion rate. If that number is far below typical click costs in your category, the honest answer is not to run it yet.
Why is my Performance Max campaign not profitable?
Three usual causes. The feed is weak, and since Performance Max uses your product data to decide who sees you, poor titles and attributes mean poor targeting that bidding cannot fix. Brand searches are included, which inflates reported returns with orders you were getting free. Or the underlying maths never worked, because contribution per order divided by conversion rate was always below the going click price.
Do I need a product feed for Performance Max?
For retail, yes, and it does more work than most advertisers realise. Google matches your product data against queries and intent, so titles, images, categories and attributes largely determine who sees your products. Improving product titles is frequently the highest-return change available, and it costs nothing.
Should I exclude brand searches from Performance Max?
Where you can, yes. People searching your business name were already coming to you, so paying for those clicks adds cost without adding orders, and it inflates your reported return on ad spend to a degree that can make a losing campaign look successful. Excluding brand traffic gives you a truer picture of what the advertising is actually generating.
The short version
Do the break-even sum before you spend anything: contribution per order divided by conversion rate is what you can pay per click. Fix your product titles first, because in Performance Max the feed is most of the targeting. Track real purchases, exclude brand searches, and then leave it alone for two weeks. And if the maths says no, work on conversion rate and free listings instead, because those raise the ceiling rather than testing it.