It’s been discussed for years, ever since Froogle was in beta, how Google would eventually get money out of their free product listings. Retailers have been seeing shifts in traffic for several months now, where clicks are moving away from Google Product Search and over to Google Product Listing Ads.

The exact amount of the shift will depend on the product segment and retailers in question, but the trend is undeniable and feeds into Google’s strategy to more aggressively pull in revenue from their programs. There are still likely to be many changes upcoming for for Google, including potentially new programs which are based on the product data which is sent to Google Product Search. However for now, retailers should aggressively work to expand their Product Listing Ad programs through:

• Aggressive bidding
• Campaign and ad group structure
• Negative keyword lists
• Promotion text
• More advanced techniques such as day parting which is now available

After all, if Google is aggressively pushing the program, that can be a powerful current to ride.

Google’s looking mainly for UPCs on items, however there are some ways to get around this. First, UPCs are being phased in for Media and Books as a requirement. Apparel and custom made goods are exempt from the requirement. For all other categories, Google will take 2 out of 3 requirements. For example, a merchant can provide Brand and MPN, and this will serve as substitute for not having a UPC. Of course MPNs can also be difficult to find at times, but UPC is much more difficult so it’s a good substitution situation.

Overall, this makes sense as Google is looking to create more competitively matched offers, in the same way that Amazon does. So, merchants can expect to potentially loose a portion of traffic if their listing is now buried in other merchants. However, a merchant may also see a large boost in sales if their offer is the best positioned (from complete offer information, price, reviews, history).

The full rules can be found here:

The full requirements can be found on Google’s page here: http://www.google.com/support/merchants/bin/answer.py?answer=160161

At that time, I thought Google would begin to incorporate image based ads relative to keyword searches, maintain a local search results section, and generally find new ways to market products relative to consumer searches. Well the prediction wasn’t perfect, but it was pretty close.

So, I’m giving a tip of the hat to myself, and wondering what things will look like 3 years from now. After all, it’s always good to take a minute, look down the road traveled, and then look up the road ahead.

What I envisioned Google looking like in the future (circa March 2008):

What Google looks like today (at least for me, when searching for ‘Office Chairs’):

Last year Google was rolling out their private beta of Product Listing Ads, and this year most people are eagerly anticipating the public launch. The program has been taken out of Google Affiliate Network and is being merged into the Google AdWords program. The platform switch should allow much greater control and more intelligent penetration into consumer’s retail based searches. The control will come from better management capability for bidding around both CPC and CPA based options. The search penetration is simply growing steadily.

Google Product Ad Listings: CPA vs. CPC

I was afraid CPA was going away, I admit it. CPA has always been a bit of a mythical animal, rarely spotted in the wild. So many companies have tried to do CPA based retail programs, and to date only Amazon has made it work well. With the transition of PLA to the AdWords platform, there were rumors that the CPA program would give in to CPC only. CPC is good because it potentially allows much cheaper conversions if the product actually sells. Spending $.10 on a click to sell a $100 item is a pretty good investment. However with CPC the security blanket is removed, because a retailer could easily get an avalanche of clicks with no sale at all. This is one area where Google shines because they offer a real option of using CPA or CPC, and variable rates can be set up within the same product catalog. Kudos to Google for striking a balance between merchants who prefer one method over the other.

Product Listing Ads vs. Product Extensions

As a quick note, Google is offering and pushing both programs together, however they really aren’t in the same ballpark. One program gives a retailer prime real estate on the upper right corner of a search result page, and the other gives retails a small ‘+’ icon on the AdWords paid listing which very few people click. One merchant I’ve spoken to said that about .003% of people clicked on the icon needed to expand the Product Extension Ad and clicked on a product. Not exactly great penetration.

Expanding Product Listing Ads

So in budgeting for PLA, things can be difficult to judge. The reason is that PLA is still expanding and being tested constantly. I’ve worked to put together some information to show comparisons of different searches across time, however because Google is constantly testing ads, it’s very difficult to judge what kind of reach the ads have. For example, try searching for “Huffy Bicycle” a few times. Sometimes you get a PLA section, sometimes you don’t. Additionally, since PLA is driven by product selection, the ads will only have as much exposure as the current product selection allows. For example, if no merchant selling widgets is enrolled in PLA, then no ads will show for a widget search. Most ads you find now center around Walmart, Target, Meijer, Kohls, and other large brands.

However, as more merchants are getting on board through the beta program, more ads are surfacing. Google seems to stay away from generic words, so ‘teddy bear’ and ‘toys’ don’t pull any PLA results. A search for ‘bicycle’ currently has one result from Kmart, but then “girls bmx bicycle” gets the full PLA treatment including Product Search based one-box listings.

It seems the Toys category in general is getting much more exposure in time for the holidays. I remember doing some searches about 3 months ago and not finding much. So for budgeting, the best way to see what traffic and sales will be like, is to just launch the program.

Matched Listings

One evolution happening is that more and more are ads are now showing matched listings in the results. Below is a screen shot attached for a search on “red wagon”. In both PLA results the listings are matched between 3 separate merchants on the same item. The behavior of these listings will be very similar to the Buy Box on Amazon. For comparison sake, let’s call this the Buy Link.

In this example, RidingStores.com and Cymax have the primary buy link where most consumers will click. The title and image for the product both go to the primary link to the winning merchant’s site. The competing offers from Kmart, Target, and Diapers.com can only be accessed if the merchant name is clicked on. This creates relatively small coverage where only a small percentage of the ad will lead to the non-winning offers. To make it worse, merchants with a  long store name are essentially penalized. In this example, Home-Improvement-Superstore.com has such a long name, than Google can’t fit the name in the ad. You can only see “Home…” as the merchant name, which could be almost anyone from a consumer’s perspective. As the ads develop, merchants will need to be increasingly competitive to win the primary buy link, and also hope their names are not too long to be identified.

Overall, Product Listing Ads continue to evolve in new directions and will likely grow to include more frequent exposure. The ads will likely develop to include more information including components such as product reviews. Since the market will only grow, merchants not already using this platform should work to get on the band wagon as quickly as possible.

The big buzz centered around Like.com’s impressive image reading technology. Like has pioneered this effort for years, and with their last round of $32M in funding, they were able to build impressive amounts of traffic. To build their business case outside of raw traffic and image search technology, Like also came up with creative strategies around CPC and modified ROI incentivized programs. It seemed like Like was the most likely candidate to break through to the upper esceletion of shopping engines until the Google purchase. The main question is, what happens next?

The obvious answer is that Google covets the image technology that Like developed and is looking to fold this into their technological arsenal. Based on Google’s ambitions at differentiation from Bing, they will likely seek to roll this image technology out to several platforms including perhaps Google Maps for additional location identification, beefed up image search technology for image only results, and possibly even using this as an additional piece of their natural algorithms to better rank pages. From a retailing stand point, it seems like a simple step to bring the image search feature to Google Product Search. Google has put enormous of energy into making Product Search into a premier retail destination and the image functionality could be an important differentiator in the same ways Like was using. The only part is, that the image search feature helped Like, but it wasn’t a game breaker.

So what of Like.com?

I’ve seen mixed signals, and it may be safe to say that no one knows for sure. If this were Vegas, 4 to 1 odds Like.com goes away and is absorbed into Google. When your homepage calls out that you have been acquired, and you scale back your traffic buying, the Magic 8 Ball says that signs to point Like going away. Of course, the 8 ball has been wrong before…

If you are a Google Product Search merchant, and don’t know what I am talking about, then you need to go check your inbox where an email from Google probably didn’t catch your attention. Google is requiring all merchants with a Google Product Search account to claim and verify their site by May 18th or face pausing of the account.

Since Google is working hard to push traffic to and monetize the Google Product Search program, currently through integration with Google AdWords and the Google Affiliate Network, Google is requiring that merchants can prove the site being advertised is actually owned by that account. This should help weed out any unauthorized affiliates, and add an additional level of ground work to Google’s penetration into the retail space.

From the merchant perspective, site verification needs to be done first, which is accomplished through Google Webmaster Tools. Either a meta tag needs to be placed on the retail site, or an HTML file needs to be uploaded to the webserver where the site is hosted. Once this is done, Google can be notified via Webmaster Tools so Google can crawl the site or the HTML file and link the Google Account with the site. Next, the site needs to be claimed. This can be done through Google Merchant Center (formerly the GoogleBase administrative panel). By clicking on “Settings -> General”, a single click can now be made to claim the site. The below example shows where this is (where the black fill covers actual merchant info).

So procrastination is natural, by bringing down an account is not. Take care of Mother’s Day first, but then make sure this project is being taken care of.

Still unsure of what to do? Visit Verify and claim a Website URL.

Product Extensions Keyword Targeting

Google Product Extensions can be activated by a merchant through their Google AdWords account. However, how can a merchant control what is being listed? Currently Google takes an educated guess based on the product content available. For example, if  a consumer does a search for ‘jeans’, Google will use the product data available to populate product listings in the product extensions as seen to the left.

So how can a merchant control this? Well, they can’t totally, but they can heavily influence what is happening by using the “adwords_prefer_for_query” attribute available in their Google Product Search feed. By adding this attribute to all products, and then adding the keyword ‘jeans’ in this example on targeted products, a merchant can instruct Google they want particular products to be found for particular searches. Essentially this takes some of the guess work off Google’s plate and allows product extensions to be better targeted from the merchant side.

Google Product Extensions Tracking

Google also offers additional attributes to help in the tracking where Product Search and AdWords overlap. Currently the product links from an extension ad will default to the links provide by Google Product Search NOT the Google AdWords link. So, by clicking on the products in this Lucky Brand Jeans ad, the link activated will actually be the Google Product Search provided product URL. To better track this ad, additional attributes can be added in the product feed. The ‘adwords_queryparam’ attribute can be used to provide additional tracking parameters to be appended onto the Product Search URL. Or, if a completely different link should be used, then Google can be told to use a redirect link via the “adwords_redirect” attribute. For merchants looking to differentiate the two programs, this will greatly help in tracking the effectiveness of these ads and manipulating to get better performance.

To review these parameters and Google’s overview, visit Updating Merchant Center accounts with product extensions attributes.

Don’t worry. It’s a processing issue on Google’s side and they are working to correct it (if not already done).

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