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What Retailers Need to Know
                                About Google Shopping

By Mike Dobbs, Group SEO Director with Bruce Williams, Associate Media Director
and David Randolph, VP of Retail at 360i



    Executive Summary
Google has announced that its Product Search feature will soon transition to a purely paid model, called
Google Shopping. Previously, the shopping experience and product feed management service has been
a free inclusion service, but by Oct. 1st this year merchants must pay to be listed in Google Shopping.

We estimate that anywhere from 5 to 10 percent of search traffic to a retailers’ website currently comes
from Product Search, so the change could have a significant impact on retailers’ search performance. A
more precise approximation won’t be available until this fall, but marketers should keep in mind that the
conversion rate for these shopping-focused searchers will be higher than it is for other paid efforts in
Google. This is an important slice of traffic that retailers will want to keep a close eye on.

Merchants can participate via a CPC or CPA model that is powered by Product Listing Ads (PLA) – an
existing AdWords product that retail marketers have grown familiar with in recent years. The former
Google Product Search will fade away as PLA-powered listings gradually usurp the sponsored space.
This report highlights what the shift will mean for advertisers, and how brands should prepare.

Key Takeaways:

    1. Marketers can begin preparations now. Although the full transition from Product Search to
        Shopping will take place this fall, marketers can begin their transition now. Early adoption will
        be advantageous for retailers aiming to be in full swing by the holiday season and will allow time
        to fix any unforeseen challenge in advance. Improving product feed quality and freshness should
        also be a major consideration with product attributes supporting long-tail relevance. Rich
        product attributes will lead to broad match equivalence for this form of AdWords.

    2. Retailers have more control to capture demand. As Google changes the visual display of
        where products are promoted within results, clicks will migrate from free to pay-per-click. The
        audience size remains the same, so it’s not necessarily additive or incremental business that is up
        for grabs. Instead the opportunity presented is that marketers can increase bids for specific
        products or categories of products to capture more of this demand while promoting specific
        inventory and improving conversion rate optimization.

    3. Brands will benefit by staying nimble during the roll-out. Google won’t have all the answers
        during this major transition. For example, budgeting will be a dynamic challenge as many
merchants transition over to the paid model, while others choose to opt out entirely. Brands can
        expect Product Search results to be in-flux over the summer and into the early fall. Since bidding
        on PLAs is not exact match keyword targeted, understanding product feed attributes will be an
        important factor of query relevance and long-tail visibility. Moreover, Google’s display of PLAs
        within the main search results will be refined based on user behavior.



    What is changing?
Google’s product comparison engine was first launched as a free service for merchants under the name
“Froogle” back in 2002. At the time, Google opened the doors to product feeds from those merchants
who could share inventory details about each product URL maintained (FTP process). Since then, more
and more merchants have proactively sent their product data to Google via a data feed process. Today,
nearly all major retailers participate within Google’s merchant center and retailers big and small have
enjoyed a healthy amount of free activity from these natural results.

The Google AdWords platform will now feature two distinct paid opportunities for advertisers. The first is
AdWords – Google’s standard text ads with standard keyword targeting that have been in place for
years. The second is Product Listing Ads (PLAs), which are standalone shopping ad formats that use
product information from an advertiser's Google Merchant Center account. These ads will not use
standard keyword targeting and are only available to merchants who make the transition onto the new
Google Shopping program via PLA.

PLAs include rich product information, such as product image, price and merchant name. While Google
is still testing the display options, these newer Product Listing Ads will help retailers visually stand out
from the competition and eliminate the clutter of duplicate listings.

To ensure a cleaner display, Google will likely use the new “right panel” space similar to how Google’s
knowledge graph uses a top right portion of Google’s results. This real estate will show sponsored
details for top bidding merchants. Google is also testing format that directly occupies traditional, top of
page AdWords real estate. This new placement is already emerging in market and is likely to be a
prominent placement for PLAs moving forward. A few examples of how the Product Listing Ads might
look:
   Ex. #1: At the top, just below Text AdWords            Ex. #2: Top right side panel of Google SERPs
Transitioning to a fully paid model will eliminate the perks of having free listings, but the shift will likely
benefit retailers seeking added controls. Moreover, since blended “shopping results” will soon be
eliminated from Google’s natural listings, retailer web pages (per product URLs) will have less product
clusters to compete against within pure natural web rankings. This will spell good news for brands with
strong natural search presences – specifically retailers leveraging “Rich Snippets” or Schema.org markup
on product web pages. Leveraging this type of enhanced SEO coding can differentiate amongst the
natural results.




                      Example: Retailer’s Product Page listing within Natural results,
                            applying Rich Snippets or Schema.org markup



    Marketer Benefits of Moving from Free to Paid
While critics may argue that Google’s intent is to generate more revenue, the company maintains that
the change will increase result quality and give retailers new control over product result ads.



    ?   Less clutter. Per Google, the move to a paid model will remove some of the result clutter (or
        duplication) while improving personalization and reliability of product information to their users.
        Google expects that the new model will inspire marketers to supply higher quality data and
        provide more frequent feed updates. The paid model will also eliminate merchants who attempt
        unethical feed practices, such as switching prices, redirecting landing pages or feeding in other
        inaccurate info.

    ?   More control. Larger retailers stand to benefit from greater control that will allow them to
        influence traffic volume and promotion of specific categories or specific products for a given
        time frame. For many brands, paying for this control is a worthwhile trade-off as they will now be
        able to eliminate unexplained fluctuations in volume or layer in differentiation within the Product
        Listing Ads results.


Evaluating how Google plans to display these listings on top of natural results or in the new top right
side panel will be important as user behavior adapts to Google’s current testing. As such, marketers will
need to understand how the paid activity for “product search” is effectively funneled through both
AdWords and Product Listing Ads.
How Will the Change Impact Planning, Strategy &
Measurement?
Brands have less than four months to prepare for the move to a fully paid model – a change which
stands to influence all phases of their Google Shopping program: from planning to strategy to
measurement. Below we explore the impact on each.

Budgets & Planning: Retailers active in Google Product Search should begin considering how the move
to a paid model will impact their budgets. A shift in dollars will be imminent for retailers that wish to
maintain the benefit of appearing in Google Shopping results and capturing product-specific clicks
within Google.com. Retailers will also want to consider the evolved opportunities during the holiday
season and potential lift that might occur during peak periods of shopping activity. 360i estimates that,
conservatively, Google Shopping makes up more than 50 percent of the shopping comparison clicks
within the comparison shopping engine (CSE) marketplace.

For those marketers seeking to maintain a presence within shopping results, adding modest budgets–
allowing for the lowest bid of $.01 – will ensure a baseline of visibility until larger budgets are secured.
Moreover, advertisers can work to estimate the potential incremental cost and analyze of how that might
fit within overall performance. While volume and competition data are not available, marketers can get a
head start by working from baseline figures.

Marketers will need to continue their active management of product inventory and look for new ways to
improve feed delivery or quality of data.

Bidding Strategy & Relevance Scoring: A retailer’s search agency – or whoever directly manages
bidding strategy within AdWords – will be best positioned to manage desired visibility and return on ad
spend (ROAS), even though the feed attributes play an important role. Since bidding on Product Listing
Ads is product based (not keyword based), marketers will be able to bid, control and optimize via
attributes in the feed. Through AdWords, this is currently supported with the creation of Product
Targets, which enable the ability to group products, create special promotions, and bid differently per
product target.

Familiarity with the product feed to hone-in on specific attributes of product targets will become more
important. In addition, implementing rules for negative keywords will remain a useful option of PLAs.
This is a big shift from standard AdWords bidding, based on targeting an exact keyword.

Moreover, understanding the additional relevancy factors at play will become important. While these
factors are not yet clear, it is likely that PLA rankings for a given search will be determined by a
combination of the retailer’s bid, product attributes, trusted store verification, product landing page and
a series of weighting factors like reviews or rating information – a spinoff of Q Score as used on basic
AdWords. Learning the new bidding and relevancy relationships will be a critical piece of effectively
managing the new channel.

Measurement: The new Shopping channel adds another layer to the search mix. As such, the interplay
between the new Product Listing Ads compared with Text AdWords and natural search will require some
test and learn time.
Next Steps for Marketers
For retailers currently participating in Google Product Search as a free model, there are several next
steps to consider over the next four months to ensure a smooth transition to the new Google Shopping
product. Below is a check-list for marketers ahead of the Oct. 1 changeover:

    1. Anticipate shifts in planning and/or budgeting early. Retailers have just a few months to
        prepare for the transition, so conversations regarding how best to migrate to the new model
        should commence as soon as possible.

    2. Align search specialists across SEM and SEO. The integrated search team will need to
        understand all levers controlling cost, strategic product visibility and optimization strategies.
        Collaboration across teams will be critical to a successful migration from Product Search to
        Shopping.

    3. Continue improving inventory management processes. Retailers should strive to quickly
        refresh product details with Google’s Merchant Center or intermediary technology platforms that
        manage the brand’s CSEs. Focusing on quality feeds and creating specific product attributes at a
        keyword-level for each product or SKU will remain important. This will provide differentiation on
        parameters, such as color, durability, flexibility and more -- which are often filters used by
        comparison shoppers or a trigger for PLA relevance. You will also want to ensure that the
        appropriate AdWords and third-party tracking parameters are set up to correctly measure traffic
        from Product Listings Ads.

    4. Connect Google Merchant Center to AdWords, if you have not done so already. This will
        enable Google Product Listings and advance campaign settings to be launched and managed in
        Google AdWords – across both Google Shopping and Google Search. Further, Google
        recommends that retailers apply to be verified as a Trusted Google Store.

    5. Conduct an assessment of the competitive landscape. Determine opportunities for specific
        products or categories as compared to online competitors. Think ahead as to how the move will
        impact the holiday season and plan accordingly. Also, assess your brand’s ratings and reviews to
        improve areas of weakness before the transition takes place.

    6. Follow updates as they come. Retailers should stay on the edge of their seats during this
        rollout. Great investment often leads to greater development and the potential of newer
        features, such as improved reporting dashboards, integration with Google+ (connecting
        Shopping with Google+ pages) and enhancements to the way brands leverage Google Offers to
        promote during peak shopping periods.



                                                                                      - Published June 2012
About 360i
360i is an award-winning digital marketing agency that drives results for Fortune 500 marketers through
insights, ideas and technologies. 360i helps its clients think differently about their online presence and
evolve their strategies to take advantage of the new world of marketing communications – one where
brands and consumers engage in interactive and multi-directional conversations. In 2010, Ad Age
named 360i to its prestigious Agency A-List. Current clients include Kraft Foods, JCPenney, Coca-Cola,
NBC Universal and Diageo, among others. For more information, please visit http://www.360i.com or
follow us on Twitter @360i.




     Ways to Connect With 360i

           360i.com/insights            blog.360i.com            twitter.com/360i             editor@360i.com

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360i POV: Google Shopping Update

  • 1. What Retailers Need to Know About Google Shopping By Mike Dobbs, Group SEO Director with Bruce Williams, Associate Media Director and David Randolph, VP of Retail at 360i Executive Summary Google has announced that its Product Search feature will soon transition to a purely paid model, called Google Shopping. Previously, the shopping experience and product feed management service has been a free inclusion service, but by Oct. 1st this year merchants must pay to be listed in Google Shopping. We estimate that anywhere from 5 to 10 percent of search traffic to a retailers’ website currently comes from Product Search, so the change could have a significant impact on retailers’ search performance. A more precise approximation won’t be available until this fall, but marketers should keep in mind that the conversion rate for these shopping-focused searchers will be higher than it is for other paid efforts in Google. This is an important slice of traffic that retailers will want to keep a close eye on. Merchants can participate via a CPC or CPA model that is powered by Product Listing Ads (PLA) – an existing AdWords product that retail marketers have grown familiar with in recent years. The former Google Product Search will fade away as PLA-powered listings gradually usurp the sponsored space. This report highlights what the shift will mean for advertisers, and how brands should prepare. Key Takeaways: 1. Marketers can begin preparations now. Although the full transition from Product Search to Shopping will take place this fall, marketers can begin their transition now. Early adoption will be advantageous for retailers aiming to be in full swing by the holiday season and will allow time to fix any unforeseen challenge in advance. Improving product feed quality and freshness should also be a major consideration with product attributes supporting long-tail relevance. Rich product attributes will lead to broad match equivalence for this form of AdWords. 2. Retailers have more control to capture demand. As Google changes the visual display of where products are promoted within results, clicks will migrate from free to pay-per-click. The audience size remains the same, so it’s not necessarily additive or incremental business that is up for grabs. Instead the opportunity presented is that marketers can increase bids for specific products or categories of products to capture more of this demand while promoting specific inventory and improving conversion rate optimization. 3. Brands will benefit by staying nimble during the roll-out. Google won’t have all the answers during this major transition. For example, budgeting will be a dynamic challenge as many
  • 2. merchants transition over to the paid model, while others choose to opt out entirely. Brands can expect Product Search results to be in-flux over the summer and into the early fall. Since bidding on PLAs is not exact match keyword targeted, understanding product feed attributes will be an important factor of query relevance and long-tail visibility. Moreover, Google’s display of PLAs within the main search results will be refined based on user behavior. What is changing? Google’s product comparison engine was first launched as a free service for merchants under the name “Froogle” back in 2002. At the time, Google opened the doors to product feeds from those merchants who could share inventory details about each product URL maintained (FTP process). Since then, more and more merchants have proactively sent their product data to Google via a data feed process. Today, nearly all major retailers participate within Google’s merchant center and retailers big and small have enjoyed a healthy amount of free activity from these natural results. The Google AdWords platform will now feature two distinct paid opportunities for advertisers. The first is AdWords – Google’s standard text ads with standard keyword targeting that have been in place for years. The second is Product Listing Ads (PLAs), which are standalone shopping ad formats that use product information from an advertiser's Google Merchant Center account. These ads will not use standard keyword targeting and are only available to merchants who make the transition onto the new Google Shopping program via PLA. PLAs include rich product information, such as product image, price and merchant name. While Google is still testing the display options, these newer Product Listing Ads will help retailers visually stand out from the competition and eliminate the clutter of duplicate listings. To ensure a cleaner display, Google will likely use the new “right panel” space similar to how Google’s knowledge graph uses a top right portion of Google’s results. This real estate will show sponsored details for top bidding merchants. Google is also testing format that directly occupies traditional, top of page AdWords real estate. This new placement is already emerging in market and is likely to be a prominent placement for PLAs moving forward. A few examples of how the Product Listing Ads might look: Ex. #1: At the top, just below Text AdWords Ex. #2: Top right side panel of Google SERPs
  • 3. Transitioning to a fully paid model will eliminate the perks of having free listings, but the shift will likely benefit retailers seeking added controls. Moreover, since blended “shopping results” will soon be eliminated from Google’s natural listings, retailer web pages (per product URLs) will have less product clusters to compete against within pure natural web rankings. This will spell good news for brands with strong natural search presences – specifically retailers leveraging “Rich Snippets” or Schema.org markup on product web pages. Leveraging this type of enhanced SEO coding can differentiate amongst the natural results. Example: Retailer’s Product Page listing within Natural results, applying Rich Snippets or Schema.org markup Marketer Benefits of Moving from Free to Paid While critics may argue that Google’s intent is to generate more revenue, the company maintains that the change will increase result quality and give retailers new control over product result ads. ? Less clutter. Per Google, the move to a paid model will remove some of the result clutter (or duplication) while improving personalization and reliability of product information to their users. Google expects that the new model will inspire marketers to supply higher quality data and provide more frequent feed updates. The paid model will also eliminate merchants who attempt unethical feed practices, such as switching prices, redirecting landing pages or feeding in other inaccurate info. ? More control. Larger retailers stand to benefit from greater control that will allow them to influence traffic volume and promotion of specific categories or specific products for a given time frame. For many brands, paying for this control is a worthwhile trade-off as they will now be able to eliminate unexplained fluctuations in volume or layer in differentiation within the Product Listing Ads results. Evaluating how Google plans to display these listings on top of natural results or in the new top right side panel will be important as user behavior adapts to Google’s current testing. As such, marketers will need to understand how the paid activity for “product search” is effectively funneled through both AdWords and Product Listing Ads.
  • 4. How Will the Change Impact Planning, Strategy & Measurement? Brands have less than four months to prepare for the move to a fully paid model – a change which stands to influence all phases of their Google Shopping program: from planning to strategy to measurement. Below we explore the impact on each. Budgets & Planning: Retailers active in Google Product Search should begin considering how the move to a paid model will impact their budgets. A shift in dollars will be imminent for retailers that wish to maintain the benefit of appearing in Google Shopping results and capturing product-specific clicks within Google.com. Retailers will also want to consider the evolved opportunities during the holiday season and potential lift that might occur during peak periods of shopping activity. 360i estimates that, conservatively, Google Shopping makes up more than 50 percent of the shopping comparison clicks within the comparison shopping engine (CSE) marketplace. For those marketers seeking to maintain a presence within shopping results, adding modest budgets– allowing for the lowest bid of $.01 – will ensure a baseline of visibility until larger budgets are secured. Moreover, advertisers can work to estimate the potential incremental cost and analyze of how that might fit within overall performance. While volume and competition data are not available, marketers can get a head start by working from baseline figures. Marketers will need to continue their active management of product inventory and look for new ways to improve feed delivery or quality of data. Bidding Strategy & Relevance Scoring: A retailer’s search agency – or whoever directly manages bidding strategy within AdWords – will be best positioned to manage desired visibility and return on ad spend (ROAS), even though the feed attributes play an important role. Since bidding on Product Listing Ads is product based (not keyword based), marketers will be able to bid, control and optimize via attributes in the feed. Through AdWords, this is currently supported with the creation of Product Targets, which enable the ability to group products, create special promotions, and bid differently per product target. Familiarity with the product feed to hone-in on specific attributes of product targets will become more important. In addition, implementing rules for negative keywords will remain a useful option of PLAs. This is a big shift from standard AdWords bidding, based on targeting an exact keyword. Moreover, understanding the additional relevancy factors at play will become important. While these factors are not yet clear, it is likely that PLA rankings for a given search will be determined by a combination of the retailer’s bid, product attributes, trusted store verification, product landing page and a series of weighting factors like reviews or rating information – a spinoff of Q Score as used on basic AdWords. Learning the new bidding and relevancy relationships will be a critical piece of effectively managing the new channel. Measurement: The new Shopping channel adds another layer to the search mix. As such, the interplay between the new Product Listing Ads compared with Text AdWords and natural search will require some test and learn time.
  • 5. Next Steps for Marketers For retailers currently participating in Google Product Search as a free model, there are several next steps to consider over the next four months to ensure a smooth transition to the new Google Shopping product. Below is a check-list for marketers ahead of the Oct. 1 changeover: 1. Anticipate shifts in planning and/or budgeting early. Retailers have just a few months to prepare for the transition, so conversations regarding how best to migrate to the new model should commence as soon as possible. 2. Align search specialists across SEM and SEO. The integrated search team will need to understand all levers controlling cost, strategic product visibility and optimization strategies. Collaboration across teams will be critical to a successful migration from Product Search to Shopping. 3. Continue improving inventory management processes. Retailers should strive to quickly refresh product details with Google’s Merchant Center or intermediary technology platforms that manage the brand’s CSEs. Focusing on quality feeds and creating specific product attributes at a keyword-level for each product or SKU will remain important. This will provide differentiation on parameters, such as color, durability, flexibility and more -- which are often filters used by comparison shoppers or a trigger for PLA relevance. You will also want to ensure that the appropriate AdWords and third-party tracking parameters are set up to correctly measure traffic from Product Listings Ads. 4. Connect Google Merchant Center to AdWords, if you have not done so already. This will enable Google Product Listings and advance campaign settings to be launched and managed in Google AdWords – across both Google Shopping and Google Search. Further, Google recommends that retailers apply to be verified as a Trusted Google Store. 5. Conduct an assessment of the competitive landscape. Determine opportunities for specific products or categories as compared to online competitors. Think ahead as to how the move will impact the holiday season and plan accordingly. Also, assess your brand’s ratings and reviews to improve areas of weakness before the transition takes place. 6. Follow updates as they come. Retailers should stay on the edge of their seats during this rollout. Great investment often leads to greater development and the potential of newer features, such as improved reporting dashboards, integration with Google+ (connecting Shopping with Google+ pages) and enhancements to the way brands leverage Google Offers to promote during peak shopping periods. - Published June 2012
  • 6. About 360i 360i is an award-winning digital marketing agency that drives results for Fortune 500 marketers through insights, ideas and technologies. 360i helps its clients think differently about their online presence and evolve their strategies to take advantage of the new world of marketing communications – one where brands and consumers engage in interactive and multi-directional conversations. In 2010, Ad Age named 360i to its prestigious Agency A-List. Current clients include Kraft Foods, JCPenney, Coca-Cola, NBC Universal and Diageo, among others. For more information, please visit http://www.360i.com or follow us on Twitter @360i. Ways to Connect With 360i 360i.com/insights blog.360i.com twitter.com/360i editor@360i.com
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