What online sellers used to know separately as Google Product Search and Product Listing Ads are now being merged into one entity called Google Shopping. And, as you probably know, while Google Product Search was a free, organic search offering, Product Listing Ads is a paid ad format. Now all sellers participating in Google Shopping will have to use the pay for performance model.
So, while sellers still can benefit from free, organic results on Google.com, those who were previously using the free Google Product Search and want to have their products show up in Google Shopping may have questions as to how to most effectively navigate the new world of bidding for their ads.
EcommerceBytes spoke with Google’s Vice President of Product Management, Sameer Samat, about how Google Shopping is different, how sellers can best take advantage of the new model, and how to get started with it.
Behind the Move to the New Google Shopping
“In our new world, we are technically creating one product called Google Shopping,” said Samat. “You participate in that product as a merchant by submitting feeds, just the same way you’d done before,” he explained, but now also by attaching bids to your products. “And then we have a new UI (User Interface) on Google,” he said.
The promised benefits of the new Google Shopping program are more reliable information for shoppers and the ability to find and compare products more easily along with specials and deals.
Samat said that in the past, the information shown to the user through Google Shopping did not always match what was shown when the user clicked though to the seller’s site. “One of the things that we found was that it’s extremely important that the information we show to the user on Google matches what the user finds when they click to the landing page of the merchant’s web site.” He said one of the most troubling examples of mismatches was around price. For example, when the price of an item was $49.99 for a particular merchant on the results page, “but when you click through it’s really $59.99.”
“That obviously is not good for the user,” he said. “They don’t feel like buying at that point, and they typically will click back into Google to find someone else, as opposed to completing the conversion right there.”
He said that while it was not a blanket statement, there were some “bad actors” out there, and some “folks who just make mistakes.” So, he said, where this was a free organic product previously (Google Product Search), it wasn’t always to the merchant’s advantage to get that click if the information wasn’t perfectly accurate.
When to Use Google Shopping Instead of Google Adwords
Samat says the benefit of Google Shopping vs. Google Adwords is that “if you have thousands or hundreds of thousands of SKUs, it can be daunting to manage keyword campaigns that are optimized for all of those different products.” In this case, the Google Shopping format may be the best choice for you, he said.
“If you are a merchant who is retailing any number of products, and you don’t feel like you can create highly targeted keyword campaigns for every single one of your SKUs, Google Shopping is a great option (vs. AdWords) because Google uses its algorithms to help show your products for the relevant queries at the right time,” said Samat.
With Google Shopping, says Samat, Google tries to show very relevant advertising for any type of queries a user would type in. “We’re finding that for product-oriented queries, it is really helpful for users to see specific products that are offered from a merchant, along with pictures and prices and price ranges for those products.”
Above: a look at creating a new Product Listing Ads Campaign for Google Shopping.
Samat said that Google Shopping’s keyword-less bidding simplifies the advertising process greatly, especially for small sellers who may not have a large staff, or any staff. “In Google Shopping, you don’t have to bid on keywords. You simply list your product, and you identify the bid you’d be willing to pay on a CPC basis, for example. Google then takes care of the rest. We show the products that are relevant to the query, and sometimes those keywords are obvious, and sometimes those keywords are not as obvious, but Google is able to come up with them because of all the data that we analyze.”
The challenge and difficulty of managing a lot of different keyword campaigns was part of the feedback Google got when designing the Google Shopping model. “So what we’ve done is build a system which actually works really well – it uses all the product search relevancy rankings capabilities that we’ve developed over the years to understand what products are going to perform best for the user when they perform any kind of product-related query,” said Samat.
“That’s the benefit to sellers frankly of all sizes but in particular to the small sellers who may not have time or the ability to manage large keyword campaigns across all their products.”
The Cost of Google Shopping: CPC vs. CPA
With Google Shopping, a merchant has a couple of options of how to pay for product ads. “All of it is underneath the “pay for performance” headline,” said Samat, which is “the traditional way Google advertising works.”
First, a merchant can choose to pay on a “Cost per Click” basis, or “CPC,” and they can set those CPC bids for their entire feed, said Samat. They can have one bid that is the same for the whole feed, or they can vary it so each individual product has a different bid, said Samat. “And that’s going to depend on the merchant and what they’d like to do.”
The other option is to pay on the CPA, or “Cost per Acquisition,” basis, which is when the seller pays only when the sale is actually made. “And they have conversion tracking in place, so they can pay Google a percentage of that sale, that they set in their bidding as well,” said Samat. That means CPA is not yet available to all merchants.
“Everything is pay-for-performance; there are no listing fees (under Google Shopping),” summed up Samat. “There’s no fee to upload your content to Google – there are none of those kind of fees.” Merchants would only pay when they receive traffic or make a sale.
The Pros and Cons of CPA
Since a merchant would only pay when a sale is made with the Cost per Acquisition model, wouldn’t that model be less risky for a merchant, and why wouldn’t they always use it?
Samat answered that while it was less risky in that sense, “a lot of smaller merchants don’t have robust conversion tracking capabilities on their site, when they can report back to parties like Google in a reliable way the sales they make and track that all the way back. So we at Google need to do a better job of providing tools there to make that easy.”
CPA involves more implementation, he explained. “At the beginning, it may make sense for a merchant to get started with CPC, as we make our CPA-based tools stronger,” he said. But he emphasized, Google is “very committed to providing tools to make that easier for smaller merchants.”
Key Product Attributes
A data feed for Google Shopping consists of a set of “Product Attributes,” such as Availability and Price, and Unique Product Identifiers such as UPC codes. Samat said that price and whether a product is in-stock are very important.
For example, buyers who click on a listing only to find out the merchant is out of stock, “it’s a problem,” he said. And he said another crucial attribute for merchants was to provide identifiers for Google to help match products to their catalog of products. For example, UPC codes for consumer electronics, or ISBNs for books. “These are very important; they allow us to really deliver a better experience as far as typing in a query for a particular book, or a particular electronic item. We can make sure that your listing is included in the catalog results that come back.”
Data quality of a feed is very important overall, said Samat, because “that improves conversion rates for merchants all around, and it also ensures that we all collectively have a better experience. Users will use this more, and that means more traffic for all of us.”
So are the Product Attributes under the new Google Shopping system the same ones merchants are used to from before when submitting their feeds to Google?
“Google Shopping is using a single set of feed specifications and policies, whereas we previously had separate policies and specifications for Google Product Search and Product Listing Ads. This means merchants who participated only in PLA before will likely need to send us more information, than they sent before because of the combined requirements.”
Sellers can find the complete list of attributes on the Google website.
eBay Sellers and Google Shopping
So if you sell primarily on eBay or another large marketplace that already sends product feed to Google, how would you know whether to use Google Shopping or not?
“Most marketplaces are already and will be continuing to send feeds to Google and advertising using Google Shopping” and setting bids on those feeds, said Samat, adding that eBay has been quite vocal that they intend to continue to do that.
But, he added, if you’re a merchant who also has your own website, “you could absolutely advertise. And we are also looking at whether or not we can make that process any easier for marketplaces, and sellers, if they want to have their items advertised on Google and go beyond what their marketplace provider is (doing),” he said.
How Do You Know What to Bid?
So how does a seller starting out know what to bid? “The tools there right now certainly will help you get a sense for what you should be bidding,” said Samat, “but my basic advice for that is, if you’re just starting out here, a great thing to start out with, especially as Google is going through this transition, is pick a number that you feel pretty comfortable with, knowing that, for example, the minimum bid is a cent, on a CPC basis.”
The maximum is “whatever you can dream up.” But Samat suggests sellers start small with a bid they are comfortable with; look at metrics like their existing click-through rates, average order value, and associated margins, and start with that – “don’t guess with that, but start with that. Let that run for some period of time, understand your performance, and you know you can modify appropriately.”
He also suggested merchants take advantage of the $100 credit Google is providing to get started – you can find the coupon on this page. “This is our way of just saying, we realize this is a big change. But we actually think this can work quite well, but it is going to take some time and investment on small sellers’ part, and it’s a good way of getting started. With a bid you feel comfortable with, see how it goes, modify from there.”
He said Google will be “constantly rolling out additional tools to help sellers predict what they should be bidding, optimize that, and generally make Google a really robust channel for them.”
Google will be providing videos and webinars on how to use Google Shopping, but one existing resource for sellers about how to get started with PLAs is at Google Shopping’sGet Started page.
About the Author
Julia Wilkinson is the author of “The eBay Price Guide” (No Starch Press, 2006) and “eBay Top 100 Simplified Tips & Tricks” (Wiley, 2004-6). Her free “Yard Salers” newsletter is at available at YardSalers.net where you will also find her latest ebook,Flip It Again.
This Post was originally appeared in ‘Ecommerce Times’
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