What is Ad Group?

An ad group is the container inside a campaign that holds targeting, a default bid and the ads themselves. Every keyword, product target and advertised product lives in one, and the search term reports you optimise from are attributed at this grain.

Where each setting lives

The hierarchy is account, then campaign, then ad group, then the targets and ads inside it. The split matters because you cannot fix at one level what is set at another.

A useful mental model: campaigns hold settings, ad groups hold targeting, products own performance. A bid you set on a keyword overrides the ad group default for that keyword. Negative keywords can be added at both campaign and ad group level, so you can block a term across a campaign or only in the group where it is wrong. Negative product targets in Sponsored Products sit at ad group level only, which is worth remembering before you assume a block is account-wide.

Why grouping decisions are economic, not tidy

An ad group carries one default bid and one set of targeting, but each product inside it has its own price, its own margin and its own conversion rate. Put two products in one ad group and a single bid has to serve both, while the reported conversion rate becomes a blend that hides the difference.

Worked example

Suppose an ad group advertises two products against the same keyword. One sells for 40 pounds, the other for 15 pounds. What a click is worth is set by revenue per click, so the two products justify very different bids on the identical search. A single bid either overpays for the cheaper product or underbids the better one, and the group's blended conversion rate will not tell you which is happening.

Before putting products together, check that they share four things: budget needs, placement behaviour, bidding strategy and target ACoS. Any real divergence is an argument for separate ad groups. Our default is single-product ad groups, on the grounds that the reporting stays readable and the bid stays meaningful.

Sponsored Brands ad groups

Sponsored Brands works differently in one respect worth knowing. Keep one creative per ad group. When a group carries several creatives, impressions concentrate on one of them, so a multi-creative group is not a clean test. If you want to compare two headlines, isolate them.

Splitting is not free traffic

Creating more ad groups does not create more impressions. Most problems that look structural are bid problems wearing a structural costume, so run the bid audit before restructuring. The best structure you cannot operate loses to the simpler one you can.