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Google Moving Free Product Search to Paid Product Listings Ads

Background:

On May 31, Google announced that Google Product Search (formerly known as Google Products and Froogle) is moving to a paid inclusion model now known as Google Shopping. The change will integrate Google’s Product Listing Ads (PLAs) into search results and the Google Shopping page, and should be fully in place this fall.

How it Works:

PLAs are search ads that include richer product information, such as product image, price and merchant name, without requiring additional keywords or ad text. All of the data used to create the ads comes from a product feed supplied by the advertiser. Whenever a user enters a search query relevant to an item in an advertiser’s product feed, Google will automatically show the most relevant products along with the associated image, price and product name.

PLAs have the ability to show in the top position and the right corner of the search engine results page (SERP), similar to AdWords text ads.  Clicks on PLAs are charged on a cost-per-click (CPC) or cost-per-action (CPA) basis, where the advertiser can set bids by product type. Achieving a top ranking on the SERP will depend on a combination of relevance and bid price.

PLAs are managed through the AdWords user interface, but operate as a separate auction from standard paid search ads.  This means advertisers may be able to have both a paid search text ad and PLA on the same SERP.

Google Shopping will incorporate Google Trusted Stores badges into the listings, for those merchants who participate in the program. Google has already been testing the use of these badges within AdWords today.

Google also says the new Google Shopping listings will be able to include merchants’ special deals or offers by providing that information within the same data feed.

The Update to Product Listing Ads

The new format will display paid product listings in the top rail and right columns mixed into text ads. All PLAs will now be managed within the AdWords interface with separate ad groups for management and placement targeting.

With this update Google’s algorithm values relevancy rather than keyword bids, which was used prior to the update. It is important for advertisers to understand the implications of this algorithm change as it could results in a change in performance based on product feed quality. Initially, traffic volume may decrease once the transition begins, but will begin to increase once the transition is deployed in stages

Resolution POV:

The expansion of PLAs should create a significantly-increased presence of product-based ads within the regular search results page, with the goal of providing more product-level information for searchers directly on the Google SERP.

It is anticipated that Google PLAs will continue to be a top performer among comparison shopping engines (CSEs) with the ability optimize CPC bids based on higher and lower performing ads within AdWords.

Key benefits:

1)     More traffic and leads

  • Many businesses receive significantly higher click-through rates (CTRs) with PLAs compared to standard text ads shown in the same location for shopping-related searches. In some cases, advertisers have experienced double or triple standard click-through rates.

2)     Easy management

  • With product targeting, advertisers won’t need to use keywords. Based on the product targets the advertiser sets up, an advertiser’s PLAs are matched with the most relevant searches using information provided in their Google Merchant Center account.

3)     Broader reach

  • More than one of an advertiser’s PLAs can appear for a given search, and if relevant, a PLA and a standard text ad can also appear at the same time. This means an advertiser can have two opportunities to connect with shoppers for a single search and will have the ability to test coordinating different messaging to drive the best overall performance.

Points of Consideration:

1)     Lack of ability to manage bids at a granular level

  • Bids are set at an ad group or “product target” level, so each product or SKU cannot have distinct bids. Each product will need to be organized into a group of products for bids to be set and optimized.

2)     Unknown quality score

  • Google stresses a high quality feed with proper titles and Meta data, but unlike text based search a quality score isn’t provided for advertisers to know how relevant their products are in a feed.  However, based on Google’s rollout of other new products, we typically see additional reporting and transparency added into AdWords over time.

3)     Limit on descriptive ads

  • PLAs offer the ability to write a short description in each Ad Group, such as a promotion, but unique ad copy comes from the feed description rather than offering the flexibility for tailored, descriptive, call-to-action ad copy.

Summary

PLAs are designed to capture searchers who are specifically looking for products and that have a shopping intent.  Thus, Google has focused on providing product-specific information in the PLA format versus general branding or other messaging.  As a result, retail advertisers should expect this ad format to deliver strong direct response results.

While the level of control around bidding and ad copy is not quite as granular as paid search advertising, many of the same optimization concepts can still be applied.  For instance, the focus on quality and relevancy are important across both.  Further, given both ads can appear on the same SERP that provides the opportunity for testing around how best to coordinate text ads and PLAs around relevant shopping queries in order to drive the best overall performance for advertisers.

Next Steps

Google plans to test and roll out the new format over the summer and complete the change during the fall. Consumers using Google to shop will soon be seeing a revised format as the search engine experiments with how it lists information and ads for consumers doing searches with purchase intent. For example, a shopper looking for appliances now generally sees paid AdWords ads at the top of the search results page — followed by free search listings and free Product Search listings.

According to an example provided by Google, the new format might include fewer text-based AdWords ads at the top, followed immediately by paid PLA listings.