Keyword Segmentation for eCommerce Ads: Guide

Anirban Sen
21 hours ago
13 min read

Keyword segmentation is the key to running effective Google Ads for eCommerce. Instead of lumping all your keywords into one campaign, you group them by product type, search intent, or match type. This ensures your ads are more relevant, leading to better click-through rates, lower costs, and higher conversions.

Here’s why it matters:

Better Ad Relevance: Show users ads that match exactly what they’re searching for.
Improved ROI: Focus ad spend on high-performing keywords and products.
Lower Costs: Higher relevance improves Quality Scores, reducing CPCs by up to 50%.
Higher Revenue: Case studies show revenue increases of up to 2.3x and ROAS boosts by 50%.

Effective segmentation methods include grouping keywords by match type (Exact, Phrase, Broad), separating branded vs. non-branded terms, and using advanced techniques like Single Keyword Ad Groups (SKAGs). Regularly review performance metrics like CTR, ROAS, and CPA to refine your campaigns and eliminate wasted spend.

The result? Ads that drive more sales without overspending. Keep reading for actionable strategies to implement keyword segmentation in your campaigns.

Keyword Segmentation Basics

What is Keyword Segmentation?

Keyword segmentation is all about organizing your keywords into focused groups based on product category, search intent, or match type. Instead of lumping hundreds of keywords into one campaign, you create smaller, targeted segments. This way, your ads and landing pages can be tailored to match specific search queries.

For instance, if you're selling running shoes, you wouldn't treat "Nike men's running shoes" the same as "Adidas women's running shoes" or "men's running shoes." Each of these would be its own segment, with custom ad copy and a landing page designed to match the searcher's intent. So, if someone searches for "Nike Pegasus 41 size 10 black", they should see an ad for that exact shoe and land on its product page - not a general running shoes category page. That kind of precision makes the difference between a campaign that performs well and one that wastes your ad spend.

This method of keyword grouping is especially important for eCommerce businesses, where product variety and search behavior can be complex. It sets the stage for managing the challenges of large product catalogs effectively.

Why eCommerce Businesses Need Keyword Segmentation

Keyword segmentation isn't just about staying organized - it’s a crucial strategy for managing the unique demands of eCommerce. If you're handling large product catalogs with different price points, sizes, colors, and brands, you're likely dealing with a wide range of search queries. Treating all these searches the same is a recipe for mismatched ads, irrelevant clicks, and wasted budget.

With segmentation, you gain precise control over your ad spend. For example, you can allocate more budget to high-margin or best-selling products while limiting spend on lower-performing categories. You can also bid more aggressively on branded keywords, which tend to have higher conversion rates and lower CPCs, while being more conservative with generic search terms. This kind of control is essential in the U.S. market, where CPCs are often high, and every wasted click can hurt your profits.

The benefits of segmentation show up in your campaign performance. Smaller, specific keyword groups improve your Quality Score because they make your ads more relevant. Google rewards this relevance with lower CPCs and better ad placements, which can cut costs by as much as 50% while boosting visibility. Plus, higher relevance leads to better click-through rates and conversion rates, as shoppers are more likely to see exactly what they’re searching for. For eCommerce businesses working with tight ROAS targets, these improvements mean more revenue for every dollar spent and the ability to scale profitably without sacrificing efficiency.

How to properly segment keywords in Google Ads

How to Group Keywords Effectively

Grouping Keywords by Match Type

Organizing keywords by match type allows you to better manage bids, budgets, and traffic quality. The key is to create separate ad groups - or even campaigns - for Exact, Phrase, and Broad match keywords. This setup lets you focus your budget on high-performing terms (typically Exact match) while experimenting with Broad match keywords to uncover new opportunities, all without overspending.

Let’s break it down with an example. Say you’re selling office chairs:

Exact Match: Use this for highly specific terms like [ergonomic office chair] or [ergonomic desk chair for back pain]. These are your proven money-makers, so you can bid higher to maximize returns.
Phrase Match: Target phrases like "ergonomic office chair" or "ergonomic chair for home office" to capture close variations while maintaining some control over relevance.
Broad Match: Use broader terms like ergonomic office chair to explore new long-tail searches. However, this requires strong negative keywords and consistent search term reviews to avoid wasting your budget.

Here’s a quick comparison of how each match type performs in eCommerce:

Match Type	How It Works	Pros	Cons	Best Use Cases
Exact	Matches only the exact keyword or very close variants (e.g., "nike revolution 6 men's size 11").	High relevance, precise ROI control, and easy mapping to product pages.	Limited reach; requires building out extensive keyword lists; may miss new variations.	Best for top-converting terms, high-margin products, and brand+product queries.
Phrase	Matches queries that include the full phrase in order, even with extra words before or after.	Balances reach and relevance, capturing natural variations.	Less control than Exact match; may bring in broader, less qualified traffic.	Ideal for category-level terms and long-tail phrases.
Broad	Matches related searches, synonyms, and variations beyond the literal phrase.	Maximizes reach and uncovers new long-tail opportunities; pairs well with smart bidding.	Higher risk of irrelevant clicks; requires diligent use of negative keywords and monitoring.	Best for exploratory campaigns, scaling, and identifying new trends.

A good starting point is to allocate around 60% of your budget to Exact and Phrase match keywords for reliable performance, and the remaining 40% to Broad match for discovery. Adjust these percentages based on how each group performs in terms of conversions.

Once you’ve grouped by match type, you can refine further by focusing on product and brand distinctions.

Segmenting by Product and Brand

Separating branded and non-branded keywords is crucial. Branded keywords (e.g., "Nike running shoes") tend to convert at a lower cost, while non-branded or generic terms (e.g., "running shoes for women") often need more budget and careful monitoring.

For product segmentation, align your campaigns and ad groups with the structure of your website. Start by creating campaigns for high-level categories - like "Women's Shoes" or "Men's Hoodies" - and then drill down into subcategories or collections within ad groups. For instance, an ad group for "Women's Running Shoes" could include keywords like "women's running shoes", "women's Nike running shoes", and "ladies running sneakers", all directing traffic to a collection page. This approach not only improves ad relevance and Quality Score but also makes it easier to track which categories are driving revenue.

You can also group keywords based on customer intent to fine-tune your messaging and landing pages. For example:

Transactional Keywords: Terms like "buy Nike Pegasus 40 men's 10" should lead to high-intent campaigns with dedicated product pages and price-focused ad copy.
Commercial Investigation Terms: Phrases like "best running shoes for flat feet" are better suited for comparison or collection pages.
Informational Keywords: Queries like "how to choose running shoes" are ideal for upper-funnel campaigns with lower bids.

How to Set Up Keyword Segmentation

Audit Your Website and Product Categories

Start by mapping your website's navigation and product categories to match your campaign structure. Document the main categories and their subcategories, going deeper into specific brands or product models where it makes sense. Your Google Ads campaigns should mirror this hierarchy, ensuring that search terms lead directly to the right products and landing pages.

Take a close look at product titles, descriptions, and URLs to identify high-intent search terms. Export these lists and pinpoint which categories generate the most revenue or have the highest profit margins - these deserve dedicated campaigns and budgets. Use search term reports and internal site search data to uncover the exact phrases shoppers use, then assign them to the appropriate category or brand group.

For example, a case study revealed a 2.3x revenue boost and a 50% increase in ROAS by restructuring product feeds to align keywords with product categories. This approach provided better coverage and drove growth without sacrificing efficiency.

Once your website is thoroughly audited, the next step is to align your ad groups with these themes.

Create Tightly Themed Ad Groups

After organizing your categories, set up campaigns with tightly themed ad groups. Each ad group should focus on a single, clear intent or theme. For example, themes could include "leather wallets", "Coach leather wallet", or "men's leather wallet under $50." Stick to 3–5 core keywords per ad group and only expand to 10–20 if the terms are closely related. This focused strategy improves Quality Score and helps you create ad copy that matches the search intent.

Your ad copy should reinforce the primary keyword theme in both headlines and descriptions, directing users to a relevant category or product landing page. For example, if you're selling mobile accessories, you could create an ad group for "phone cases iPhone 15" and include terms like "iPhone 15 case" or "iPhone 15 Pro case." Use negative keywords to filter out unrelated searches, such as terms for other phone models. Research shows that increasing your Quality Score from 5 to 7 can lower cost-per-click by about 28%, which directly impacts your budget efficiency.

Add Negative Keywords to Filter Traffic

To refine your traffic even further, use negative keywords. Build these lists based on keyword research and search term reports. Start by excluding non-commercial terms like "free", "DIY", "how to make", or "definition", as these often attract users who aren't ready to buy. Also, block irrelevant product types that share keywords with your offerings. For instance, if you sell physical wallets, exclude terms like "wallet app" or "crypto wallet."

Apply negative keywords strategically. Use account- or campaign-level lists for terms that are universally irrelevant, such as "jobs", "careers", or "wholesale." At the ad group level, use negatives to guide queries into the appropriate group. For example, if you’re targeting "running shoes", exclude terms like "sandals", "boots", "casual", or "kids" if your focus is on adult footwear. If a specific term like "blue running shoes" isn’t performing well in a broader group, consider adding "blue" as a negative and creating a separate ad group for that variant.

Regularly review search term reports - ideally weekly - to block irrelevant queries and add high-performing terms as exact or phrase match keywords in their respective ad groups. This ongoing process ensures your campaigns stay focused on high-conversion searches while minimizing wasted clicks.

Advanced Segmentation Methods

Single Keyword Ad Groups (SKAGs)

Single Keyword Ad Groups, or SKAGs, offer a precise way to manage your most valuable search terms by dedicating one keyword per ad group across various match types. For example, instead of lumping "Nike Air Zoom Pegasus 40" with other running shoe keywords, you’d create a specific ad group for that product. This allows you to craft ad copy and landing pages tailored to shoppers searching for that exact term. The result? Greater control over bids, more targeted messaging, and detailed performance tracking.

SKAGs are especially effective for your top-performing keywords - think best-selling products, high-margin categories, or branded terms that consistently drive revenue. If "custom wedding invitations" generate 15% of your monthly sales, a SKAG structure allows you to optimize every element for profitability. However, this method works best when applied selectively to high-impact keywords. For lower-volume terms, grouping them into themed ad groups prevents data fragmentation and simplifies management.

To set up a SKAG, include your target keyword in exact, phrase, and broad match modifier variations within a single ad group. Write ad copy that mirrors the keyword and directs users to the most relevant product or category page. Don’t forget to use negative keywords to avoid overlap with other ad groups. Monitor metrics like Quality Score, conversion rate, and cost-per-acquisition to ensure the added complexity pays off.

Catch-All Ad Groups for Extra Traffic

While SKAGs focus on precision, catch-all ad groups are designed to scoop up long-tail search queries that don’t fit neatly into your more targeted groups. Using broad match or modified broad terms, these groups can capture exploratory searches that still have the potential to convert. For instance, after creating specific ad groups for particular wallet styles, a catch-all group for "leather wallet" might snag searches like "handmade leather wallet with coin pocket" or "vintage leather wallet for men."

The trick with catch-all groups is keeping them under control, so they don’t eat into the performance of your primary campaigns. Set lower bids and allocate a smaller daily budget to these groups, allowing you to test new queries without over-spending. Use your search term report to identify high-converting phrases, which can then be promoted to dedicated SKAGs or themed ad groups. Non-performing queries should be added as negatives to refine your targeting further.

Many agencies, including Senwired, streamline this process with automation tools. Scripts can flag high-performing search terms and adjust bids based on Return on Ad Spend (ROAS) thresholds, making it easier for eCommerce brands to scale their campaigns efficiently while keeping a tight grip on ad spend.

How to Measure and Improve Segmented Campaigns

Key Metrics to Track

To fine-tune your segmented campaigns, start by focusing on critical performance indicators like Click-Through Rate (CTR), Conversion Rate (CVR), Cost per Acquisition (CPA), and Return on Ad Spend (ROAS). Each metric reveals different insights into your campaign’s effectiveness:

CTR shows how well your keywords and ad copy resonate with your audience - higher CTR means better relevance.
CVR measures how effectively your traffic converts into sales, reflecting the alignment between your ads, keywords, and landing pages.
CPA tracks the cost of acquiring a customer within each segment, helping you evaluate efficiency.
ROAS calculates profitability by dividing revenue by ad spend, offering a clear picture of financial performance.

Additionally, keep an eye on Average Order Value (AOV) to uncover segments that attract higher-value customers. Impression Share is another key metric, helping you identify profitable segments that might be limited by budget or bid constraints.

Different segments require different performance benchmarks. For example, branded keywords often generate higher CTRs and lower CPAs since these users are already familiar with your brand. On the other hand, non-branded or upper-funnel segments like "best running shoes for men" may yield lower immediate ROAS but play a crucial role in driving future sales. These segments should be analyzed over longer periods, incorporating assisted-conversion data for a more accurate evaluation.

To connect these metrics with real business outcomes, ensure accurate conversion tracking that transfers revenue data from your eCommerce platform into Google Ads. Integrating first-party data from your CRM can also help pinpoint which segments attract high-lifetime-value customers. For instance, a segment with a slightly lower ROAS but higher repeat purchase rates might be more valuable than one with higher ROAS but lower margins. Case studies consistently show that refining segmentation can lead to measurable improvements in revenue and ROAS.

Test and Refine Your Keyword Segments

Once you’ve identified performance trends, the next step is to refine your segmentation through targeted testing. Use A/B testing to isolate what changes improve results. For example, within a single segment, create 2–3 ad variations that differ by only one element - such as the headline, benefit statement, or call-to-action. This approach ensures that any shifts in CTR or CVR can be directly attributed to the change.

For landing pages, test variations by directing traffic from one segment to two different page designs while keeping ads and bids consistent. Measure which page delivers better conversion rates. You can also test new match types or split high-volume keywords into separate ad groups to refine query quality. Continue running tests until each variation has gathered a few hundred clicks for reliable data.

Review your segments weekly, comparing metrics like CTR, CVR, CPA, and ROAS against your benchmarks. Scale up successful segments by increasing bids, budgets, or even broadening match types. For underperforming segments, consider revising ad copy, narrowing your keyword list, adding negative keywords, or optimizing landing pages. Segments that consistently waste ad spend may need to be paused or deprioritized. Regular testing and adjustments improve the accuracy and effectiveness of your campaigns over time.

Every month, assess whether high-volume groups need further splitting, check for seasonal trends, and ensure there’s enough data to make informed decisions. Use your search terms report to identify high-converting queries and move them into dedicated ad groups. Similarly, add poor-performing queries as negative keywords to maintain a sharp and efficient segmentation strategy. By staying proactive, you can keep your campaigns well-optimized and aligned with your goals.

Conclusion

Keyword segmentation is at the heart of a successful Google Ads campaign. By aligning ad groups with user intent and product categories, it not only boosts ROI but also cuts costs significantly - up to 20–30% in competitive markets. This approach improves Quality Scores and ensures your ad budget targets shoppers actively searching for your products, rather than being wasted on irrelevant clicks.

Case studies highlight the impact of effective segmentation, with revenue increases of up to 2.3× and ROAS improvements of 50%. These results show how precise targeting and structured campaigns can drive sustainable growth without compromising efficiency.

The process starts with aligning your campaigns to your website's structure, grouping highly relevant keywords, and using negative keywords to filter out unqualified traffic. Advanced techniques, such as Single Keyword Ad Groups (SKAGs) for high-intent terms or catch-all ad groups for broader discovery traffic, can further refine your strategy. Each of these steps enhances your campaign’s accuracy and ROI.

To keep your campaigns performing at their best, make regular adjustments based on search term reports. Monthly reviews can help you identify high-converting queries to move into dedicated ad groups, while underperforming terms can be added as negatives. This ongoing optimization ensures your campaigns stay sharp and continue to align with evolving market trends and customer behavior.

Whether you're starting with basic segmentation or diving into advanced tactics, these strategies provide a clear roadmap to maximize your ad spend. By implementing these methods, you’ll not only minimize wasted budget but also position your campaigns for measurable growth and success.

FAQs

How does keyword segmentation help eCommerce businesses improve ad performance and ROI?

Keyword segmentation allows eCommerce businesses to craft ads that align closely with customer intent and specific product categories. This approach ensures ads are more relevant, which can lead to better click-through rates and stronger engagement with potential buyers.

By grouping and targeting keywords strategically, businesses can make smarter use of their ad budgets. They can focus on high-performing keywords while cutting back on spending for terms that are too broad or irrelevant. This not only trims wasted ad spend but also boosts conversion rates, helping to get the most out of every advertising dollar.

What are the best practices for organizing keywords by match type in Google Ads?

To keep your keywords well-organized by match type, set up separate ad groups for broad, phrase, and exact match keywords. This approach helps you manage your budget better while reaching audiences with different levels of intent. Here's how each match type works:

Broad match: Great for uncovering new search terms and expanding your reach.
Phrase match: Useful for targeting searches that are somewhat specific but still allow flexibility.
Exact match: Ideal for focusing on high-intent searches with precise targeting.

It's best to avoid mixing match types within the same ad group. Doing so can lead to budget inefficiencies and make it harder to analyze performance accurately. Make it a habit to regularly review and refine your keyword groups to ensure they align with your campaign objectives and deliver optimal results.

What’s the best way to use negative keywords to improve my Google Ads performance?

Negative keywords play a crucial role in fine-tuning your ad campaigns by helping you eliminate irrelevant searches and cut down on wasted ad spend. To get started, make it a habit to review your search term reports regularly. Look for any irrelevant queries that don’t align with your goals and add those to your negative keyword list.

For broader control, consider using broad match negative keywords to filter out entire categories of traffic that don’t convert. On the other hand, use exact match negatives when you need to block highly specific terms that aren’t performing well.

Make sure to keep this list updated as you analyze performance data. Pay attention to how these changes affect your campaign outcomes. By consistently optimizing your negative keywords, you’ll boost ad relevance, attract more qualified traffic, and get the most out of your advertising budget.