Google Shopping Now Pay To Play Only

by David Rothwell October 18th, 2012 

Google Shopping

google-shop

The eCommerce world has changed forever, and it's official: since yesterday, October 17,  Google Shopping results in the US come only from Merchants who are buying Product Listing Ads campaigns in AdWords accounts.

If you have not yet opened an AdWords account, linked it to your Google Merchant Center, and created Product Listing Ad campaigns with associated products, promotional ads, bidding and budgets, the product listings you are used to getting free clicks for will no longer show in the new Google Shopping results.

For the first time since Google relaunched Froogle as Merchant Center in 2009, product advertisers must pay for clicks, track sales, understand their commercial value – and run their online advertising campaigns for profit.

Actual click costs are as yet uncertain in this new environment, and it remains to be seen where they will go as Merchants are forced to compete against each other in ad auctions – as AdWords advertisers have done for many years. Only those who know their numbers will survive and prosper.

For Merchants With No Adwords Account

It goes without saying that you will have to open a new AdWords account, which needs to be linked to your Merchant Center account.

You can then create a new Product Listing Ad campaign directly from within your Merchant Center although you need to manage it and any others online with the AdWords interface, which new users are bound to find confusing and complicated.

Consider Getting Professional Help

Researching, setting up, managing, and optimising AdWords and Merchant Center accounts (as well as analytics, sales funnels, landing pages and other essentials) is a serious ongoing commitment but, done successfully, can and should be a highly profitable investment although often best outsourced.

If considering a third party Agency, look for the following:

  • Proven successful results
  • Google Certified Partner status
  • No false claims of "guaranteed results"
  • What other, similar clients say about them
  • Flexible payment plans, not just fixed rate based on ad spend
  • Strategic partnership to share in your success for the long-term
  • Willingness to understand and support your business and profitability
  • Data feeds, e-commerce, shopping cart, and landing page optimisation experience
  • Creativity and ideas to scale and expand your sales opportunities wherever possible, including
    • Remarketing
    • Mobile devices
    • Phone call conversion tracking
    • Other Comparison Shopping Engines
    • Text and image-based Display campaign

For All Merchants

Earn more than you spend: "Clicks are for show, but Conversions are for Dough"

AdWords always works – it's just that many advertisers do not understand the advertising platform, the website visitors they are buying, or their own internal sales processes and economics sufficiently well to enjoy the profitability they should.

If you're not trying to spend more on AdWords, rather than less, something is going wrong.

When managed correctly, AdWords campaigns can be run on unlimited daily budgets because they are based on cost per sale, margins, and customer satisfaction, not just click costs.

Traffic + Conversion + Economics + Support = Profitability

You need the best, targeted buyers, ready to exchange their money for your products in an accountable online transaction, to cover your costs and margins and earn a profit in the process.

It is critically important to track online sales conversions within AdWords, and this is achieved by the simple inclusion of a snippet of code on your sales completion "thank you" page.

Never Hire An Agency Who Is Not Obsessed With Your Conversions!

Because then your AdWords spend (and their contribution) becomes accountable for the profit it brings you.

Google analytics can also be used to provide this information but it is best to use one or the other rather than both to avoid confusing the data.

Also, only track your sales conversions wherever possible, and avoid tracking lead signups or catalogue downloads and the like as well, because these will have very different financial values to your purchases and will make calculating your actual profitability more difficult.

Keep a careful eye on your average order value over time as an indicator of financial targets to achieve with your AdWords campaigns – every campaign can and should be considered a profit centre in its own right wherever possible.

Do Not Panic Buy

It's understandable that many Merchants will immediately want to create new Product Listing Ad campaigns in time for the holiday season, but there are risks with this:

  • AdWords is complicated, and if you are a new advertiser the learning curve will take time and potentially waste some of your marketing budget while you figure it out unless you outsource
  • The new Product listing campaigns are also complicated, and are evolving literally on a daily basis as Google adds new features

How To Control Costs And Profitability, And Avoid Wasted Spend

  • Google publish a useful best practices guide here
  • Make sure your data feed meets or exceeds all Google's minimum merchant centre specifications to ensure listing approval and the possibility of maximum, but relevant exposure
  • Merchant Center product listings expire every 30 days, so make sure you are scheduling them to be regularly updated even if you have made no changes
  • Keep product titles to less than 70 characters or they will be truncated
  • Keep important product keywords early in the title for maximum relevance and better ranking
  • Consider a third party feed management platform to interface with your Web store
  • Don't just turn on Auto targets within existing AdWords campaigns
  • Keep Product Listing Ad campaigns strictly separate from any other search or display campaigns you're running
  • Don't just run a single Product Listing Ad campaign for all your product inventory, make sure to include others for specifically targeted categories or individual lines arranged by ad groups or campaigns
  • Strategically organise your products by attributes like
    • margins
    • sale price
    • popularity
    • profitability
    • seasonality and promotions
  • Take advantage of the following data fields in merchant centre to increase the probability of Google showing the most relevant and profitable product for user searches
    • Product ID
    • AdWords_grouping
    • AdWords_labels
  • Only publish those products which are likely to cover or exceed their click costs, excluding very low price items unless these are capable of generating repeat sales
  • Although no keywords are required in product listing ad campaigns, and product targets are automatically selected for display by Google, nevertheless, prospective buyers are using keywords when searching – so check your search query reports for useful negative keywords, just like you would for search-based campaigns

Stay tuned for further developments in the new world of Google shopping …

If you liked this post, you might also enjoy Beating Google By Doing Better Than Competing On Price

David Rothwell

David Rothwell has been an AdWords Management Consultant and Trainer to world-wide e-Commerce Merchants and Lead Generation businesses since 2005, and specialises in Online Advertising for Profit with Google AdWords. He is a featured speaker at Online Marketing conferences in Chicago, London, New York, and Maui Hawaii, hosted by industry experts and Amazon AdWords authors including Perry Marshall, Howie Jacobson, and Ken McCarthy's System Seminar.

David N Rothwell

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3 Responses to “Google Shopping Now Pay To Play Only”

  1. Elena Anne says:

    What an incredibly thorough article – thanks for all of the information. The "pay to play" concept was inevitable, in my opinion, but doesn't have to spell disaster for Adwords/Merchant users.

    • Thanks Elena,

      I too have been expecting this to happen since 2009. And as I mentioned, folks who know their numbers can very much make this work successfully for them.

  2. Currently Google Shopping is currently available in the US, UK, Australia, Germany, France, Japan, China, Italy, the Netherlands, Brazil, Spain, Switzerland, and Czech Republic.