The impact of Google Shopping

Introducing Google’s new retail strategies

If you're a veteran of "Internet marketing", you'll remember Froogle, Google's shopping search engine which presented products freely submitted by retailers using XML feeds. In 2007, this became Google Product Search and you may have heard this is now being rebranded to Google Shopping.

The Google announcement explains:

"We are starting to transition Google Product Search in the U.S. to a purely commercial model built on Product Listing Ads. This new product discovery experience will be called Google Shopping and the transition will be complete this fall".   

While Google Product will officially becoming, Google Shopping the more significant changes outlined below will only affect US product feeds & users for now. There is no date as yet for a wider roll out, but it's rumoured to be early 2013. However what Google does in the USA almost certainly makes it way across the seas. This is often a good thing for UK marketers, giving us more time to react and understand the good and bad points from listening to our American counterparts. If you are using Google Product ads at the moment to enhance your paid search a lot of the information below and changes will not be big news to you.

In this post I'll talk about the immediate implications for retailers who want to maintain visibility in Google Shopping, in my next post I will look at the wider strategic implications.

As simple as a name change?

The most simple of the changes will see Google Product as a sub brand of Google will cease to exist and named the more accurate (in terms of user experience) Google Shopping will take its place.

Introduction of Google trusted stores

Probably the most significant of the changes to Google’s service, this area will see services such as Trust Pilot and Feefo replaced (in my opinion). Essentially this service will mean retailers are rated, specifically on delivery & service quality. Google are taking it that seriously that they will also “insure” any purchases through a “Trusted Store” up to the value of $1,000. This will mean that the bar to becoming a trusted partner is likely to be set high. The help site references the following points as indicators of service quality:

• High % of orders must ship on time
• The lower order to shipping time the better
• Low number of customer service issues
• Fast response times to any customer service issues

The ranking algorithm

Naturally similar to the AdWords algorithm, with the two key metrics to consider being bid amount & relevance - a variant of quality score. Relevance will be dictated by things like, categories / product types and fields supplied in your product feed as much as name, description, keywords. As well as the text & relevance of the landing page. Google’s official blog says:

Ranking in Google Shopping, when the full transition is complete this fall, will be based on a combination of relevance and bid price--just like Product Listing Ads today. This will give merchants greater control over where their products appear on Google Shopping. Over time they will also have the opportunity to market special offers such as “30% off all refracting telescopes."

A new look

The new look Google Shopping will feature larger product images, the ability to refine searches by brand and / or product type as well as more dominance in search results, naturally attracting more traffic.

A good or bad change for retailers?

I don’t think this change will surprise many people in the digital marketing world and the reasons Google state for making the changes (see quote below) stack up for me, it is currently an abused channel and despite that, for clients I am involved with it is a highly successful from a conversion perspective (often 5%+). It certainly can perform well above PPC & SEO channels, but I guess the intention of people from a Google Product search is much more purchase orientated than other acquisition channels.

We believe that having a commercial relationship with merchants will encourage them to keep their product information fresh and up to date. Higher quality data—whether it’s accurate prices, the latest offers or product availability—should mean better shopping results for users, which in turn should create higher quality traffic for merchants.

In short, I think this is a good move for most online retailers, apportioning an amount of money from AdWords over to Google Shopping would make logical sense, most people are already using the product ad bidding within Google AdWords anyway.

How to best prepare for the changes?

You will need to make sure you have a Google Adwords & Google Merchant account if you are to take advantage of the changes. Google shopping will be managed through a tool called, Product Listing Ads (currently integrated into Google Adwords). My advice though would be too consider the wider changes this update will bring:

• How will you fund such a channel, it could be seen as a new media spend?
• How does it currently perform vs other channels?
• Which channels will you move budget from?
• How do the numbers work, specifically ROI?
• Are you confident of getting on the Trusted Stores program? What provisions are in place to ensure you get on it and crucially stay on it?
• Is your feed & products as optimised as they can be and are you using Product ads yet?

Crucially for UK marketers, you have a window of opportunity now to get your ducks in a row which will equally mean improved performance before you have to pay for the privilege so don’t ignore the update.

Learn more about Product Ad Listings

While we wait though we can still utilise product feeds in a paid search sense, so running the appropriate tests in this will gear you up for when Google Shopping comes to the UK. The video below will help you understand how Google Product Ads work.

I hope this review is useful for future reference. Next week I'll look at the wider changes for retailers that the move to Google Shopping brings.