Are your Local Inventory Ads working against your Shopping campaigns

How to set up a Google Local Inventory Ads campaigns the smart way

 56% of all in-store sales in the US are influenced by digital media

– Deloitte study (2016)

Online shopping is certainly growing in popularity, but don’t count out in-store shopping just yet. Nothing beats the instant gratification of picking up your new product IRL.

So, how do you effectively market to these shoppers who might research your product online, but buy in store? Enter: Google Local Inventory Ads (LIAs).

Since their beta launch in 2014, Google Local Inventory Ads have gained a lot of popularity with omnichannel retailers. We regularly see our customers spending as much as 23% of their Shopping budget on LIAs.

Local Inventory Ads are designed to allow us digital marketers to help sell products in brick-and-mortar stores. After all, a sale is a sale. And, if you’re a retailer who sells both online and in-store, this may sound like the perfect fit.

In this article, we’ll share our best practices for configuring Local Inventory Ads and demonstrate how they can co-exist peacefully with your online campaigns.

What are Local Inventory Ads?

Ever wondered whether a product is in stock at your local store? If you knew it was, you might just want to go and get it instead of ordering it online and waiting for it to be delivered.

That’s basically the premise of the problem Google LIAs are trying to tackle.

Local Inventory Ads are Google Shopping ads targeted towards driving people into your physical store instead of making an online sale. So, instead of clicking on an ad and being taken to an online store, when a shopper clicks on an LIA they are directed to a “Local storefront”, where they can check product availability at a store near them.

They look something like this…

local inventory ad.PNG

In addition to thriving online shops, many of our camato customers also run healthy offline stores. More and more, we’ve seen their performance marketing departments wanting to use Local Inventory Ads in addition to their normal Shopping campaigns.

If you’d like to see a short recap on the Local Inventory Ads basics – and what is required to set these up, there is a great compact video tutorial by Google.

Bidding for Local Inventory Ads

With online Shopping campaigns, it’s easy to measure their effectiveness. You can track a shopper from first click to conversion and beyond, making it simple to calculate your Return On Ad Spend (ROAS) and budget efficiency.

Recommended Reading: How calculating Customer Lifetime Value will help you optimize your ROI 

The value for Local Inventory Ads, on the other hand, is harder to measure. One option is to use Google Store Visits, a feature that allows retailers with monthly Shopping click volumes over 100k know how many people have actually entered their store. The problem with this method is that you can’t track whether the person visiting the store actually bought something.

Google Shopping also allows you to opt-in LIA support into your normal online Shopping campaigns. However, doing it this way can confuse your Bid Management system if you’re optimizing your campaigns for ROAS. Local Inventory Ads drive costs, but don’t convert online. And if they do, it’s typically with a worse ROAS.

Separate Local Inventory Ads from Online Shopping

So, what does a sound dual Shopping campaign setup look like?

In our experience, in order to make Local Inventory Ads work for you, it’s best to run them independently them from your classic online campaigns. By using LIAs in separate campaigns you can use a separate budget and different bidding strategies – typically Cost per Store Visit or maximize clicks for a given budget. This also allows you to push store visits for certain product types more heavily.

Apart from being able to differentiate between the performance figures of each campaign type at first glance, separating your Local Inventory Ads from your online Shopping ones allows digital marketing departments to easily manage budgets and different optimization strategies.

Recommended Reading: Squeeze every last drop of performance from your Google Shopping campaigns

Most of our customers who use LIAs, either reallocate budget from the offline marketing department or unlock additional PPC budgets specifically to promote offline activity.

Understanding Local Inventory Ad formats

In addition to normal Online Product Listing Ads (PLA), Local Inventory Ads bring two additional ad formats into the mix: Multichannel Product Listing Ads and Local Inventory Ads.
local inventory ad 2.PNG

Let’s make everything little easier. When a shopper is not physically near to one of your stores, only Online PLAs will be served by Google. Check. Local Inventory Ads can only be served for products if a shopper is near to your store and the product is available. Check.

A Multichannel PLA is more of a hybrid ad format. If a product you sell is available both online and in-store, and the shopper’s Desktop is near to a store, he can decide whether he wants to go to the online shop or check the availability in his local store.
local inventory ad 3.PNG

Creating a dual Online Marketing strategy the works

There’s no reason that both Online and Local Inventory Ads can’t work together in your digital marketing strategy. You just need to know which ad format to use in which situation for the best results.

Here is a quick visual breakdown of how to tie Online and LIAs together and which budgets they should come from:

LIA - when to use which ad format

It’s pretty clear that the best use of Local Inventory Ads is on mobile. Multichannel PLAs should be treated like traditional Online Ads because the shopper will most likely click through to the online shop. In fact, our data has shown that this will be the case 99% of the time.

Recommended Reading: How to get more conversions from Mobile Landing pages

Setting up your campaigns

Now that you know when to show each add type and which budget to pull from, let’s actually set up a campaign.

These are the decisive settings you need to make in order to run separate campaigns.

For the Online campaign(s), you have to filter for “Chanel is online” and “Enable local inventory ads”. Google is smart enough to determine whether a normal Online PLA also qualifies as a Multichannel PLA when the shown product is also available in a store near the shopper.

For the Local campaigns, you select the Inventory Filter to be Channel is ‘Local’. With Locations, you target especially mobile shoppers near to a store (that you defined via Google My Business).

You can also run an independent bid strategy for your Local campaign. As the goal is not ROAS for these campaigns, ‘Maximize clicks’ is a good place to start – together with a separate Budget. If you have opted into ‘Google Store visits’, you can see how many Store visit conversions you can get out of a Local campaign. That makes a good benchmark to see if bidding for a Cost per Store Visit or a Store Visit ROAS – assuming a conversion rate and conversion value per store visit – makes a difference.

We typically set the Desktop bid modifier to be 100% in Local campaigns because searches qualifying to show the user local availability are already covered by the Multichannel PLAs in your Online campaigns.

LIAs – incremental traffic or ‘cannibalization’?

In the next blog posts, we will look deeper into some data-driven insights: do LIAs bring better conversion rates in terms of Store Visits than normal Shopping online ads? How much is the overlap between online PLAs and LIA search queries – in other words: do you cannibalize your online PLA traffic – or will LIA clicks bring incremental clicks at a cheaper price?

What are your experiences and best practices so far? We’d love to know about it

ABOUT THE AUTHOR


Alexander Paluch

Alexander has several years of experience as an IT consultant and Product Owner in the e-commerce industry. Today he works as a Senior Product Manager for crealytics.

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