-So, as most of you probably already know, Google, which had been running a free product comparison site for several years, switched to a paid version towards the end of last year and is now integrated with Google Product Listing Ads, also known as PLA’s. If you’re like me, the idea of going from a free service to a paid service initially meant you’d probably just be losing money. Well, there’s no doubt that you will be spending more money, but if you do it right, there is also a huge opportunity to make a whole lot more in revenue than you ever could with the free Google listings, and we’ll cover that in just a bit. -Let’s first learn just a little bit about where Google PLA’s stand in the market and how it has evolved into what it is today. So why did google even switch to a paid version? Sure google wants to make more money, but I don’t think they decided to do this just to steal your money. The old Google products was not a good shopping experience, filled with way too many products to sort through and google put no resources into it because they weren’t making any money. In my opinion, it was just a dying product that they had to clean up to make the experience better for both shoppers and retailers.Let’s take a quick look and see how Google has slowly shifted from the Free Listings into the PLA’s since it started to switchover late in Q3 of 2012. Pretty obvious trend here. If you haven’t started to see your free listings drop off dramatically, you soon probably will. We are for some reason still seeing a decent amount of traffic come through the free listings, but it is decreasing pretty much every month.
-As you can see from the chart, Google PLA’s are accounting for a ton of Revenue when compared against the other popular CSE’s. At dungarees, we’ve seen an even greater differential between PLA’s and the other CSE as far as revenue is concerned but I’m sure it would very depending on what vertical you’re in.-You can see however, that the free Google listings do still have a presence.(rick, what is the timeframe on this chart)
I think there are a number of reasons why us as retailers stand a great chance to succeed with the new Google Shopping.CompetitionAnybody and everybody had a merchant feed online. It was free and required very little maintenance, so even the smallest merchants with no budget were able to get their products listed and competing with yours. I can remember keeping products up that I knew we no longer had in stock, but since it was free, I was OK with keeping those up hoping the customer would get to our site and maybe find an alternative. And I think a lot of other merchants had this same approach, and that created for a very poor user experience as far as the product listings go on Google. All the affiliates that usually have pretty thin margins were also able to flood Google shopping since it completely free.But, now look at Google shopping, you can’t just submit a feed and watch the traffic come in. You must have an adwords account. You’d probably be surprised how many of the people you were competing with that didn’t have an Adwords account. And not only do they need an account, they also need a little be of technical expertise just to get a PLA set up to run effectively. You now have to deal with bidding, CTR, inventory issues, activation, deactivation and all the other issues that can affect the ROI. These types of issues have immediately started to weed out the competitors and made the Google Shopping a destination that customers actually want to use.Other CSEsFor us, Google has outperformed the other CSE’s, not only in Revenue but also in Conversion Rates. Since this is now a revenue stream for Google, they are going to have reasons to continue to make it better, thus stealing market share away from the other top CSE’s. If you have your campaign optimized on PLAs, that will be better for you due to the better ROI you’re going to get on Google, especially when the additional traffic from other CSE’s start rolling in.Against AdwordsAs a lot of you probably do as well, we have Google adwords campaigns that contain all our products codes, product name, etc... For us, these have some of the highest ROI’s in our entire account. But as you can see from this graphic, we are sometimes now competing against ourselves. Since these have a very similar conversion rate on both of these types of ads, we’d obviously rather the customer clicked on the PLA listing to the right. This type of scenario allows us to consider bidding options for both Adwords & PLA’s. Do I really want to bid up to the second spot for 75 cents if I have a 42 cent listing right next to us? I’m now allowed to maybe bid that down a bit into the 3rd position and hope that the traffic flows to the PLA listing. Maybe by tweaking your Adwords listing down and your PLA listing up, you could keep your average CPC between the two down, while increasing your visibility & traffic. Of course, these techniques always runs the risk of allowing a competitor to steal that click away from you, so be somewhat cautious some of these approaches.
Here’s just a quick look at some of the data we’ve seen so far. I’ve compared a time frame in 2013 with with us running the new Google Shopping vs the same time frame last year.The Chart on the left is the amount of orders we received from the Merchant Center in 2012 vs the PLA’s in 2013. You can see that in 2013 we were able to drive about 3 times the amount of orders that we were in 2012. Sure, we have to pay for them now, but the significant increase in orders more than offsets that and our makes our bottom line look a lot better.You might wonder if this is just taking orders away from your adwords, and that might not be the true increase. To the right, I’ve compared our Adwords Campaign that is dedicated to individual products that somewhat competes with the PLA’s. It appears to have slightly increased as well, roughly at the pace I would expect it to grow year over year as we have continued to grow. If PLA’s was truly taking away from Adwords, you’d probably see a pretty big dip in those orders.
IRCE 2013 Google Shopping Presentation
The IRCE Guide To DominatingGoogle ShoppingRick BackusCEO of CPC Strategy@CPC_RickRick@cpcstrategy.comDarren BaldwinE-Commerce Manager,Dungarees@ECommDarrendarren@dungarees.net
About Dungarees Retailer of work apparel& footwear 2 Brick & mortar storessince 2000 Went online withDungarees.net in 2004 Double-digit growthevery year since goingonline & currently in IRSecond 500