Google Product Ads 2013 Trends – Google Shopping ROI Analysis

Google Product Listing Ads, aka Google PLA aka Google Shopping are probably the hottest topic on online marketing in recent months.

Paid Google Product Listing Ads
Ever since Google moved to paid Product Listing Ads, they have captured attention of online marketers due to its placement, displaying product image, and obvious differences from typical adWords text ads. More importantly, the cost on CPC basis has been very attractive despite the fact, marketers had to pay for what used to be free traffic. Only few complained, and the PLA s share of PPC budget has ever been increasing.

Quick word on Google Product Ads vs. Amazon Product Ads
At the least, it can be clearly stated that Google Products Ads in 2013 are proving to be more effective for marketers than Amazon Product Ads. Amazon algorithm is still not in par with that of Google’s on matching contextual keywords with products and displaying the Product Listing Ads in the most converting way for merchants. Amazon takes longer time to index the feed and to use it effectively within their webpages, which is very natural to Google. If readers are interested to learn more on direct comparison on Google PLA vs Amazon PLA, please leave a comment a the box below.

Google Product Ads 2013 Trends
Ever since Google took the path of having merchants pay to be listed in Google Shopping, it was worked wonders for the leader of online marketing (Google) themselves. Advertising dollars allocated to PLA have nothing but spiked. Google’s CEO is directly involved on the project, which shows the importance of this new technology to the Google as a whole from strategy point of view. Some of the Google Product Ads 2013 trends have been nothing but to improve the user interface in Google Merchant Tools, provide more information to marketers in terms of quality of data feed, and providing more prominent real-estate on Google search results page. Because of the intent to give high visibility to PLAs, Google has even shrunk the first page of search results on Google from 10 blue links to 7; meaning PLAs are taking the space where first 3 organic listings used to be. Hence, even SEO has been directly impacted by PLA, as before if your listing was #8 on Google, now it is pushed into second page. Being on top is now even more critical.

What’s happening inside Google Shopping Feed – How bottom line is changing for marketers?
What would be interesting to measure is if Google PLAs are actually helping the marketers? Here are some the recent trends and these numbers an well as 2013 trends on Google Shopping are changing fast. If you are in Google PLA arena, (first of all you should be and secondly,) you must be measuring these KPIs. Here are some of trends that is becoming visible:

  • Traffic from Google PLA is increasing consistently. Meaning, PLA are reaching out to more customers.
  • Bounce Rate from visits from Google PLA is slowly decreasing. It may translate to PLA are getting better and landing page more relevant. It may also mean, Google is doing better job in matching the search queries with the right product group. Note there is a significant difference between how adWords works and how PLAs work from matching point of view.
  • Total Revenue from Google PLA is increasing. This is the reason, marketers are finding it attractive.
  • Average Order Value (AOV) however is decreasing. Meaning, as # of transactions are increasing, customers are buying more products and probably smaller value products resulting in downward trend on AOV. This can be considered quite normal and as the program matures, it will stabilize at some point in future.
  • Finally, one of the very important factors for online marketers, cost per click on Google PLA is clearly on the rise. The increasing CPC is probably the biggest challenge to the attractiveness of the program. However, in a bid driven environment, where all the new marketers are trying to get into the action of Google Shopping, the bids are bound to go up. As competition rises, cost per click goes up, and so goes the cost per conversion.

PLA and AdWords  Cost Comparison
Despite the fact that average cost for Google PLA is increasing, it is still lower than the average cost per click of adWords. As the run-rate of average PLA CPC increases, at some point, adWords and PLA cost might get neutralized, however until then PLAs will not be out of steam.

To take the full advantage of Google PLAs, the best strategy for online marketers at this moment seems to be to keep an eye on Cost Per Conversion (or Cost Per Acquisition) on their product line by product category. As long as Cost Per Acquisition makes sense, Google PLAs should be fully utilized.

How to take advantage of Google PLA, given the  Product Ads Trends of 2013?

Like any other online marketing campaigns, measurement and optimization are the keys on success of PLAs. Here are some of the things that can be initiated for highest ROI on PLAs:

  • Feed Optimization:  Pay attention to Title, Description and image quality. Google Merchant Center is your friend.
  • As visits are increasing, full feed optimization is critical. Have copy writers work on those feeds.
  • Landing Pages Optimization: Destination URLs bring customers to the product pages or landing pages which must be relevant, products easy to find and easy to add to cart.
  • Price competitiveness is critical for success. Unit of measure has never been so critical as now.
  • As cost per clicks are increasing, bid management through adWords is becoming more and more critical, as it impacts the bottom line right away. So attention must be focused on reducing the cost (bids), and improving the CTR again by feed optimization.

Summary
As Google PLA is changing, online marketer must adjust to the new opportunities and challenges it is bring up. In a very short span of time, PLAs has impacted SEO, adWords PPC, and created a new channel in online marketing. One thing is certain, it’s working great for Google’s bottom line as marketers are working hard to capitalize on the new channel. However, as time goes by and more and more online marketers get into the Google Shopping bandwagon, the cost per click is slowing increasing and as a result cost per conversion is also increasing. Despite being lower cost per acquisition than other channels, it’s still very attractive, especially because the amount of traffic PLA is delivering is on the rise.

Google Product Ads 2013 trends present a recipe for optimization, testing and measurement on Google Shopping.

 

About Ujjwal Bhattarai

Ujjwal is an engineer by education, a programmer by hobby, and an internet marketer by choice. Other than 1 minute chess, and biking, his passion includes SEO, SEM/PPC, CRO, and Web Development. As a lifelong student of Internet Development, he is hopelessly addicted to Internet, and sincerely believes after fire, wheel, and decimal point, internet is the fourth most important invention in the human history. Catch up with him on Twitter at @uj2wal or at his Google+ .

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