Keeping An Eye on Google Product Listing Ads

Google keeps changing things right before Q4, and hey, at least it keeps people on their toes.

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.

September 5th, 2010