The holidays are a hectic time for everyone, especially for retailers trying to maximize their sales performance during this crucial season. This year brings an additional challenge (and opportunity) with the transition from free Google Shopping to paid Product Listing Ads (PLAs). The formerly free Google Shopping channel has become a major paid channel with a unique set of features to be mastered. With all the challenges in this new space there is great opportunity for those who can master the shifting landscape. Here are some best practices to both survive and get ahead in this new marketplace.
Be There! First and foremost – you need to be present. The traffic that was free through Google Shopping is gone, replaced by paid PLAs. So far this paid traffic has proven to be a significant and profitable source of traffic. We are seeing PLAs typically account for more than 10% of total search spend with a significant upside when fully built out and properly managed. The economics to date have also been compelling as shown in the table below. To capture as much of this traffic as possible, make sure you are eligible to serve for any search that is relevant to your catalog.
Early Performance Gains
|Cost per Order||Average Order Value||Return on Investment|
Average Across Advertisers
Be Granular: Full coverage is just the starting point. The more finely you can match each search to a specific ad (and landing page) the more success you will see this holiday season. Precise matching allows you to tailor bids to the economics of each search so the traffic getting served to your site matters most to you.
For example, if you sell Christmas trees, but cannot distinguish between searches for “cheap Christmas trees” and searches for “Christmas trees,” you will find yourself paying more for fewer conversions. If you show an expensive tree to customers looking for a cheap tree, they won’t buy it. On the bidding side, you need to be able to tailor the bid to the expected revenue per click. Assuming “cheap Christmas trees” has a lower revenue per click because of the lower order value then you should set a lower bid for these searches. Splitting the traffic also frees you to bid more aggressively on high Revenue Per Click (RPC) traffic. Not only will you garner more high RPC impressions, they will have a higher Click-Through Rate (CTR) and take rate with targeted ad, image, and copy.
Complexity should not be a barrier to granular targeting. With the right tools and tactics, you can easily scale up your account to mirror your true business. A well-built feed and PLA account can cover your whole catalog at the SKU level. Updating bids and creative matching across a large account is complex, but straightforward if you are using the right tools. For example, Adobe AdLens, the first unified ad management system for cross-channel optimization, uses hierarchical models to manage sparse data across multiple ad units. Lastly, properly implemented negative keywords will ensure traffic is funneled to the right ad and offer.
Be Nimble: The transition from Google Shopping to PLAs is very new and there will be a lot of volatility in the marketplace this season. Google is actively tweaking their ad treatments; varying the number, layout and location of ads on the results page. Many retailers are still figuring out what PLAs are and how they can use them. As they move in and out of the market you can expect to see volatility in Cost Per Clicks (CPCs). In this shifting marketplace you will need to be able to quickly adjust your bids and targeting to make sure you can find pockets of opportunity.
While you can’t control these external factors, you can make sure your PLA campaigns are closely aligned with your inventory and promotional activity. If you have a target that is performing well or receiving increased competition, make sure you have enough inventory on hand before taking action on that target.
Promote: Make sure your PLA promotions line up with any special promotions you have happening. If ‘super toy of 2012′ is in stock and you’re dropping the price by 20% this weekend, make sure your promotion line says that in it!
This is where granular targeting is particularly relevant. Price discounts and other promotions have a huge effect on the economics of a search (higher CTR, higher conversion rate, lower margin). If Google can’t match your bid and offer to the correct search, you will find yourself at a major disadvantage. For example, if you have just one ad unit covering ‘tools-wrenches’ but only one brand of wrenches is on sale, you will be forced to have one bid and one promotional message for both products.
Think holistically: PLAs should fit into your larger marketing efforts. We have seen significant interaction between PLAs and regular paid search. Across Adobe AdLens customers, we have seen more than 15% of purchases that start on Product Listing Ads later convert through regular paid search. Knowing how traffic is flowing across PLAs, paid search, and other channels allows you to attribute conversions correctly and allocate your marketing budget in the best way to maximize ROI.
The transition from Google Shopping to a paid format is a major opportunity for retailers. This channel has already proven to be very profitable in its first few months. With so many retailers starting from scratch this season, the people who best scale the learning curve and manage the complexity and volatility of this marketplace stand to gain a competitive advantage.
Adobe AdLens makes it easy to build out full coverage of your catalog while sophisticated modeling and workflow allow you to match tailored bids and creative to specific audiences of searchers. For more details on how easy it is to implement, tag, and manage PLAs in AdLens, please watch our webinar here. Happy Holidays!
Contributors to this blog post include Adobe’s James Varughese, Shay O’Reilly and the Adobe AdLens Analytics Team