Google Shopping Changes in UK from February 13th 2013

Google Shopping paid for service 

What is happening to Google Shopping / Google Merchant Centre?
Google Merchant Centre, one of Google’s free products for eCommerce, is due to become monetised and linked to AdWords, here in UK (also in Germany, France, Japan, Italy, Spain, Netherlands, Brazil, Australia and Switzerland) as of tomorrow. There will no longer be a free service.

Google is planning to roll out a new commercial model for Google Shopping, built on Product Listing Ads (PLA). To keep Product Search listings active on Google, businesses will need to set up a Product Listing Ads campaign in Google AdWords.

Product Listing Ads are ‘AdWords search ads’ that include rich product information, such as product image, price and merchant name. Whenever a user enters a search query on Google.co.uk relevant to an item a business is selling, Google will automatically show the most relevant products along with the associated image, price and product name.

When is Google Shopping / Google Merchant Centre changing?
In order to give merchants time to make this transition and optimise their campaigns, Google plans to roll out the new model gradually, via several steps. The first major change will take place on February 13, 2013, when visually cleaner results for shopping queries, including some new commercial formats on Google.com that will display products in a single unit, will replace current search results. These new commercial formats will be labelled as "Sponsored" and appear in the space currently occupied by AdWords ads.

Google Shopping sponsored  ads

The full changeover is expected to have been implemented sometime in June 2013.

Why is to Google Shopping / Google Merchant Centre changing?
Google is quoted as saying these improvements will create a better shopping experience that will benefit both shoppers and merchants. Shoppers will find products in one convenient place and quickly be able to compare features, find the best prices, read reviews, and identify great merchants -- while advertisers will be given more granular control over product listings and traffic.

Impact of Google Shopping / changes:
Many of our eCommerce clients who are performing well in organic search and have benefited from Google Shopping need now to decide whether they should in fact also consider a paid search campaign, as part of an Integrated Digital Marketing Strategy. Google Product Search allows consumers to easily find product listings and compare products by relevance and price in a Google search. Until now the registered Merchants streamed products via an XML feed with price, image, attributes etc, directly into the Merchant Centre, which then automatically showed up in the Google Shopping and Search Results.

Regular updates of the XML feed ensured that the prices, product description and stock levels were kept current.

Google Shopping free XML feed

To some extent, this move to a paid inclusion model, or ‘paid for service’ of the shopping results may help create a more level market by allowing smaller and larger businesses to equally bid for top positions. However, businesses with tighter profit margins and smaller budgets will find this new market may also be restrictive when it comes to assigning budget.

It will be interesting to see if Google Shopping will overtake eBay as the world's leading global commerce platform. Google is already pushing down the natural search results of Amazon in USA where Google Shopping is already being used and accounts for 11% of overall paid search spend.

It is doubtless that Google offers some of the most amazing free products from Google Analytics to Webmaster Tools, from regular products most of us already use like Gmail, YouTube, Picasa, Translate, G+, Blogger to some of the more niche and useful products like Creative Sandbox Gallery and Research Library in ‘thinkinsights’

Google offers many useful free products

How much will Google Shopping cost?
Paying for a product which was traditionally free is always a hard sell-in but with Google Shopping it really is still a great product for busy eCommerce businesses. What other online location is there that has 90% of all UK search traffic potentially looking for products to purchase.

Google is offering a short discount to merchants who create a Product Listing Ad campaign before 12 April 2013. The offer is a £75 credit for new account set ups in AdWords and a 10% monthly credit until the end of June, if the account is set up and launches PLAs before 12 April. The Merchant can pay in to the account and use it as a credit to pay for the ads that are driving customer traffic to their business website.
Google has uploaded a video to YouTube to help explain the Google Shopping changes, implications, cost to retailers and the growing importance of Mobile in Product Search.

Prices will depend on a few factors:

Cost-per-click (CPC)
The advertiser will pay each time a searcher clicks on their advert. No more than the maximum CPC will be charge by Google each time the advert is clicked.

Cost-per-acquisition (CPA) Percentage.
The advertiser sets a maximum percentage of the final sale value they are willing to pay. Once a customer clicks on a product listing advert, any purchase they make within 30 days of the click that can be directly attributed to the click will be charged a percentage by Google of the final sale value that was set.

Shopping product advert positions are determined by the Advert Rank.
Advert Rank of a product each time a relevant search is entered in to Google.
The Advert Rank is a score based on maximum CPC or the CPA percentage of how much a business is willing to pay Google and the quality score. The quality score is a measure of how relevant the search query is to the most relevant product in your entire Merchant Center product feed.

Product Listing Ads are visually much more appealing to searchers compared to traditional sponsored links on the search results page and businesses have reported that running PLA’s have experienced an above average click through rate.

Much of the Google search position results have to be paid for nowadays yet 46% of searchers click on the website in the first position on first page in the organic search results. It is more important than ever now that product optimisation be factored into an eCommerce website marketing budget. E-commerce is experiencing double digit growth globally and is forecasted to be a $1T industry by 2017 and Google has publicly acknowledged that 40% of their revenue is in the retail / e-commerce vertical.

Now is a good time to really build a strong eCommerce strategy to combat the competition and Google Shopping’s price comparison Internet marketplace and Google Enhanced Campaigns, also launched this week, will help businesses wanting to be relevant on paid search and for searchers to have a consistent online experience across a multiple number of devices when they are buying a product. Two years ago, Rocktime designed a Product Description Optimiser Tool. I think we get plenty more use out of it this year!

There are a number of blogs Rocktime has written over the last few years relating to previous updates to Google Products Feed in 2011,  Global eCommerce Opportunities in November 2012, and an ongoing update on the development in Social Commerce, What is Social Commerce and Social Media meets Commerce. We hope you find these useful!

If these sort of eCommerce search result questions are something you want to know more about and how to determine where your marketing budget can best be spent for a good return on investment then you are welcome to call our Sales Team on 01202 678 777 or email your queries for a chat.  



Author: Fiona Anderson