STAYING AHEAD OF GOOGLE SHOPPING CHANGES Industry Insights from PLA Experts

The PLA EvolutionSince Google Product Search transitioned to Google Product Listing Ads, a pay-

for-play image-based ad service, we’ve witnessed adoption rates grow as retailers

embrace the profitable advertising model. Now that the average retailer is spending

between 30% and 50% of their search budgets on product listing ads (PLAs),

retailers are looking for ways to optimize the channel to improve performance. In

tune, Google has since introduced Google Shopping Campaigns. This new campaign

format for PLAs will allow retailers to streamline how they manage bidding

strategies and analyze performance insights to find opportunities for growth.

Key Features of Google Shopping CampaignsAd Groups

Prior to the launch of Shopping Campaigns in October 2013, retailers were limited

to a single ad group for an entire campaign. Google quickly realized the importance

that ad groups provide—especially to larger retailers—so they added ad group level

controls for mobile modifiers, negatives, and promotional copy.

Segmentation

Retailers have the ability to segment products into groups directly in AdWords

without having to go to the Google Merchant Center, saving valuable time.

Measurement

Product performance can now be viewed independent of the product group, allowing

retailers to see the performance of exactly which product that was displayed in the PLA.

Competitive Analysis

Competitive metrics such as impression share, benchmark CTR, and benchmark CPC

are now available so retailers can see how they stack up against their competitors.

PLAs Pay OffIn 2013, many retailers saw PLAs

outperform text ads in clicks (3X),

conversion rate (10X), and revenue (5X),

while CPCs increased as competition

intensified.

STAYING AHEAD OF GOOGLE SHOPPING CHANGESIndustry Insights from PLA Experts

0%

250%

500%

750%

1000%

Clicks Rev CVR

Did you know?In the last year, the number of PLAs

displayed doubled, and the number of

advertisers grew by 55%

–Jefferies Equity Research

Once transitioned, Google Shopping Campaigns will simplify PLA management for

retailers, however there are a few critical steps that must be followed for a successful

transition.

Four-Step Process to Google Shopping Success

1. Prepare The Product Feed

As retailers begin the transition process, special attention should be paid to the product

feed. With the new Shopping Campaigns, adwords_labels and adwords_grouping

columns will no longer be supported. Retailers will need to make sure their product

feeds capture these values in other ways. To help, Google is introducing a new column

attribute called custom labels. Your feed can have up to five different custom_label

columns to segment products with info such as high margin, seasonal, best sellers,

etc. It’s important to make sure your product_type hierarchy is accurate and specific.

Adlucent recommends retailers subdivide their product taxonomy using the product_

type attribute down to five different levels (the maximum allowed). These subdivisions

should be chosen and used in way that makes the most sense for how products can

be grouped. Creating groups based on the subdivision of products allow retailers to

organize tight portfolios of similar SKUs for precise bidding and management.

Finally, as retailers review product feeds, remember this is a great opportunity to

implement intent-based feed optimization. Adlucent recommends utilizing consumer

intent data to update changes to titles and descriptions to coincide with how buyers are

searching. This can increase reach and reduce cost by serving the right consumers with

the right products.

2. Plan the Move

Once the product feed has been reviewed and optimized for transition, retailers should

plan out their move to Shopping Campaigns. Taking the time to assess what is working

currently for PLAs versus what is not can greatly help with the new shopping campaigns

structure process. Based on Adlucent’s experience and best practices, a tiered strategy

is recommended. This allows for separate campaigns to be created at the category,

subcategory, product, model, and SKU levels.

Did you know?The growth rate of online sales was

double that of local sales during the

2013 holiday season.

– Google

Top Category: Shoes

Sub-Category: Heels

Color: Black

Gender: Women

Style: Peep-Toe

Group by basic product category

Group products with similar attributes

Group based on best sellers

Group high performing shoes

Group based on popularity

Shoes » Women’s » Heels » Peep-Toe » Black

By breaking up products into categories and then turning those into shopping

campaigns, retailers can avoid getting too granular. From experience, the team at

Adlucent knows that getting extremely granular, without broader groups, can limit

impression share on head terms. For example, retailers shouldn’t simply create all

SKUs as product targets, but instead use subdivisions of categories to bid at the

group level. With Shopping Campaigns, you no longer need ID level targets to get

specific product performance. ID-level data is available for all products with the

new campaign type.

3. Transition Slowly

At this stage, once the right strategy has been aligned with the overall product ads

program and business goals, it is important for retailers to make a timely transition.

In this case, proceed with caution. Adlucent recommends starting the changeover

with smaller campaigns first, so advertisers can get a firm grasp of how the new

Shopping Campaigns will perform for their ads. Utilizing this knowledge in stages

and applying it to larger campaigns moving forward helps apply best practices in

real time that are relevant to specific business goals. Quick moves can also have a

detrimental effect on impressions share, CPCs, conversions, etc. Slow and steady

can set up retailers for long-term success. Adlucent offers a range of migration

services that retailers can leverage to ensure a successful transition.

4. Optimize Campaigns

Now that your Google Shopping Campaigns are up and running—what’s next?

Keep a close eye on traffic. One of the key indicators of whether or not Shopping

Campaigns are successful relies on traffic transitioning appropriately to your new

campaign. Before shutting off old campaigns, make sure your new campaigns are

picking up your most successful queries.

Next, by analyzing the new reporting options, such as impression share, max CPC

and CTR benchmarks, retailers can identify areas of opportunity to increase product

visibility. There’s also a new campaign priority tool available in the new Shopping

Campaigns platform, which can be used when two products are placed in more than

two campaigns. For example, it might be strategic to prioritize a subset of products

based on circumstance—such as a flash sale—and prioritize that campaign as

‘high’ to manage bids more easily during the time the sale is running.

Structuring your PLA Program

Did you know?Search began almost 44% of all US

ecommerce transactions in Q1 2014

– Custora

What’s Next for Shopping Campaigns?

With the change from traditional PLAs to Shopping Campaigns imminent, Google is

relying on feedback from advertisers. Over the next few months, Google will release

more tools and features to help retailers make the transition successfully.

As a trusted partner, Adlucent will continue to work closely with Google to provide

retailers with the best available technology solution and industry best practices to

leverage Google Shopping Campaigns. Adlucent is focused on supporting the most

important activities around managing product ads and will be rolling out features

over the coming months.

Get Even More Sophisticated with PLAs

If you’re interested in taking your PLA program to the next level, it can only be done with

the advanced technology available in the BuyerPath™ platform. Adlucent’s BuyerPath™

solution combines 13 years of retail search marketing best practices with applied

shopping analytics to provide the best solution for product ad programs. By collecting

and analyzing unique consumer focused data insights, BuyerPath™ provides retailers

with the ability to make decisions based on consumer intent, context and preferences all

within a single unified platform.

About AdlucentBased in Austin, Texas, Adlucent

is a performance-based marketing

technology and analytics company

focused on helping retailers deliver

relevant advertising to the right

consumers.

Let’s ChatInterested in learning more about

product ads and the new Google

Shopping Campaigns?

Visit www.adlucent.com or

email us at solutions@adlucent.com