In the US, more than 166 million people – 53% of the population – own a smartphone. We carry them with us wherever we go. So, it’s no surprise smartphones are a key target of advertisers and e-commerce providers. The vision of smartphones replacing wallets is just too good to pass up. Case in point, Apple just announced Apple Pay payment solution in conjunction with the iPhone 6 launch.
But just how likely are consumers to use their phones to make purchases outside of a new app or scheduling an Uber pickup? To gauge consumer interest in using smartphones to complete transactions, we thought we’d take a look at the performance of Google Product Listing Ads (PLAs) on smartphones and desktops.
PLAs are unique in that they are predominantly used by retailers to showcase a product; so, we aren’t seeing consumers react to ads for services or information. Also, unless you’re in the market for a new Razor Scooter, odds are you aren’t going to search and click on an ad for one. Consequently, PLAs are a good barometer for getting a pulse on consumer online shopping behavior.
First off, the click-through rate (CTR) of PLAs on smartphones is higher. The gap varies, but more recently in June, 2014 the CTR of smartphones was 33% higher than desktops. This would indicate consumers seem to favor their smartphones for browsing and researching products. Makes sense. For the last few years, the story has been that smartphones are used to research but when it comes time to pulling the trigger, the transaction either takes place on a desktop or in a store. A smartphone is rarely used to complete the transaction.
To answer that question, we looked at the conversion rate of PLAs for smartphones versus desktops. Since these are ads for specific products, the likelihood of a conversion rate for a PLA being a transaction is very high. Desktops still rein king when it comes to completing transactions with a conversion rate 135% higher than smartphones in June; however, what’s interesting is the growth in conversion rate on smartphones.
Year over year, the conversion rate for PLAs on smartphones has increased 120%. But what does this mean? It means consumers are completing more transactions on their smartphones. This is likely due to not only familiarity and comfort with doing so but also retailers and technology providers like Google making the transaction process easier and much more mobile friendly.
Get ready to ditch your wallets.
Now that you are well-versed in the changes coming with Google Shopping campaigns, you are probably busy preparing to make the upcoming transition. However, given the changes Google has made to the way campaigns are structured, it can be confusing to figure out how to best set things up to suit your business needs.
In an effort to make Shopping campaigns easy to use, Google decided to structure them in a hierarchical format. This means that users can essentially break down their entire inventory into different product groups all under a single over-arching ad group. While this is indeed easier to implement, large advertisers may find this new structure to be more restrictive and struggle with how to best optimize their campaigns to achieve maximum ROI for each campaign segment or product line.
Maintaining all your campaigns in a single ad group will confine them – regardless of their different objectives and outcomes – to a single economical goal, which ultimately prevents bidding flexibility. This is where Marin can make a big difference. Using Marin’s flexible folders, you can easily create and control bidding strategies for ad groups based on their performance and efficiency goals. This is beneficial for many retailers that wish to bid different shopping campaign segments or product lines to different efficiency targets.
Additionally, savvy advertisers should use the mobile bid adjustment setting at the ad group level to optimize their campaigns across devices. Marin’s mobile bid adjustment recommendation (MBAR) tool can facilitate this task at scale on shopping campaigns with multiple ad groups.
The big takeaway? By simply breaking out your Shopping campaigns into multiple ad groups, you will be able to leverage the power of Marin’s bid optimization tools and have better control of your advertising budget, while enjoying all the perks that Google Shopping campaigns has to offer!
Google Shopping campaigns are a great opportunity for retail advertisers to review their current PLA campaigns and optimize them for even better results. However, as many retailers are managing sometimes millions of products across thousands of brands and hundreds of feeds, adapting to and mastering the new Shopping campaigns system can seem like a huge undertaking.
Below we’ve provided seven tips to help you succeed during (and well after) the campaign migration process:
Going beyond basic campaign management strategy, advertisers can obtain additional control and visibility over Shopping campaigns by following more advanced tips:
For more best practices to ensure a seamless transition to Google Shopping campaigns, check out our full-length guide here.
In February, Google Shopping campaigns became available to all advertisers globally. Shopping campaigns redefined the way retail advertisers manage and report on Product Listing Ads, offering additional flexibility, visibility, and control marketers truly appreciate. Though advertisers can continue managing standard PLA campaigns successfully, Google announced today that all advertisers must fully transition to Shopping campaigns by late August 2014. After this date, advertisers will no longer be able to manage PLAs through standard Search campaigns, and all remaining PLA campaigns will be automatically upgraded to Shopping campaigns. This transition, similar to enhanced campaigns, represents a challenge and opportunity for retail advertisers.
What Do I Need To Do?
From now until the transition date, advertisers can continue managing and optimizing PLAs through standard Search campaigns. Since the auction landscape for PLAs was not affected by the introduction of Shopping campaigns or the mandatory transition, advertisers can continue running standard campaigns without adversely impacting PLA performance. Keep in mind Shopping campaigns and standard campaigns can run in tandem, ensuring the transition process can be executed successfully over time and according to retailers’ business needs.
How Do I Migrate?
There are five critical steps for transitioning to Google Shopping campaigns:
1. Prepare your feed for transition.
Review your product_type, adwords_labels, and adwords_grouping values. Products you plan to target as a group and bid on using product_type should have exactly the same value in the product_type attribute. Keep in mind that product types can only be subdivided five times.
For shopping campaigns, adwords_labels and adwords_grouping attributes aren’t supported. The new custom_label attribute can be used instead; however it’s limited to five labels per product.
2. Plan your transition process.
Take time to plan out your transition and consider restructuring your PLA strategy according to best practices and business needs. For advertisers managing a large number of product targets, a phased transition schedule is recommended.
3. Create a Google Shopping campaign.
For a single transition, create a Shopping campaign and subdivide product groups based on performance and business needs, then pause the old PLA campaign.
For a phased transition, create a Shopping campaign and systematically subdivide high volume and top performing products; pausing old PLA targets as new objects are created in your new Shopping campaign. If new groups don’t map directly to existing targets, you’ll need to have both PLA campaigns active, setting the new Shopping campaign priority setting to “high.”
4. Subdivide products within your new Shopping campaign.
Keep in mind that advertisers get performance data at all levels for all products, regardless of how product groups are organized. However, since product groups can only be subdivided five times, how these groups are organized becomes very important. It’s recommended that advertisers subdivide product groups first by product attributes that support more granular, subsequent subdivisions. For example, product_type > brand > id.
5. Analyze and optimize.
As with any transition and migration, be sure to monitor performance and ensure all of your products are receiving consistent coverage and driving similar outcomes. Review and familiarize yourself with the new CPC and CTR benchmark metrics as well as impression share. These will provide insight into the auction landscape and enable you to make smarter decisions when optimizing bids and product groups.
For additional guidance, please review Google’s recommended steps for transitioning to Shopping campaigns and work with your solution provider to establish an appropriate timeline.
What’s Marin’s Timeline for Support?
A beta program for Google Shopping campaigns will become available well in advance of the transition date. General availability for campaign management, streamlined reporting, URL Builder functionality, and integrated bid optimization is scheduled shortly after the conclusion of the beta. For more information on Marin’s Shopping campaigns beta, release schedule, and transition plan, please contact your customer engagement and customer success teams.
Last week, the Search Engine Strategies (SES) conference wheeled its way into London. Marin was heavily involved across the three-day conference with Clive Morris, Matt Ackley and Jon Myers speaking in multiple sessions. I just wanted to wrap up three key trends from across the show:
1) The Rise of PLAs
As our white paper The State of Google Shopping found, there is no stopping the growth of Product Listing Ads (PLAs) in the e-commerce industry. Chris Howard, Head of Digital at Shop Direct Group, said that PLAs are one reason why paid search is interesting again. He also mentioned that they generate better ROI for retailers than traditional PPC.
Brendan Almack and Alan Coleman at Wolfgang Digital ran a great session, diving into detail on PLAs. They shared these useful insights:
2) Audience Data in Search
With SERPs becoming more personalized and advertisers increasingly targeting people – not keywords or positions – we talked a lot about how audiences and audience data can be integrated into both paid and organic search.
Ian Carrington, Director of Performance, Northern and Central Europe at Google introduced Retargeting Lists for Search Ads (RLSAs) into the conversation during the very first session on day one of SES London. Ian recommended using RLSA remarketing if you want cheaper CPAs and increased conversions, which is a no-brainer for most advertisers.
Marin Software’s Matt Ackley and Jon Myers both suggested that audience data is the next frontier in search. In reference to our recent integration with BlueKai, both said it’s essential to understand and utilize audience data, because it will make your PPC more strategic. Matt also speculated that Google could eventually use its own user data to bring audience targeting and analytics even further into paid search. For example, you might have the ability to adjust bids for searchers with different incomes and family sizes.
3) Context Increasingly Plays a Role in Search
With recent algorithm updates across paid and natural search, the impact of context on search was a also hot topic. Matt Ackley talked about how context is going to become more integrated with search, for example by integrating weather forecasts to adjust your bidding strategy.
Allistair Dent, Director of Paid Media at Periscopix, agreed saying that Google AdWords new features will use the enhanced campaigns structure, where context is just as important as keywords and other targeting. He suggested blending contextual items together to make decisions about your audience. For example, if a user is searching for your brand near your store, then you can send them to a special local-focused landing page.
Were you at SES London? If so, let us know what you thought in the comments!
Google’s Product Listing Ads represent a highly effective channel for online retailers of all sizes, exposing new buyers to your products and driving purchases. Listing products on Google Shopping with rich product information such as price, image, color/size, SKU number and your brand name creates an engaging user experience that is difficult to get on other marketing channels available today.
I’ve managed PLAs in the past for online retailers and marketplaces and gained a lot of insight from my experience in building campaigns from scratch and analyzing performance data to make decisions. Here are five quick ways to optimize your PLA campaigns to ensure your spend yields positive returns and to get ahead of your competition.
1. Use search query and negative keywords to stop wasting spend. Since Google doesn’t allow you to specify keywords to target for PLAs, and because search results appear based on the information you have within your data feed, I recommend using negative keywords to add in some control. Negative keywords essentially tell Google what keywords you do not want products to show up for. This is useful because you don’t want to pay for clicks not relevant to your products.
For example, let’s say you’re online book retailer. Even if you’re trying to sell “The Hunger Games” book, Google will show your product ad to people searching for “Hunger games DVD.” Because you don’t sell the DVD and because the search isn’t relevant to the ad displaying, you will want to add “DVD” as a negative keyword.
To figure out what keywords you may want to exclude, you need to generate a search query report. In AdWords, do this by going to your Keywords tab within your PLA campaign. Then navigate DETAILS> SEARCH TERMS > ALL. This will populate the report you need in order to make your decision.
To kick it up a notch, use performance data with the search query report to evaluate which keywords are truly working or failing. Install the Google Conversion Tracking pixel on your conversion pages to see conversion data tied with the search queries generated from the report. This way, you can see what keywords are performing poorly and optimize for a better experience or pull the ad.
2. Regularly send a high quality data feed. It’s very important that you send Google the most updated feed with all fields populated. If you know the frequency of how fast your inventory will move or when price changes occur, it is best to submit in those feed changes immediately. This can vary, depending on whether you’re a small retailer with fixed pricing and few price specials, or a marketplace where pricing is controlled by individual sellers. It’s best to schedule the feed when your website and/or products get updated. Keep it fresh!
3. Ensure the product landing page matches up to the description in your data feed. You wouldn’t believe how many times I’ve encountered a bad data feed due to data processing errors, such as incorrect product information scrapped from the database or incorrect prices. It’s crucial to ensure that the product to landing page experience is flawless and what the customer expects to see. Even a slight price difference from the ad to the landing page – or worse, an out of stock item – may be a bad enough user experience to make users bounce away.
4. Test new product images. If you’re one of the online retailers that uses stock images for your products, then keep in mind that you’re not helping yourself stand out from the competition. If you’re looking for a boost in CTR and want to drive clicks away from your competitors, consider using your own product images.
For example, let’s say you’re an online retailer specializing in outdoor apparel with a product line of North Face jackets. Differentiate yourself by using your own models; humanize the products instead of showing the standard stock image that everyone else uses. If you’re a retailer that has hundreds to thousands of products, this may not be feasible so focus on your highest revenue potential products.
5. Identify products with the most clicks. Due to reporting limitations of PLAs, it’s difficult to pull a report that lists out products that have generated the most clicks. Given this, it’s important to make sure your own web analytics tools are set up to properly track and evaluate performance. Using your web analytics or third party tool, generate a report to get an understanding of which products are generating the most clicks. You will then be able to evaluate the performance, good and bad, and make a decision on how to optimize.
The rule of thumb for this exercise is to identify winners to bid higher. Or identify losers wasting spend to kill or improve. If the product ad performance is not as you expect, be sure to test out that experience to see why people are not converting as expected.
These five actionable items will ensure a great start to a healthy PLA campaign that will allow you to rise above your competitors. To learn more about Product Listing As, check out our latest whitepaper:
The State of Google Shopping: Mobile Shoppers & Record PLA Spend Drive Success for Retailers.
2013 marked the first full year of Google Shopping since the transition to a commercial model built on PLAs. With Google Shopping campaigns slated for release later this quarter, retailers must not only prepare for the upcoming changes to AdWords, but also familiarize themselves with shifting PLA trends in the new shopping landscape. To help advertisers remain competitive and win the battle for revenue online, Marin has released the 2014 annual research brief, examining the current state of Google Shopping. Analyzing year-over-year performance, with a focus on the holiday season and consumer engagement across devices, this reports provides a comprehensive breakdown of PLA performance in 2013 and insight into what retailers should expect in 2014.
Our research started by analyzing the meteoric increase in spend on PLAs throughout 2013, especially during the holiday season. Significant year-over-year increases directly linked to the rise in competition as more advertisers increased invest in PLAs, drove CPCs to historic levels. With advertisers continuing to allocate more budget towards PLAs and away from text ads, the search industry is undergoing a dramatic shift. The seemingly overnight success of PLAs and the emergence of hotel price ads (HPAs) foreshadow a search landscape where advertisers, whether in retail, automotive, or financial services, will have at their disposal richer and more engaging, industry-specific ad formats. These will undoubtedly emerge over the next two years.
The findings in this report not only impact advertisers across industries, but also how advertisers engage their customers across devices. During the holiday season, retailers witnessed shoppers favoring smartphone PLAs over its desktop and tablet counterparts. Not only were they cheaper, but smartphone PLAs also outperformed PLAs delivered on desktop and tablet devices from a CTR perspective. If 2013 was the year of mobile, or more accurately, enhanced campaigns, then 2014 is certainly the second year of mobile. Marin predicts that by December 2014, 40% of all PLA clicks will occur on smartphones. That’s a lot of clicks that retailers will need to provide a mobile optimized shopping experience for.
For more 2013 PLA trends, findings, and predictions, download our 2014 annual report, The State of Google Shopping: Mobile Shoppers & Record PLA Spend Drive Success for Retailers.
Leading up to the 2013 holiday season, Google introduced a number of changes to spruce up their Product Listing Ads (PLAs). Expanding the number of PLAs delivered on smartphones and adding new consumer features, like viewing similar items or creating “shortlists,” are clear indicators that Google expects their rich and highly engaging feed-based ads to be the format of choice for retail advertisers and shoppers. Over the three biggest online shopping days of the holiday season – Thanksgiving, Black Friday, and Cyber Monday – we sampled the Marin Global Online Advertising Index, analyzing enterprise retailers spending over $100,000 per month on Google’s standard text ads and PLAs.
PLA Spend Continues to Surge
In August of this year, the rapid adoption of PLAs was clear, marked by five consecutive months of increasing click-through rate (CTR) spanning February through July. Consequently, to capitalize on this emerging revenue opportunity, retailers invested heavily in PLAs during the three biggest shopping days with PLA spend increasing a staggering 143% on Thanksgiving year over year. The increase in spend was a result of more consumers shopping and an increase in competition, as retailers became more aggressive across the auction landscape. Unfortunately, shoppers did not increase their engagement with PLAs year over year. A lack of promotional text and the inability for retailers to effectively differentiate through product feeds likely caused this unexpected lull in CTR.
PLAs > Standard Text Ads
For some time now, we’ve been reporting on the superior performance of PLAs to standard text ads. Many retailers agree that PLAs not only perform better from a CTR perspective, but also cost less per click. During Thanksgiving, Black Friday, and Cyber Monday, PLA CTRs were 36%, 39%, and 61% higher than standard text ads, respectively. Moreover, PLA cost-per-click (CPC) was 7%, 9%, and 6% lower than standard text ads, respectively. Though the CPC gap between the two ad formats appeared to close slightly due to seasonality, the CTR gap widened significantly as shoppers continue to find PLAs more relevant and engaging during the holiday season.
The PLA Mobile Movement
By device, PLAs on smartphones outperform those on desktops and tablets. Though the CTR for PLAs on desktops and tablets were nearly identical, tablet CPCs were only slightly higher compared to desktops across all three days. However, the CTR for PLAs on smartphones were 17%, 22%, and 23% higher than their desktop counterparts on Thanksgiving, Black Friday, and Cyber Monday, respectively. Even more significant is the fact that CPCs for PLAs on smartphones were more than 50% lower than desktop CPCs over the three days. (The graphs below are normalized to desktop performance.)
Undoubtedly, PLAs continue to drive better results for retail advertisers. This richer ad format not only outperforms and is less expensive than standard text ads, but it also drives better engagement on smartphone devices where CPCs remain much lower. With Bing preparing to make Product Ads generally available at the start 2014, this level of PLA performance should make any retail advertiser salivate. Those looking to capitalize on these shopping ad opportunities must prepare for the upcoming changes to Google Shopping and invest in technology that scales the deployment, management, and optimization of this highly successful ad format.
The Marin Global Online Advertising Index is comprised of data from hundreds of large-scale advertisers and agencies that collectively invest more than $5 Billion in annualized spend through the Marin platform. The data analyzed by Marin for this snapshot reflects a subset of Marin’s direct and agency clients managing active advertising programs in the retail sector from 11/26/13 through 12/02/13. All data is accurate as of 12/2/2013, but subject to change; and represents a year over year analysis of the same holiday time period.
Late last month, Google introduced Shopping campaigns, a new way for retail advertisers to manage and report on Product Listing Ads. While retailers can continue running regular Product Listing Ads campaigns, Shopping campaigns offer additional flexibility and visibility that advertisers will truly appreciate. This new campaign type is only available to a select number of retailers today
, however it’s important to understand what the changes and benefits are before they’re generally available early next year.
How Do Shopping Campaigns Work?
By now retail search marketers know that Merchant Center data is critical in creating and managing Product Listing Ads. Shopping campaigns address this requirement by making all product data accessible within AdWords, removing the need to reference Merchant Center. Advertisers can now easily browse and organize their product inventory and make informed decisions about their advertising strategy within a single interface.
One of the biggest changes is the replacement of product targets with product groups. Product groups are used to select which products retailers want to bid on for a given campaign. There can be multiple product groups within a single campaign. Advertisers can subdivide inventory into customized product groups using any product attributes and the products that aren’t subdivided remain in an “Everything else” product group. Bids can then be calculated and set for individual groups.
Here’s what has and hasn’t changed:
What Are the Benefits?
There are four key benefits to using Shopping campaigns:
Let us know your thoughts on Google’s new Shopping campaigns and how you think they’ll impact your PLA strategy for 2014.
Note: At this time, shopping campaigns are not supported via the AdWords API.
Admittedly, we’re excited about Google PLAs and our recent findings. Yes, PLAs are still relatively new – at least the sponsored-only version – but it’s always intriguing to watch a new ad type take off and we’ve got some of the best seats in the house.
While the rise of PLAs may give cause for some to extrapolate what they mean for Google, its competitors, and advertisers, I thought it would be fun to examine what the success of PLAs could mean for consumers.
We often hear and perhaps even complain ourselves about those “annoying ads.” But what if ads weren’t annoying? What if they truly added to your online experience? Everyone would be happy, with users and advertisers having reached digital marketing nirvana – right? It certainly sounds far-fetched; however, I like to think the success of PLAs hints at progress.
As our data shows, consumers like PLAs. You could even argue they prefer the ad type (certainly more than text ads); something about a relevant image just draws people in. A picture is worth a thousand words or in this case a thousand clicks, but the relevancy is the critical part. An online shopper is looking for a product and up pops an image of what they’re looking for. Problem solved. Thank you, advertisement. Wrong image, though, and it becomes annoying.
The scenario works well in an intent-to-buy situation, but most of us use the Internet for things other than just shopping. Hard to serve a relevant ad if I don’t know what you’re up to. Still, ads can be relevant if advertisers have some inkling of intent.
With search, keywords leave advertisers some trail of bread crumbs to follow. Outside of search, the crumbs become scarce. Even on Facebook where there’s plenty of profile information, the nature or intent of a user’s interaction remains a mystery.
Encroaching on users’ privacy isn’t the answer. So, advertisers are left with honing their audience targeting skills. Ad tech will obviously play a role.
In the meantime, rather than resist the presence of ads, Internet users can look at their penchant for PLAs to see what happens when advertisers get it right.