What You Can Expect from Google’s New Shopping Changes

Published August 23, 2012 Share

Google really wants to help shoppers find what they are looking for when performing a search (OK, maybe they want to make a few extra bucks, too). So, as you probably have heard, they are raising the stakes a little. They are asking online retail sellers to pay for product listings that used to be free in the Google search results.

Now you, as an online merchant, and Google have something in common. You both want to make it easy for shoppers to find your products (and you want to make a profit).

So, what’s an online merchant to do? First of all, don’t panic. (That’s good advice for any occasion, don’t you think?)

While you may have to carve out a little more budget to pay for your Google product listings, now called Product Listing Ads (PLAs), there are some upsides. Initially, competition will fall away, meaning more traffic for the remaining merchants who pay. And because the new model appears to put more focus on product features, as opposed to price, brands—with their extensive product data—should have a better chance of appearing in the results. Plus, other enhancements have given merchants more control over the product information.

But, more importantly, these changes should make your marketing spend even more effective.

For example, the Shopatron Online Marketing team manages product data feeds for more than 800 brands in Google’s Merchant Center. Two years ago, when Google first introduced the concept of Product Listing Ads, we were an early testing partner, running product data feeds on a cost-per-acquisition (CPA) basis. And we found that those ads resulted in a great ROI, in some cases more than $15 in sales for every $1 in spend.

While it’s difficult to say exactly why this ad format has performed so well, there are a couple of contributing factors. First: PLAs get prominent placement on the Search Engine Result Pages (SERPs)—that prime digital real estate in the upper right-hand corner. Second: The listings are very inviting, providing enough product information for shoppers to make an educated click. For this reason, PLAs receive nearly 20% of product-related clicks (according to Wordstream).

Basically, Google has stacked the odds in their favor. (If that surprises you, then I have a bridge in Brooklyn I can sell you at a great price.)

“So,” you ask, “how can I take advantage of Google’s greed?”

Good question. When we passed this to our head of online marketing here at Shopatron, he noted that we are taking the following actions for all of our customers:

• Transitioning top-performing Google shopping feeds into AdWords-powered product-listing ads, driven by CPC-based bids. 
• Exploring ways to transition several hundred product feeds into AdWords-powered CPA-based product-listing ads.
• Testing and enhancing product data feeds with some of Google's new optimization specifications, such as adwords_labels and adwords_grouping. 
• Comparing traditional Google Shopping and Product Listing Ad traffic quality and conversion rates. (Early signs show that AdWords-powered PLAs can be purchased at a comparable ROI to other keyword-based text advertisements.)

 
If you’re not a Shopatron client, he recommended that you should consider the following steps:

1. Understand how much traffic and sales Google Shopping is sending to your store. You can see this in Google Analytics under Traffic Sources > Campaigns > googleshopping
2. Consider that all of this traffic will be gone effective Oct. 1, 2012, just in time for the holiday shopping season.
3. Evaluate marketing budgets, and determine whether you can channel funds to Google to keep this traffic by paying for it. (Preliminary tests showed a 4-to-1 relationship, on average, between revenue and cost for this traffic. So, on average, to budget for $1,000 per month of revenue, it could cost $250 per month to maintain.)

If you are a Shopatron client, and you’d like to set up Product Listing Ads in Google AdWords, Shopatron’s Online Marketing team can handle the set up, optimization, and maintenance for you. Or, you can manage it on your own by creating a Google AdWords account and getting access to your Google Merchant Center product data feed that Shopatron has created for your products.

For a detailed overview of these changes, watch the webinar-on-demand, Google’s Major Shopping Changes: What You Need to Know or sign up for our soon-to-be released eBook on the subject.