google shopping blue paper

4imprint.com

Google Shopping

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Summary

Google® Shopping ads are the small, visually stimulating images (also known as

product-listing ads) you see on the right-hand side of your Google search results

page after performing a product search. These ads are driving close to 25 percent

of sales for some merchants which is perhaps reason enough for their increasing

popularity among retailers—however they’re also known to attract high quality

traffic, get the attention of shoppers that are ready to buy and often generate

more clicks at a lower cost than traditional text ads.

This Blue Paper® will explore the history behind Google Shopping and will discuss

its growing influence in ecommerce. It will also help retailers determine whether

a Google Shopping campaign is right for them and it will discuss how to set up a

campaign, manage it and measure it.

Google Shopping: Working for reta i lers and shoppers everywhere

Retailers who advertise online but have yet to try Google® Shopping may

be missing out on one of the search engine giant’s biggest success stories.

Believe it or not—Google Shopping’s small image ads, also known as product

listing ads (PLAs), send many retailers close to 25 percent of their website traffic.1

And according to RKG™ Digital Marketing, these ads: “drove 29 percent of clicks

among the agency’s retail clients in the first quarter of 2014.”2 Most of the

growth these clients are seeing in paid search is coming from Google Shopping.

The agency’s spend on these campaigns is up 69 percent year-over-year, and clicks

are up 51 percent. Regular text ads, meanwhile, are only up marginally: 6 percent

for spend and 4 percent for clicks.

What’s driving this success? Google attributes it to putting images and pricing

information in front of buyers at the exact moment they are ready to purchase.

Natural goods online retailer Abe’s Market®, for example, attributes this perfect

timing to their boost in revenue of 257 percent in one year’s time.3

1 Ballard, Mark. “Analyzing The Impact Of Amazon’s Departure From Google’s Search Network.” Searchengineland.com. Third Door Media, Inc., 18 Sept. 2014. Web. 11 Dec. 2014. <http://searchengineland.com/amazons-departure-will-impact-googles-search-network-203172>.

2 Marvin, Ginny. “RKG: Q1 US Paid Search Up 17 Percent, Fueled By PLAs; Smartphones Drove Just 7 Percent Of Spend.” Searchengineland.com. Third Door Media, Inc., 15 Apr. 2014. Web. 11 Dec. 2014. <http://searchengineland.com/rkg-q1-us-paid-search-17-percent-fueled-plas-smartphones-drove-just-7-percent-spend-189136>.

3 “How CPC Boosted an Online Retailer’s Revenue by 257% in 1 Year.” Cpcstrategy.com. CPC Strategy, n.d. Web. 12 Dec. 2014. <http://cpcstrategy.com/wp-content/uploads/2013/04/AbesMarketCaseStudy.pdf>.


There’s got to be a downside to this, right? Before you imagine a nightmare of

having to make thousands of ads for your product inventory, or adding one more

complex online strategy, here’s some good news: Google makes the ads for you.

You still have work to do, providing Google with high-quality images and product

details, such as price and availability. But most of your time and energy will be

spent managing campaign performance, not churning out ads.

This Blue Paper® will explore the story behind Google Shopping, reviewing its

history and growing influence in ecommerce. It will help retailers determine

whether a Google Shopping campaign is right for them as well as the costs

involved. Finally, it will consider not only what goes into setting up these

campaigns, but managing them as well.

What is Google Shopping?

Let’s start with a look at Google Shopping ads. A search for “men’s shoes” in

Google brings back a results page like you see in Figure 1. Those striking images

of shoes on the right side are the product listing ads we have been talking about.

These ads are often the most visually stimulating element on the results page,

helping explain their appeal. For buyers, what’s great about them is that they can

compare products immediately—they see the products, prices and sellers, without

having to visit unique websites. For sellers, the people who click on these ads

have had the chance to comparison shop and are often ready to buy when they

visit the website. And, the cost-per-click Google charges the seller, when someone

clicks on one of these ads, is often less than that of traditional text ads seen on

the left side of Figure 1.4

Figure 1: Google search results pages can be broken down into Google paid ads,

Google Shopping ads and organic results.

4 “New Way to Do PLAs.” http://cpcstrategy.com/. CPC Strategy, Jan. 2014. Web. 8 Dec. 2014. <http://cpcstrategy.com/google-shopping-campaigns-prelaunch/?utm_source=blogbillboard>.


Figure 2: Shoppers can filter products to find just what they are looking for within

Google Shopping

The history of Google Shopping

Google Shopping started in 2002 as a free service called Froogle that produced nice search results. Google described it as the “most comprehensive product search engine available on the Web.”5

This new service had Google’s usual touches—the products shown were decided by algorithms, or mathematical formulas. Froogle collected product information from two sources: retailer product feeds and webpage crawls. At the time, Google was more interested in simply helping shoppers find products than in providing quality information, customer reviews or any of that good stuff6—how times have changed!

The way it worked? Retailers simply registered with the service and started providing product information. Google encouraged retailers to update their information as often as possible, but there was no obligation or incentive to keep it fresh.

In 2007, Google finally gave up on the cute but underperforming name Froogle and became more serious about the service. Its new name, Google Product Search, provided a clearer description of what the service was about. As well as changing the name, Google made cosmetic changes to how the ads looked, based on

information collected about how people were using the still-free service.7

5 Sherman, Chris. “Online Shopping with Google’s Froogle.” Searchenginewatch.com. Incisive Interactive Marketing LLC., 11 Dec. 2002. Web. 8 Dec. 2014. <http://searchenginewatch.com/sew/news/2067723/online-shopping-googles-froogle>.

6 Sherman, Chris. “Online Shopping with Google’s Froogle.” Searchenginewatch.com. Incisive Interactive Marketing LLC., 11 Dec. 2002. Web. 8 Dec. 2014. <http://searchenginewatch.com/sew/news/2067723/online-shopping-googles-froogle>.

7 Sullivan, Danny. “Goodbye Froogle, Hello Google Product Search!” Searchengineland.com. Third Door Media, Inc., 18 Apr. 2007. Web. 9 Dec. 2014. <http://searchengineland.com/goodbye-froogle-hello-google-product-search-11001>.


Google changes everything

In 2012, Google realized what it had on its hands: a service popular with

retailers and loved by shoppers. This time it not only changed its name to

Product Listing Ads, but also its business model.8 For the first time in Google’s

history, it took a free, search-related service and started charging for it.

Needless to say, retailers were none too happy with the new “pay-to-play”

model. Google countered saying it would provide users with a better experience:

“We believe that having a commercial relationship with merchants will encourage

them to keep their product information fresh and current. 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.”9

While retailers were initially unhappy with the changes, most boarded the

bandwagon. And, in a relatively short period, more retailers than before were

participating due to the service’s enhanced value. RKG says the share of ad

impressions from shopping campaigns more than tripled after they went paid.10

Google’s “enhancements” continued, and in 2013 it started rolling out Google

Shopping campaigns as we know them today. Product Listing Ads campaigns

became officially called Google Shopping campaigns, although the names are

often still interchanged. The purpose of this change was to integrate Google

Shopping into AdWords, Google’s online advertising service.

Risks versus rewards

Before we jump into setting up a Google Shopping campaign and providing you a

comprehensive “how-to,” let’s pause and look at a few of the risks and challenges

some encounter.

Google is always improving

Paid Google Shopping campaigns are fairly new and regularly showcase new

features and reports. You will need to keep up-to-date with these changes as they

may have a major impact on your campaigns. For example, you can now provide

8 Sullivan, Danny. “Google Product Search To Become Google Shopping, Use Pay-To-Play Model.” Searchengineland.com. Third Door Media, Inc., 31 May 2012. Web. 9 Dec. 2014. <http://searchengineland.com/google-product-search-to-become-google-shopping-use-pay-to-play-model-122959>.

9 Samat, Sameer. “Building a Better Shopping Experience.” Googlecommerce.blogspot.com. Google, 31 May 2012. Web. 9 Dec. 2014. <http://googlecommerce.blogspot.com/2012/05/building-better-shopping-experience.html>.

10 Taylor, Andy. “PLAs Key to Beating Amazon in Search as Retail Giant Enhances Paid Presence.” Rimmkaufman.com. Merkle, 4 Dec. 2014. Web. 9 Dec. 2014.


Google with a Merchant Promotions feed highlighting special offers that you are

running. This feed adds a special offer line to your ads that shoppers can click on

to get details about an offer.

Shopping campaigns can be expensive at the start

Unlike regular text ad campaigns, where you tell Google the search terms your

ads should appear for, you have no such control in Shopping campaigns. Your ads

can display for any search query that matches a product you sell. And, Google

tends to be very liberal with your ads at the start, showing them for search

queries that are unlikely to convert. This can be expensive and why you need to

add unrelated terms to the negative keywords list. For instance, if you are an

eyeglass retailer, you may want to add the term “wine glasses” to your negative

keywords. Doing so will refine your ad exposure to be more aligned with the

right customers at the right time.

Google can suspend your campaign

While Google is likely to inform you if there is an issue with your campaign,

usually by email or a warning in the Merchant Center, your account can still

be suspended for any number of reasons. If this happens, reestablishing your

campaign can be challenging. You have to work with Google to ensure you

understand the issue and fix it. Issues often revolve around selling products

Google has decided to block or submitting a product feed that contains

information that does not match what is on your website.

Once you fix the issue, Google has to confirm it; only then will your ads start

appearing again. This whole process can take days or weeks. Subsequent

suspensions tend to take longer to resolve—as a kind of additional penalty. The

takeaway is that you need to stay on top of your product feed. Also, familiarize

yourself with Google Shopping policies, so you can spot potential problems

before they arise.

How to start your Google Shopping campaign

Are you ready to get started with Google Shopping? Here is a step-by-step guide

to help you build your campaign.

Step one—Send your data feed to your Merchant Center account:

In order for your products to show on Google Shopping, you have to send the

product information to your Merchant Center account. You do this through a


product data feed. You can learn all you need to know about product feeds right

here, but the basics are: You will use the data columns in your product feed to

divide your products into ad groups, so spend some time determining what you

want to include in your feed. Google has some obligatory columns that you must

provide, but there are also five columns, or custom labels, that you can use to

furnish additional information—for example best sellers or clearance items.

Step two—Set up your first shopping campaign:

Once Google has your product information, you’re ready to get started setting up

your first Google Shopping campaign. Simply log into your free Adwords account

to begin. If you don’t have an account, you can set one up here. Then, simply click

the “Campaigns” tab (see Figure 3), click on the red “+ Campaign” button and

select “Shopping.”

Figure 3: Shopping campaigns are now just another option under the

“Campaigns” tab in Adwords.

Step three—Set the campaign details:

Google offers a lot of different campaign settings (see Figure 4). You’ll likely not

use all them, however we’ll touch on each briefly:

1. Name the campaign: When choosing your campaign name, it’s always a

good idea to include the word “shopping” to make it easier to find among

your other campaigns.

2. Select the campaign type: Ensure the campaign type is still set at

“Shopping—Product Listing Ads.”


3. Link your Merchant Center Account: Under “Merchant Identifier,” you’ll

select the Merchant Center account you set up for this campaign. All of your

products are now available for the campaign—simple as that.

4. Set the “Country of Sale”: This option allows you to choose which country

you are targeting with your campaign. There are also some advance

location options, which we’ll get into a little later.

5. Set the campaign priority: You can set the campaign priority to low,

medium or high in the event that you have more than one Google

Shopping campaign. If that is the case, and you have products in more than

one campaign, the priority level decides which ad will show—even if the

bids are higher in the other campaigns.

6. Filter your products: The “inventory filter” setting allows you to limit the

products that feature in a campaign.

7. Pick the ad networks: Your ad networks tell Google where you want your

ads displayed. By default, they will be shown on Google search results pages

and partner sites, including YouTube®, Google Maps, AOL®, etc. You can,

however, deselect the partner sites.

8. Set your bids for mobile devices: By default, bids apply to ads that appear

on PCs, tablets and mobile phones. However, ads on cell phones do not

perform well for many campaigns. If this holds true for your product

ads, too, you can choose to lower your bids, in percentage terms, for ads

displayed to shoppers using their mobile phones.

9. Set bids by geography: This setting allows you to change bids based on

a shopper’s location. If, for instance you are targeting the U.S., and you

determine that your ads do really well in Illinois, for instance, you can

simply tell Google to raise your bids for shoppers based in that area. You

can also treat shoppers differently based on whether they are in Illinois, for

example, or are somewhere else just looking for information on Illinois.

10. Set your shopping channel: Google Shopping ads work for both in-store

and online retailers. Choose your shopping channel to let Google know

if you are advertising products from your website, your store, or both. If

you choose both, you will need to provide separate product feeds for your

website and your store.

11. Set your bid strategy: Bidding is one of the things Google uses to

determine whether your products will show on search results pages. The

higher the bid, the greater the likelihood that your product will be one of

the first to be seen by shoppers. You can set bids manually or have Google

set them for you automatically using predetermined parameters. For

example, if you can’t afford to spend more than $5 on ads for every sale,

you can set a cost-per-conversion (CPA) target of $5. Google will automate

bids to deliver sales at that level. Bidding is really a science in itself; you

can read up on the basics here.


12. Set your budget: Google will continue to show your ads until your preset

daily budget runs out. It’s important to keep a close eye on this as you

don’t want ads that are performing well to stop showing because your

daily budget has been reached.

13. Set your delivery method: Google shows your ads at either a standard or

accelerated rate. With the standard rate, ads are spaced out over the day,

based on your daily budget. This is a good option if you want to ensure

your ads show throughout the entire day. The accelerated rate shows your

ads every time they are eligible, until the budget runs out. Meaning you

may exhaust your budget first thing in the morning. Choose this option if

you want your ads to receive the maximum amount of impressions.

14. Schedule your ads: You can set start and finish dates for ad campaigns, and

it’s also possible to customize your schedule to show ads on specific days

or during certain hours. For instance, if campaigns perform better over the

weekend, you can opt to raise bids for Saturday and Sunday.

15. Exclude IP addresses: This setting simply allows you exclude certain IP

addresses from seeing ads. For instance, you may want to exclude your

own company’s IP address to avoid paying for ad impressions viewed by

employees.

16. Add a tracking URL: This option allows you to add code to ad links in order

to track campaign performance in Google Analytics.

Figure 4: Fill out a name for your campaign and link your Adwords account to

your Merchant Center account.


Figure 5: You have the option of creating one bid for All Products.

Step four—Determine product grouping:

If your products are in one group you can simply set a default bid, and ads

for single products will have the same bid. Voila—you’re in business. You can,

however, choose to break out additional product groups—by brand, for example.

Simply click on the pencil icon (see Figure 5) and a pop-up window appears (see

Figure 6). Here you can group your products based on the attributes in your

product feed. You have 10 options for creating your first sub-groupings. They are:

1. Category—Google uses its own taxonomy of categories. For instance,

Apparel & Accessories, Media or Software. Each of these can be further

broken down into sub-categories. For a complete list, click on Google

Product Category.

2. Brand—Categorize products by brand name.

3. Item ID—Identify each item within your account with a unique item ID.

4. Condition—Let shoppers know if your product is new, refurbished or used.

5. Product Type—Categorize products by type; for instance, men’s shoes, men’s

boots, etc.

6. Custom Label 0 to 4—Custom labels give you five additional ways to

categorize as you like; for example by margin, best-sellers, seasonality, etc.


Figure 6: You can now start to subdivide your All Products group containing all

your products.

If you are unsure how to group your products, try using All Products and one

or two subgroups—best sellers and high margin, for example. Then, bid low

and wait. Once you know what’s working, raise your bids and build out

additional product groups—perhaps by medium margin and low margin,

for example, or seasonality.

And experiment with your product feed, too. Eyeglass retailer Zenni

Optical®,which sells around 4,000 products on its site, revamped its feed and saw

a boost in revenue of 382.26 percent, website visitors by 79.68 percent and orders

by 302.56 percent.11 The team behind this revamp said: “Your feeds need to be in

tip-top shape. They’re the foundation for successful shopping engine campaigns

and will make-or-break performance.”

Step five—Further subdivide your groups:

Once you get the hang of things, try further subdividing your groups to create

a multi-layer campaign. Here’s a simple way to think about breaking down your

product groups. Pretend you’re running a shoe store. You may initially group your

products by category—men’s shoes, women’s shoes, kids’ shoes, for example. You

may then subdivide these categories by brand and then those brands by high

margin, medium margin and low margin. You now have a campaign with three

layers: category, brand and margin.

11 “How CSE CAMPAIGN Longevity Pays Off in Overall Increases of +382.26% in Revenue and +302.56% in Orde.” Http://cpcstrategy.com/. CPC Strategy, n.d. Web. 12 Dec. 2014. <http://cpcstrategy.com/wp-content/uploads/2013/11/Zenni-Optical.pdf>.


You will notice when you are setting up these groups there is always an

“Everything else in ‘All products’” option. This is a catch-all for products that are

not assigned a category. It is a good idea to set a very low bid here, just to make

sure that all of your products are included in your campaign.

Managing your Google Shopping campaigns

Congrats! Your campaign is now up and running—groups have been set

and bids established. Now, you need to keep an eye on costs. Shopping

campaigns, especially at the start, can become expensive fast. Here are

some reports and figures to help you manage your campaign—and they

can all be found in Adwords.

Search term report

When you are starting your campaign, the “Search terms” report (see Figure 7)

may become your best friend. This report shows all the terms that shoppers have

used for which Google has decided to display your ads. You can download this

report, identify the terms you know will not work for your company, and add

them as negative keywords. Google will never show your ads again for those

terms. To add negative keywords, click on the “Keywords” tab, select “Add

negative keywords” and paste them in.

Figure 7: You can find your “Search terms” report under the “Dimensions” tab.

Benchmark CTR and max CPC

Google provides benchmark click-through-rates (CTR)—how often ads are being

clicked on—and benchmark maximum cost-per-click (CPC) data—the maximum

bids people are willing to pay for their ads to show. These numbers provide you

with industry averages for similar shopping campaigns. Be careful though; it’s

often good to bid lower than these benchmarks suggest and only raise your bids

if campaign performance warrants it.


Impression share12

Your impression share tells you how often your ads are appearing compared to

how often they could appear if you were bidding more. For example, if a product

is selling well, but its ads are only showing 50 percent of the time, you should try

raising your bids.

Products tab

The information in the products tab mirrors what’s in your product feed and

provides a simple way of checking that the feed has been set up correctly.

Bid simulator

Google will often provide estimates of how your ads will perform at various

bid levels. This may include the number of expected ad impressions, clicks, and,

sometimes sales. This is not 100 percent accurate as it is a simulator, so taking that

into account is essential.

Auction insights13

With auction insights, you can see how often your ads appear alongside other

advertisers and how often your ads appear before theirs.

Bid modifiers

As the campaign develops and is producing results, it is possible to experiment

with either raising or lowering bids based on factors such as geographic location,

time of day and device (desktop or mobile). For example, you can decide to raise

bids in the evenings by 20 percent, or maybe you want to reduce bids on mobile

devices by 30 percent. Bid modifiers are available in campaign settings (see Figure 8.)

Figure 8: You can modify your bids in campaign settings.

12 Mulpuru, Sucharita. “US ECommerce Grows, Reaching $414B By 2018, But Physical Stores Will Live On.” Forbes.com. Forbes, 12 May 2014. Web. 11 Dec. 2014. <http://www.forbes.com/sites/forrester/2014/05/12/us-ecommerce-grows-reaching-414b-by-2018-but-physical-stores-will-live-on/>.



You can also set a flexible bid strategy for your campaign. For example, if you

set the bid strategy as “enhanced cost-per-click (CPC),” you are giving Google

permission to raise your maximum bid by 30 percent if it thinks there is a greater

chance of securing the sale. Google uses its knowledge of user behavior and many

other factors to determine whether to raise your bid.

Product exclusion

It is also possible to exclude underperforming products. You can lower your bids

on these products or exclude them from the group—just click “Excluded” after

clicking on your bid (see Figure 9.)

Figure 9: You can exclude products from your groups.

Product descriptions14

One last tip—but it only applies if you have a small number of products in your

campaign. When you are going through the search-term report, you may find

words that lead to sales but are not featured in your product feed. Try rewriting

the product descriptions to include these terms and see if there is a lift in sales.

The future of Google Shopping

What lies ahead for Google Shopping? It’s impossible to predict; however,

shoppers are increasingly turning to Google Shopping and Amazon® to buy

products online. According to Forbes®, U.S. ecommerce sales will total $294 billion

this year, and hit $414 billion by 2018.15 And, Google is well-positioned to get a

big slice of that pie. In one recent experiment, for example, Google presented

people who were shopping for popular brands with the option to browse those

brands’ product categories within Google Shopping, without ever going to the

retailer’s website.16 It shows Google is toying with the idea of developing Google

Shopping into a complete marketplace—one where shoppers can buy products on

search pages without having to visit retailer websites at all.

14 Newton, Jamie. “8 Tips To Optimize Your Google Shopping Campaigns.” Ppchero.com/. Hanapin Marketing LLC., n.d. Web. 11 Dec. 2014. <http://www.ppchero.com/webinar-recording-8-tips-to-optimize-your-google-shopping-campaigns/>.


16 Marvin, Ginny. “In A Big Shift, Google’s Latest Ad Test Drives Users To Google Shopping, Not Advertisers’ Sites.” Searchengineland.com. Third Door Media, Inc., 12 Nov. 2014. Web. 11 Dec. 2014. <http://searchengineland.com/google-shopping-ad-test-brand-search-category-pla-207735>.


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A real reta i l opportunity

Google Shopping campaigns have a proven track record with retailers. They

grab searchers’ attention, can cost less and outperform traditional search ad

campaigns. If you sell products online, whether it is just a few items or thousands,

it may well be worth experimenting with them. There is a little bit of work

involved in setting the campaigns up, but once done, products are easy to

manage in AdWords.

Google is clearly putting a lot of resources into improving the shopping

experience for both retailers and searchers. This probably means Google will

continue to roll out new features to improve campaign performance. But it also

means you may have to spend more time staying up-to-date with campaign

developments. Ultimately, with many retailers reporting traffic of 25 percent

coming from these campaigns—that may be time well spent.

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