So what the Hell does the Google Shopping Change Mean?

31 May

The cold hard truth is: Merchants pay more. But, smart merchants will do better that dumb ones; and I mean dumb in both the *not smart* and the lack of speech and by extension ability to communicate. Data feed, data quality and management, done in tandem with other Google products (ppc, Product extension ads, etc) is going to more important than ever before. Mercent  (warning!! shameless plug for the company I work for) has already rolled out support for the new changes (hey advance warning is whats what you get when they like you).

Important stuff:

This is a product ad program, There are no keywords, no keyword bidding. Keywords have been replaced by the product catalog. There are 4 crucial factors for Google Shopping: High quality content, product segementation, tracking and promotions. (all pretty good reasons you shouldn’t have this under your PPC business)

Google Product Search (prior GoogleBase, and originally Froogle) will fade from existence. Following a three-month testing and roll-out phase, Google will transition all product listings to a pay-for-placement model controlled through the Google Product Listing Ads (PLA) program. The new program is collectively branded Google Shopping. Read Google’s announcement here.

 

PLA is a unique program that shares characteristics of Comparison Shopping Engines (CSE), paid search, and SEO. PLA is different than paid text ads and, therefore, much different than paid search. Unlike AdWords, PLA rewards higher quality catalog data that essentially replaces the keyword library in determining the ad.

Given the size of this channel for most retailers, there is no time to lose in preparing for Google’s changes. Opportunities and risks abound. Mercent was a beta partner of Google Product Listing Ads at the origin of PLA two years ago. (hey if you  Since PLA widely launched last January we have led the industry in establishing best practices and developing industry-leading technology to extract the most retail advertising performance from the program. In fact, last night we deployed our latest release of the Mercent Retail platform which includes our newest feature, Mercent Retail for Google Shopping. This new feature was built via our close partnership with Google, and is specifically designed to enable efficient, high performance management of PLA.

Mercent is ready.

It is natural to first consider the loss of low-cost traffic that Google’s change will cause. While we lament the loss of Google Product Search as a major source of ecommerce traffic with no attached media spend, there are several reasons to be optimistic about the evolution. From a consumer point of view, Google is reducing clutter and low-quality “spam” listings from fringe advertisers. For retailers, the pay-for-performance hurdle will reduce competition and increase the signal-to-noise ratio for legitimate product listings. This change also creates a more level playing field for smaller retailers and brands to compete against bigger rivals whose sheer size may have provided a leg up in relevance.

Importantly, note that the volume of highly qualified shopper traffic on Google is still as large after this change as it is now. In fact, we believe the overall demand generation opportunity for retailers on Google will grow beginning this fall as Google has greater incentive to expand the program. It boils down to this: like the launch of PLA last January, this change presents a great opportunity to drive sales from Google. It will not be free, but to those ready and willing this is a golden opportunity to beat your competitors to the consumer.

To keep your sales on Google Shopping and, better yet, to steal share from your competitors this holiday, here’s what we recommend you do to prepare:

1. Send/continue to send your feed to Google via Mercent. Continue to optimize your feed content. Continue to improve feed quality. PLA performance is founded first and foremost on the quality, accuracy, and timeliness of your product data. These are all core competencies of Mercent and they are necessary conditions for success in PLA.

2. Closely examine your budget and, if possible, increase your budget for PLA / Google Shopping.

a. First, we are happy to help you work through this as we know this is a major wrench in everyone’s forecast and budget plans. Nevertheless, setting or resetting your budget for Google Shopping is a necessary step.

b. Begin ramping this budget (to replace and/or grow GPS) in July and expect it to be fully scaled for Q4 and the holiday shopping season.

c. Use PLA performance history to guide expected efficiency.

d. In setting budget, also consider how much of your forecast GPS sales you want to replace or surpass. We believe the volume potential is large.

e. As much as possible view this budget as *incremental* to your CSE and paid search text ad budget. We have not seen material cannibalization between PLA and paid text ads to date. It makes every sense for Google to manage these programs so that there is no cannibalization.

3. Ensure your PLA program is properly set up on Mercent. If you rely on Mercent’s marketing management services, your marketing manager has already done this. If you are an advised Mercent software subscriber, our Client Training and Enablement team will be reaching out to you to schedule a review. In any case – never hesitate to call or email us for help

4. Remember that PLA is different than paid text ads. Just because the traffic comes from Google does not mean “PLA is paid search.” That’s like saying SEO is paid search, or GPS is paid search. PLA is a unique program that shares characteristics of Comparison Shopping Engines, paid search, and SEO. It must be managed with an expert understanding of those unique requirements. Mercent leads the market in PLA expertise, and we can manage your program autonomously on your behalf or in partnership with you or other vendors or partners. We are flexible, and as your partner we want to be sure you are as prepared as possible for this change.

Since I’m writing this on company time, I have to add, “if you’d like to learn more, email me jeff.buechler@mercent.com”. What I don’t have to say is, if you are going to IRCE, email and we can get drinks and talk about it…all on the company dime….suckers.

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