Mastering Google’s New Pay-to-play model for shopping

By Irina Bukatik

When Google rolled out a new paid-for format of its Shopping search function on 13 February 2013 in the UK, it ended what was previously a free arrangement for online marketers. Full transition is expected to take until the end of June 2013.

Google Shopping is based on the Product Listing Ad (PLA) format – search-related ads that incorporate richer product information, including images, prices and retailer names, without requiring additional keywords or ad text. So, when a Web user enters a product-related search query, they will be presented with the most relevant products along with the associated image, price and product name. This post from Google gives more information on PLAs.

Why paying pays off

Some retailers may be a little dismayed at first to now have to pay for a service that they previously enjoyed for free, but Kenshoo’s own studies from the US demonstrate that PLAs can have a greater impact than text-based ads:

– Click-through rates (CTRs) were 73 per cent higher

– Conversion rates (CVRs) were up by 35 per cent

– Cost-per-click (CPC) was a third (36 per cent) lower

– Overall return on ad spend (ROAS) was almost a half (46 per cent) higher

Following the launch of the new PLAs in the UK, retailers may see an impact on their text ads’ activity as users begin engaging more with new PLAs – and less with text-based ads. Increasing the activity on PLAs will allow retailers to mitigate such impact, as well as increase their visibility on search engine results pages (SERPs) with opportunities to feature in organic listings as well as text and product ads.

So what best practice should retailers follow to make the most of the new Google Shopping?

Google Shopping best practice

PLA optimisation is a four-phased approach:

1) Retailers should make sure their feed content is optimised for products and includes user-relevant information in fields such as title, description, image, etc. These influence the likelihood of being shown on the page, as well as help stand out among the group of PLAs when they appear to the user

2) We recommend using a PLA-specific bidding strategy, accounting for the nuances of PLAs versus text ads bidding, such as the lack of position for PLAs. Product-level performance information is essential to bidding decisions and most granular optimisation

3) It is important to add negative keywords in the PLA campaigns, to ensure better relevance of the ads and reduce costs

4) Make the most of the Promotional Line – the text you can add under the pricing line. While product-specific information helps reduce irrelevant clicks, the Promotion Line can help drive more relevant clicks, such as “Free Shipping” or “10% off today only”

We also believe that UK retailers that adopt PLAs early will enjoy less expensive rates initially – since fewer people will be buying PLAs at first, CPCs will be lower. And obviously, it is important to always track performance in order to fine tune PLA campaigns.

PLAs are here to stay

As a paid-for service, there is going to be much more incentive for retailers to ensure the most current, accurate information is maintained on their product feeds. This should mean shoppers have more trust in Google Shopping and will be more likely to use it – producing more clicks and conversions for retailers.

PLAs allow retailers to reduce the number of the non-relevant clicks, by exposing product-specific information, such as price, in the ad. They also enable retailers to be far more creative and visual in their paid ads. They can look forward to improved click-throughs and conversions while reducing their overall campaign costs. We really believe PLAs provide great opportunities for retailers and they should at least experiment early on rather than wait.

To learn more about mastering Product Listing Ads, please visit PLA.

About the author

Irina Bukatik is Senior Product Manager at Kenshoo. Kenshoo is a digital marketing technology company that engineers premium solutions for search marketing, social media and online advertising. Brands, agencies and developers use Kenshoo Enterprise, Kenshoo Local and Kenshoo Social to direct more than £16 billion in annual client sales revenue.

The Kenshoo Universal Platform delivers automation, intelligence, integration and scale to make better marketing investments. With campaigns running in more than 190 countries for nearly half of the Fortune 50 and all 10 top global ad agency networks, Kenshoo’s UK clients include Accor, Burberry, GroupM, Havas, John Lewis, Omnicom and Tesco. Kenshoo has 16 international locations and is backed by Sequoia Capital, Arts Alliance and Tenaya Capital.

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