How the Top 1% Retailers Run Google Ads in 2026

Episode Transcript

00:00:00
Mike:
Welcome to Growing Ecommerce. I am one of your hosts, Mike Ryan, and with me is our other host, Chris. Hello, sir. We’ve got a good one for you today. We’ve been in QBR season, doing a lot of our quarterly talks with our clients.

00:00:41
Chris:
I can’t humble brag about that, so I’m just going to brag. We’re talking with some pretty large brands and retailers by European standards. Some of the topics we’ve been discussing would be really relevant to a broader audience. It’s interesting to know what’s on the agenda in these meetings.

00:01:02
Mike:
That includes DLG, which is a new part of Google’s sales agenda called Demand Led Growth. We’ll also talk about UCP—Universal Commerce Protocol—growth pressure, and data challenges.

00:01:37
Chris:
The topics we unpack today reflect what even the biggest players are thinking about and where the challenges lie within these large organizations. I think there is a lot to learn from the big ones.

00:01:53
Chris:
QBR stands for Quarterly Business Review. These are strategy meetings we have with our clients. Over the last few months, Mike and I have been visiting rather large clients to review the last quarter and plan the next three to six months. We want to talk about the patterns we see and what is moving the big players. Where should we start, Mike?

00:02:51
Mike:
We can kick it off with DLG. This surfaced because advertisers were raising it more often and asking for our opinion. You can guess who was bringing it to the advertisers—Google.

00:03:34
Chris:
Demand Led Growth. They’ve done a great job with that branding.

00:03:55
Mike:
I don’t want to be too negative because it’s not all good or bad, but I admire their sales skills. Demand Led Growth is their phrasing for having an open budget instead of a limited budget. If you asked for a “blank check,” it wouldn’t land well, but their argumentation is sophisticated.

00:04:17
Mike:
Their argument is that if you hit a budget limit in a given day or month, you are missing opportunity. With an open budget, your costs can follow demand. If there’s a spike, you’re there for it, while still using an efficiency target—like a ROAS target—to make sure it works out.

00:05:01
Chris:
I’m not negative about it because it reflects our point of view to a certain degree. Limited budgets are an old concept. If you limit your budget, you can’t be “demand led” because sometimes demand exceeds your limits. I like the sales narrative. Google is a very effective sales machine.

00:06:08
Mike:
It often enters organizations in a top-down manner, approaching a CMO who then brings it to the teams. I view it neutrally. Google is already allowed to break your daily budget by a large margin, so how limited are budgets really?

00:06:31
Chris:
Results across the board are mixed; there are outliers in both directions. But it’s worth a shot. What’s the winning paid search playbook for 2026 and beyond? Google is now telling you to open the budget and use your efficiency targets and rule settings as guidance for the algorithm.

00:07:34
Chris:
We were talking earlier this season about using ROAS as a lever and a signal to Google. I love the idea that Google is actively telling you to use ROAS as a signal for the algorithm. That is somewhat new.

00:08:04
Mike:
I’ve actually seen an opposite trend in recent years where advertisers have no ROAS target and control campaigns through cost limits. I favor the ROAS approach better.

00:08:27
Chris:
It’s worth a shot, but you have to understand that ROAS target setting becomes a dynamic lever. Most clients do this based on gut feeling, but it can be done better. This is not a static game anymore.

00:09:12
Mike:
Next is UCP—it’s everywhere. This isn’t coming from Google as much yet, but advertisers are asking about it because they see the press releases.

00:09:32
Chris:
The prototypical questions are: “What is UCP?” and “What do I need to do for it?”

00:09:59
Mike:
UCP is an infrastructure layer. There is work to do on the integration with your shop system. If you’re using a modern system like Shopify—who is a partner driving this—it will be easy. Other systems will follow. If you have a bespoke or legacy system, you’ll have to do some work, but the documentation is there.

00:11:00
Mike:
For performance teams, the focus should be on the Merchant Center feed. The data feed is the center of the UCP discussion. There are administrative fields to populate, like tax compliance and shipping costs. You have to be picture-perfect.

00:12:03
Mike:
Then there is future-oriented stuff like AI checkout, which you opt into at the product level. But overall feed hygiene—titles, descriptions, product types—is the foundational stuff that still matters most.

00:12:52
Mike:
The potential competitive advantage comes from new conversational attributes. These help ground Google’s AI. They want data from your landing pages, Q&As, and reviews—anything not currently in your feed. It’s moving in the direction of semantic, conversational AI.

00:14:05
Mike:
As a performance team, you have to decide which attributes are relevant, your capability to populate them, and the potential impact. Prioritization is key.

00:14:24
Chris:
The beauty of this is that you can focus on things with the highest probability of impacting performance. There are levers here to outsmart the competition.

00:15:27
Mike:
You don’t need to panic, but starting early is key. Google says this will support your visibility in AI Overviews and free listings. It’s broader than just UCP; your organic visibility should benefit from this as well.

00:16:18
Chris:
We don’t know exactly how many new data feed attributes are coming, but they are working on dozens to cover more industries and use cases.

00:17:22
Chris:
Another topic is growth. We’ve preached for a long time that the bottom-line question is: “At what cost can I drive incremental growth?” The understanding of incrementality is finally landing at the highest levels of companies. CFOs now understand the dynamics of what it costs to gain another 5% of growth.

00:18:36
Chris:
Many players were in trouble post-pandemic because finance teams assumed the unlimited growth of 2021 would continue forever. That fallacy in planning caused a lot of struggle. The understanding that growth has a cost has finally landed.

00:19:33
Mike:
The “CMO-CFO marriage” is finally coming to life. These channels represent a huge percentage of revenue, and CFOs are starting to understand how these campaigns and platforms work.

00:20:16
Chris:
We also discussed Chinese competition—Temu and Shein. It’s everywhere, and every industry is feeling it. Clients ask, “What can we do about it?” There is no easy answer, but the “last mile” optimization matters more than ever against them.

00:21:27
Mike:
Regarding the last mile, the post-purchase experience is becoming vital. If you become a “warehouse” for Google or ChatGPT, that experience is how you win loyalty. I bought something recently where the packaging was so premium it felt like a gift. That’s how you win.

00:22:52
Chris:
You have leverage. It’s about setting the right price and understanding fundamental principles. With new data feed attributes, don’t go for every single one—be sure about the impact on your business.

00:23:59
Chris:
A constant theme is granularity versus velocity. How granular should a campaign structure be? Google often fights against granularity because they need data velocity at the campaign level.

00:24:47
Mike:
Don’t go with a single-campaign approach, but don’t be too granular either. You need 30 to 100 conversions at the campaign level. Large advertisers can chop up data more, but there are diminishing returns. After 200 monthly conversions, the picture doesn’t change much. You need a strategic reason for every split.

00:25:58
Mike:
I’ve seen large businesses running almost all their revenue through one PMax campaign. That’s scary. You need a thin line between granularity and consolidation.

00:26:58
Chris:
Finally, attribution and Marketing Mix Modeling (MMM). Understanding the true contribution of a channel is more important than ever because incremental growth is becoming more expensive due to rising CPCs.

00:28:28
Mike:
Google’s technology is very expansionary—it wants to find every possible impression. But were those impressions actually building the business? Every advertiser has a ceiling where expansion is no longer efficient. That’s where MMM helps with verification and calibration.

00:30:34
Chris:
MMM used to be super complex, but now there are great tech stacks available that make it feasible for mid-sized and even small retailers. It allows for a scientific approach to understanding channel impact.

00:31:17
Mike:
I think we should wrap it up. There are solutions to every topic. You can’t control everything, but there is always wiggle room. That is what optimization is.

00:32:07
Chris:
To quote Matthew McConaughey in Interstellar, when the AI says something is impossible, he responds, “It’s necessary.” That is the right mindset for e-commerce.

00:32:59
Mike:
Is it possible to do a great outro? Because it’s certainly necessary. Thanks for listening to another episode of Growing Ecommerce, brought to you by Smarter Ecommerce. To learn more, visit smarter-ecommerce.com. If you enjoyed this episode, please subscribe, follow, and like. Thanks so much!