Google to Enable Local Inventory Ads by Default in Standard Shopping Campaigns: What Advertisers Need to Know

Google is implementing a major update to how retail advertisers manage brick-and-mortar product promotion. Starting August 31, the search giant will automatically enable Local Inventory Ads (LIAs) by default within Standard Shopping campaigns that are linked to Google Merchant Center accounts with the LIA add-on active.

As part of this transition, Google is deprecating its legacy, campaign-level "Local products" setting. In its place, the company is introducing a centralized "Inventory filter" designed to streamline how advertisers segment online and in-store product feeds.

This change represents a shift in Google’s retail advertising ecosystem, continuing a multi-year trend toward automation, simplified campaign structures, and default-on features. For search engine marketing (SEM) professionals, retail brands, and digital agencies, this update requires immediate attention. Advertisers who maintain distinct, segmented budgets for e-commerce and physical store locations must audit their campaign settings prior to the August deadline to avoid unexpected budget reallocation and shifts in performance.

Main Facts: Deconstructing the LIA Update

To understand the impact of this update, it is necessary to examine how Google Merchant Center (GMC) and Google Ads interact under the new framework.

The Core Mechanism

Previously, if a retailer wanted to run Local Inventory Ads—which showcase real-time in-store product availability, pricing, and store hours to nearby searchers—they had to complete a multi-step process:

1. Enable the Local Inventory Ads program within Google Merchant Center.
2. Upload a local products feed and a local product inventory feed.
3. Link the GMC account to Google Ads.
4. Manually opt into "Local products" at the campaign level within their Standard Shopping campaigns by checking a specific box in the campaign settings.

Under the new system, Google is removing step four. Beginning August 31, any Standard Shopping campaign linked to a GMC account with the LIA add-on active will automatically serve Local Inventory Ads by default.

Deprecation of the "Local Products" Setting

The legacy checkbox that allowed advertisers to turn local products on or off at the individual campaign level will be permanently retired. Instead, Google is consolidating this control into the Inventory filter.

The Inventory filter will serve as the primary mechanism for directing traffic. Advertisers who want to restrict a campaign to only online products, or conversely, only local brick-and-mortar inventory, must use this filter to segment their products using the following attributes:

• Channel = "Online": Restricts the campaign to traditional e-commerce listings.
• Channel = "Local": Restricts the campaign to Local Inventory Ads showcasing physical store stock.

If no filter is applied, the campaign will default to a hybrid model, dynamically serving both online and local ads depending on the searcher’s proximity to a physical retail location and the relevance of the query.

Chronology: The Evolution of Google’s Local and Retail Search

This update is not an isolated change; it is the latest step in a decade-long evolution of how Google connects digital search intent with physical retail footprints.

[2013-2014] Google launches Local Inventory Ads (LIAs)
      │
[2018-2020] Pandemic accelerates BOPIS (Buy Online, Pick Up In Store) & "Near Me" searches
      │
[2021-2022] Performance Max (PMax) launches; automated local formats gain dominance
      │
[Mid-2024] Google announces deprecation of legacy "Local Products" setting
      │
[Aug 31] Hard deadline: LIAs enabled by default via the new Inventory Filter

The Genesis of Local Inventory Ads (2013–2014)

Google first introduced LIAs to address a growing consumer behavior: searching online to verify if a product is available nearby before leaving the house. Initially, setting up LIAs was a highly manual, technically demanding process that required frequent inventory feed updates (often daily or multiple times per day) to ensure accuracy. Because of this complexity, LIAs remained a premium tool used primarily by large enterprise retailers with sophisticated enterprise resource planning (ERP) systems.

The Rise of Omnichannel and Hybrid Shopping (2018–2020)

With the rapid expansion of mobile search, "near me" queries skyrocketed. The COVID-19 pandemic accelerated this trend, making features like "Curbside Pickup" and "Buy Online, Pick Up In Store" (BOPIS) standard consumer expectations. Google responded by lowering the barrier to entry for LIAs, introducing "Local Store-Fronts" hosted by Google, and simplifying the merchant verification processes.

The Automation Era and Performance Max (2021–Present)

In recent years, Google’s product roadmap has prioritized automation, consolidated campaign types, and machine learning-driven bidding. The launch of Performance Max (PMax) campaigns shifted the focus away from manual channel segmentation. PMax campaigns natively combine Search, Display, YouTube, Maps, and Discover, dynamically serving both online and local formats to maximize total conversion value.

Standard Shopping campaigns, however, remained a critical tool for search marketers who required granular control over bidding, search term targeting, and budget distribution. By changing the default settings of Standard Shopping campaigns to automatically include LIAs, Google is aligning its legacy shopping format with the automated, omnichannel philosophy that underpins its newer campaign types.

Supporting Data: Why Omnichannel Integration Matters to Google

Google’s decision to make LIAs the default experience is supported by consumer search trends and retail performance data. Omnichannel shoppers—those who interact with a brand both online and in-store—are highly valuable to retailers.

Consumer Search Behavior

According to Google’s internal consumer insights:

• Searches for "in stock" near me grew significantly over the last several years, as consumers look to avoid wasted trips to physical stores.
• Over 70% of shoppers state they are more likely to visit a physical store if they can confirm inventory availability online beforehand.
• "Near me" mobile queries show high commercial intent, with a significant percentage of those searches resulting in a physical store visit within 24 hours.

Retail Performance and ROAS

Industry benchmarks consistently demonstrate that combining online and offline bidding strategies yields superior results compared to siloed approaches:

By making LIAs the default setting, Google is positioning its platform to automatically capture this high-intent local traffic for retailers who may have previously neglected to configure local ads, thereby lifting overall platform ad engagement and merchant revenue.

Official Responses and Expert Perspectives

The transition was first identified and shared publicly by PPC specialist Arpan Banerjee, who posted a screenshot of the notification email sent to Google Ads manager accounts on LinkedIn.

In the notification, Google explained the reasoning behind the change:

"To simplify campaign management and remove duplicate settings, we are consolidating how local inventory is managed within Standard Shopping campaigns. By moving these controls to the Inventory filter, we are eliminating overlapping settings and streamlining the configuration process for merchants."

Industry Reaction

While Google presents this update as a user-friendly simplification, the professional search marketing community has reacted with a mix of caution and strategic preparation.

Many PPC practitioners point out that "default-on" updates can lead to unexpected consequences if not actively managed.

• The Risk of Budget Dilution: For retailers with limited budgets, enabling LIAs by default could shift ad spend away from high-converting national e-commerce campaigns toward local store traffic, which may or may not align with their current business priorities.
• Feed Desynchronization Issues: If a merchant’s local inventory feed is not perfectly synchronized with their physical shelves, serving LIAs can lead to poor customer experiences—such as a customer seeing an item marked "in stock" online, driving to the store, and finding it sold out.
• The Positive of Streamlining: On the other hand, agency leaders have welcomed the consolidation. Managing overlapping settings between Merchant Center and Google Ads has historically been a source of friction. Centralizing this under the "Inventory filter" simplifies the training of junior media buyers and reduces the likelihood of human error during campaign setup.

Strategic Implications: Actions Advertisers Must Take

The August 31 deadline leaves a tight window for digital marketers to audit their accounts. To prevent disruptions in campaign performance, advertisers should execute a structured transition plan.

1. Audit Merchant Center and Google Ads Links

First, identify which Google Ads accounts are linked to Merchant Center accounts that have the Local Inventory Ads add-on active. If a Merchant Center account does not have the LIA add-on enabled, its linked Standard Shopping campaigns will remain unaffected by this update. However, if the LIA add-on is active, action is required.

Step 1: Check GMC for Active LIA Add-on
  │
  ├──► No LIA Add-on Active ──► No immediate action required
  │
  └──► LIA Add-on Active
        │
        └──► Step 2: Review Campaign Setup
              │
              ├──► Want Hybrid (Online + Local) ──► Leave default settings
              │
              └──► Want Segmented Budgets
                    │
                    └──► Step 3: Apply Inventory Filter
                          ├──► Campaign A: Channel = "Online"
                          └──► Campaign B: Channel = "Local"

2. Determine Budget Segmentation Strategy

Advertisers must decide how they want to allocate their ad spend:

• The Hybrid Approach (Default): If you are comfortable with Google dynamically allocating your budget between online shoppers and local foot-traffic prospects based on proximity and search intent, you do not need to make any changes. The system will automatically serve the most appropriate ad format.
• The Segmented Approach (Recommended for Tight Control): If you manage separate budgets for e-commerce and brick-and-mortar operations, or if you require distinct return-on-ad-spend (ROAS) targets for online sales versus store visits, you must actively configure the Inventory filter.

3. Step-by-Step Implementation of the Inventory Filter

To maintain strict segmentation after the legacy settings are retired, follow these steps within the Google Ads interface before August 31:

1. Navigate to your Standard Shopping campaigns.
2. Select the campaign you wish to modify and go to Settings.
3. Locate the Inventory filter section.
4. Apply a filter based on the product feed attributes:
   • For an e-commerce-only campaign: Set the filter to Channel = Online.
   • For a local-store-only campaign: Set the filter to Channel = Local.
5. Save your changes.

4. Review Smart Bidding and Attribution Settings

If you allow your campaigns to transition to the default hybrid model, you must ensure your Smart Bidding strategies are optimized to value both online conversions and store visits.

If your bidding algorithm is set to maximize online sales conversion value but is suddenly serving local inventory ads, your bidding efficiency may decline unless you assign an appropriate monetary value to "Store Visit" conversions in your Google Ads conversion settings.

Conclusion: Preparing for an Omnichannel Future

Google’s transition to default-on Local Inventory Ads represents a logical step in its ongoing platform simplification strategy. By removing the legacy "Local products" setting and utilizing the unified Inventory filter, Google is nudging retailers toward an integrated, omnichannel advertising model.

While this change reduces administrative complexity for some, it introduces tactical risks for advertisers who rely on precise budget segmentation between digital and physical storefronts. Marketers must act before the August 31 deadline to review their Google Merchant Center integrations, audit their Standard Shopping campaigns, and implement the necessary Inventory filters to ensure their ad spend remains aligned with their broader business objectives.