On May 31st, Google announced changes to its shopping experience. By October 1st, the free Google Product Search and the paid Product Listing Ads (PLAs) will transition to a new paid model. The new experience is called “Google Shopping.”
What’s the difference? Most significantly, Google Product Search was free. Brands could submit products (with photos, prices, inventory, etc.) in the form of a product data feed; those products would then appear on Google Product Search and in the Google.com organic results.
Product Listings Ads—which are also being replaced by Google Shopping—are paid. They’re richer than traditional paid search ads, as they contain images and product price. Advertisers were charged on a cost-per-click (CPC) or cost-per-action (CPA) (the advertiser pays a percentage of the value of the purchases made after clicking through to the product page) basis.
Here is an example of (the soon to be old) Google search results page for the term “fishing vests.” The search generates results in both the free Google Product Search program (bottom left) and the paid Product Listing Ads program (upper right):
Google’s new experience, Google Shopping, will replace Product Search and Product Listing Ads. On Google.com, Google Shopping will look like this:
Key Differences between the Old Formats and Google Shopping
- On Google Shopping, advertisers will pay on a CPC basis (as opposed to a CPA basis for PLAs and no charge for Product Search). Like PLAs, ads will serve via a product feed through Merchant Center.
- Less duplication of listings (i.e. Product Search listings and PLAs will no longer show on the same search engine results page (SERP); only Google Shopping ads will show)
- Product images are now larger
- Ads occupy more prominent space
- Searchers can now refine product results by clicking on the “shop by type” links
- Advertisers will be able to include special offers in the ads (like “30% off”)
- Advertisers can now add a Google Trusted Stores badge to the ads. The badge provides searchers with info on the merchant, like shopper ratings for on-time shipping or customer service.
- New Google Shopper mobile app
- Specific product searches may show additional information on the product, like reviews and product attributes:
Why the Change?
Google noted, “We believe that having a commercial relationship with merchants will encourage them to keep their product information fresh and up to date. Higher quality data—whether it’s accurate prices, the latest offers or product availability—should mean better shopping results for users, which in turn should create higher quality traffic for merchants.” Additionally, Eric Best, CEO of Mercent, told The Wall Street Journal that Google could realize $1 billion in incremental annual revenue from the change.
Advertiser Requirements (Timeline)
- Now: Advertisers can now opt in to the new experience by signing up for Product Listing Ads and opting in their shopping feeds to Google Shopping
- June 30th: Google will roll out the new Google Shopping experience. Google Product Search listings will remain, although traffic from the listings will likely decrease due to the prominence of Google Shopping ads.
- Aug. 15th: If advertisers opt in to the new experience by this date, they’ll receive a ten percent discount on their product ad spend from July 1st to Dec. 31st
- Oct 1st: Google Product Search listings will disappear. Product search will be a fully paid experience; all product traffic will come from the new Google Shopping paid ads.
Our Optimization Strategy
At Performics, we’ve monetized both the free Google Product Search listings and the paid Product Listing Ads for our clients. For our retailers, both listing types have been an important traffic source with strong conversion rates. Recently, Google began requiring more detailed product feeds for Google Product Search listings. For our clients, more detailed feeds increased relevancy. Greater relevancy led to a decrease in traffic from Google Product Search, but an increase in conversions.
The new Google Shopping experience—which incorporates more product details—will further promote relevancy, which should lead to even greater conversion rates for our clients. The fact that Google Shopping ads will clearly be labeled as “ads” will also foster relevancy. Furthermore, advertisers can now include offers, which will help drive sales (especially during holiday when searchers seek deals).
Google Shopping, as a product, falls somewhere between paid search, data feed optimization and SEO. All these strategies will likely determine where the ads rank. At Performics, we’ll utilize our experience in all these channels to optimize Google Shopping ads.
Recommendations for Advertisers
- Allocate additional budget to Google Shopping. We believe that increased costs will be offset by increased conversions.
- Opt in to the new experience as soon as possible. Advertisers that start testing now will have the upper hand come holiday. Use back-to-school as an opportunity to test creative (copy, offers, images, badges) for conversions. Test and optimize bid strategy by category and product.
- Utilize the new Mobile Shopping app. Twenty-eight percent of all paid search clicks are now coming from mobile devices (Performics, May 2012), and we expect mobile traffic to skyrocket for retailers come holiday. Your brand’s mobile shopping experience will be critical for holiday.
- When forecasting traffic and conversions from Google Shopping, keep in mind that there’s additional variables at play now. Revenue driven through the old Google Product Search or PLAs may differ from Google Shopping revenue.