Google Shopping Paid Placement – Early Results

If you’ve been listing data feeds on Froogle Google Product Search Google Merchant Center Google Shopping over the last couple of years, you’re probably aware of the big, big change they have been rolling out recently. Instead of giving your data feed free exposure to searchers, in the future you’re going to have to pay for that placement. This new paid format will run on a PPC model within your AdWords account. The official name is Product Listing ads, or PLAs.

I won’t go into how to set up PLAs here (you can find out how in this Google help file because today I want to talk about my results. At BuildASign, we’ve been doing some pretty thorough data feed advertising over the past few years, so we knew we were going to have to put in a significant time investment to switch over to the new format. Google even gave us an incentive, offering an advertising discount if we got everything ready by the August 15th deadline. We were able to get everything set up in time, so right now we’re looking at about a month of data to see how it’s working.

Unfortunately, I’m not able to share some actual results (my boss would kill me for spilling company secrets), but I can tell you that what I’m seeing so far looks really really good. Cost per conversion is a fraction of what we’re seeing in other PPC campaigns (although I guess you could say that the $0 CPA in the free format looked even better). Traffic isn’t as high as I was hoping, but Google is still in transition. The number of clicks will start to increase as Google directs less traffic to their free shopping feeds, and more traffic to the product listing ads.

So why is everything looking so rosy? My guess is that there’s a lack of competition in this advertising space, but still a steady stream of customers. Users are still finding products via Google Shopping, but many advertisers lacked the ambition or resources to switch over to the paid format right away. As a result, if you can afford to run some product listing ads, you’re going to get some valuable advertising space for really cheap until the advertising market catches up to the opportunity.

I know that there has been a lot of grumbling about Google taking a free product and starting to charge for it, but I think it’s a good thing. First off, to the whiners: Google doesn’t owe you anything for free. It certainly wasn’t a problem when you were getting all that free, profitable traffic, and now that Google wants to get a small advertising cut on a product they invested time and money in, a lot of business people are in a huff. Face the facts, folks. There’s no such thing as a free ride in online advertising anymore. The days of five-cent PPC clicks and massive SEO traffic with little effort are long gone. Online marketing is a hugely profitable channel, so unless you’re willing to invest the same time and money that people have put into other (arguably obsolete) channels in the past, you’d better get used to failure.

Ranting aside, I also think that charging for Google Shopping placement puts an important quality control in place. When the feeds were free, businesses had little incentive to optimize data quality because there was no expense to having a crappy feed (unless you count the “expense” of lost conversions). Now, if you have a crappy feed, you’re not only going to lose customers, you’re also going to lose ad dollars. So this incentive for quality not only incentivizes advertisers for creating great product listing ads, it also provides users with a better searching experience that will help them find what they’re looking for.

So right now, Google product listing ads are a pretty good deal. Check them out. There’s no telling how long this lack of competition will last, so there’s no guarantee that this awesome performance will last forever. Get in while you can!

About Shawn Livengood

Shawn Livengood is a search engine marketing professional based in Austin, Texas. He has extensive experience managing pay-per-click ad campaigns for clients in various industries, from small home-based businesses to large international companies. You can connect with Shawn on Google+.
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