Google Shopping is becoming a commercial product from February. Online businesses which currently enjoy lots of free traffic from Google Shopping product searches should be prepared for the new, pay-per-click model, as Google is phasing out free listings. From June, all Google Shopping results will be paid-for – and must take the form of product listing ads. ClickThrough’s head of content Ali Harris looks at five big things all online businesses need to know about the changeover.

The free ride is over. From February, Google will start to charge UK businesses to appear in Shopping searches.

By June, all Shopping results will be pay per click product listing ads.

The change-over has already been implemented in the US – and market analysts have keenly followed how the introduction of paid Shopping results and PLAs have affected online marketing.

With the UK switchover imminent, online businesses need to get their heads around the new Shopping ad format, as well, perhaps, as understanding the case for creating product listing ads.

Here are five must-know things about Google product ads, to help prepare for the change.

1. Free Google Shopping traffic is almost over

Online businesses can currently upload their entire inventory via a products feed in Google Merchant Center. For free. Any clicks resulting from a product return in the Shopping results page are free too. This is about to end. From February, Google will mix its Shopping results – some will be paid-for and some will remain free. After summer, businesses won’t get any more free traffic or sales from Google Shopping. It’s imperative to weigh up just how many sales Shopping is responsible for on your site – and make sure you protect that revenue as the service changes to PPC.

2. Product Listing Ads get way more clicks

Prior to monetising Shopping, Google introduced product listing ads as part of its suite of Product Ads. Unlike traditional Google advertising, product listing ads don’t rely on catchy ad texts or even keyword bids. PLAs return with a large product image (direct from the Merchant Center feed) along with relevant seller information, and price.

According to Google, these large, attractive ads generally attract twice as many clicks as standard text ads in the same position in the search results.

Recent research from Adobe, focusing on the Christmas period, found Google product ads attracted 34% higher clickthrough rates than text-based PPC ads.

3. PLAs convert more than text ads

Bid management provider Kenshoo found the conversion rate on PLAs to be 23% higher than with text ads in the US in Q4 – with conversions at around 2.49% on product ads, compared to 2.03% on text-based AdWords advertising.

4.Product Listing Ads cost less per click

Bid management provider Kenshoo split out the performance of product listing ads compared to text ads, and PLAs won hands-down.

The average return on ad spend (ROAS) was $4.82 for US retailers using PLAs, compared to $3.68 for text ads.

But more importantly, the cost per click of a PLA averaged at just $0.46 – compared to $0.59 on AdWords text ads.

5.  Tracking the success of Product Listing Ads is vital.

Google Shopping has always required businesses to upload their products feed via the Google Merchant Center. Google then uses the information contained in the feed to decide when to return relevant search results to users. Merchant Center will be ironically central to ad campaigns when Shopping switches to a paid-for model.

If your business hasn’t already got to grips with the Merchant Center, now is the time.

AdWords will still be crucial for setting up an ad campaign, and tracking its success.

In terms of grouping, Google has made it simpler for sellers to list their products within single, relevant ad groups: but technically, the more granular a campaign, the more PPC managers can control costs and push best-sellers.

It’s important to set up the ‘adwords_redirect’ attribute on URLs in your products feed, then set dynamic tracking in AdWords to stay on top of clicks and performance at product target or simply product level.

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About the author:

Alistair Harris is ClickThrough’s head of content. A double-award-winning senior journalist, Ali holds both the NCTJ and NCE qualifications and has more than ten years of experience in traditional press and PR. He has worked in digital marketing and SEO for the past three years and is passionate, enthusiastic and committed to quality.