Google is Changing Online Shopping: 3 Things Your Business Needs to Know

Last October, Google’s free product search service became “Google Shopping”, a pay-per-use premium online shopping destination. Now, companies can pay for a “Google Product Listing Ad” (PLA) much the same way that a business pays for pay-per-click AdWords advertising.

Google’s new online shopping service also integrates with Google+; now, shoppers can ready product reviews posted by their friends and also post their own reviews. New features, like 360-degree product images, shortlists for product comparison, and a discount/promotion product overlay, are designed to make shopping easier for consumers.

For years Amazon has comfortably ruled the Internet as online shopping king. Now Google’s PLAs are shaking up eCommerce, changing how retailers market their products and advertise online. Here’s what your business needs to know to stay competitive:

#1: Google Product Listing Ads Outperform Text Advertising

Does your business currently advertise merchandise by using AdWords? Then it’s time to make the jump to PLAs. A new report from Marin Software found that PLAs out-performed text-based ads, delivering a 210% higher click-thru rate. The percentage of impression for PLAs versus text-based ads was 60% higher.

Earlier in January, digital marketing group Kenshoo released its 2012 online holiday retail report with similar findings. According to the report, PLAs deliver a 31% higher ROI than traditional text-based ads. The click-thru rate for PLAs was 2.73% compared with 1.86% for text-only ads; that means PLAs performed nearly one and half times better. PLAs convert 23% more customers, resulting in a 31% increase in ROI for online retailers.

#2: Regular Monitoring is Necessary to Maximize PLA Success

Unlike text ads, which can be run with minimal monitoring, PLAs require regular maintenance and refinement. The most successful PLAs are those that maximize conversion rates and increase shopping cart value. What does this mean for your business? Start by setting up a separate ad group for each PLA. This provides greater control over the bidding and targeting process. When setting bids, you will need to bid higher than you normally bid for AdWords. Unlike AdWords, only the top performing PLAs will receive any impressions or traffic. By regularly monitoring your PLA campaign, you can tweak the best performing ads to maximize ROI, finding the right balance between ad cost and click-thru rate.

#3: Boost ROI by Creating PLAs that Maximize Shopping Cart Value

According to the Kenshoo report, PLAs with the highest ROI are those that maximize shopping cart value. Achieving this is a combination of smart design and targeting. Take advantage of Google’s new sales option to add discount and promotion overlays to your products. Manage online reputation to ensure positive feedback from user reviews, which increases the likelihood that potential customers will make a purchase.

Bottom line: PLAs remain relatively new and few businesses have truly taken advantage of this marketing opportunity. Early adopters enjoy decreased competition, which boosts click-thru rates and ROI. Acting fast will give your business a competitive edge in the cut-throat world of online retail.