When to Split vs. Combine Product Groups in Google Shopping: Strategic Segmentation for Higher Returns

Managing Google Shopping campaigns efficiently requires more than just a strong product feed and budget—it demands smart segmentation. One of the most overlooked levers of control lies in how you structure your product groups. The decision to split or combine product groups directly impacts performance, bidding precision, and visibility. So when should you segment your product groups granularly—and when is it smarter to bundle them?

Let’s explore the strategy behind each approach so you can optimize your Shopping campaigns for higher ROAS.

Example Below When splitting product categories even if we search for necklace and Ring - Not a single company has a collection that combines the two; Therefore only necklaces are Displayed.

Why Product Group Segmentation Matters

Product group segmentation allows advertisers to apply different bids to specific product sets based on their performance, margin, inventory levels, and strategic importance. However, there’s a trade-off: the more granular you go, the more complex the management becomes. That's why knowing when to split and when to combine is critical.

When to Split Product Groups

1. High Variance in Performance

If certain products consistently outperform others in the same group (in terms of ROAS, CTR, or conversion rate), you’re likely underbidding on winners and overbidding on underperformers. Split them.

Example: You sell shoes. Your running shoes outperform your casual shoes by 2x the ROAS. It’s time to split them into separate groups and bid accordingly.

2. Margin Differences

If products have different profit margins, a uniform bid could be dangerous. Segment by margin tiers to protect profitability.

Example: You sell electronics, and your phone accessories have low margins while laptops have high ones. They shouldn’t live under the same bid.

3. Inventory Volume or Stock Levels

High-volume items or limited-stock SKUs often require unique bidding strategies.

Example: A best-selling product that goes out of stock frequently should be in its own group so you can pause or adjust easily.

4. Seasonal or Promotional Relevance

Segment products that are part of seasonal pushes or promotions for more aggressive bidding.

Example: You’re running a summer swimwear sale. Isolate swimwear into its own product group and raise bids during the campaign.

5. Brand or Category Focus

If you want to allocate budget to specific brands or categories that align with your marketing strategy, split them into their own groups.

When to Combine Product Groups

1. Low Traffic or Sparse Data

If individual products don’t generate enough traffic to collect meaningful data, combine them to reach a statistically significant threshold.

Example: If you sell niche parts with low search volume, group similar items together for better learning and control.

2. Shared Performance Patterns

If a group of products performs similarly (similar ROAS, CTR, AOV), combining them reduces management overhead without performance loss.

Example: You sell different colors of the same backpack, and they all perform the same. Keep them together.

3. Simpler Management

Over-segmentation leads to analysis paralysis and wasted time. If the extra effort doesn’t translate to performance improvement, combine.

Pro Tip: Only split groups when you can act on the data. If your budget or team can’t manage 50 product groups, focus on the top performers.

4. Shared Bid Strategy

When several SKUs share the same goal (e.g., liquidating old stock or maximizing exposure), a unified bid simplifies campaign management.

Smart Segmentation = Better Performance in Google Shopping

The goal isn’t to create the most segmented account—it’s to create the most profitable one. Start by segmenting the top 20% of products driving 80% of your sales. Analyze their behavior, test bids, and scale what works. For the rest, combine intelligently based on shared attributes and performance.

Conclusion

Mastering product group segmentation in Google Shopping means knowing when to split for performance control and when to combine for simplicity. Strategic segmentation lets you allocate your budget more efficiently, boost ROAS, and reduce wasted spend. It’s not about complexity—it’s about control.

Need help restructuring your Shopping campaigns for better ROI? Contact us today and let Flomaticx optimize your account for profitable growth.

About the Author

Adnan is a digital marketing specialist with expertise in e-commerce optimization. With a bachelor's degree in Business Psychology focused on online customer behavior and analysis, he brings a unique perspective to understanding shopping behaviors and conversion patterns.