Why top retailers are investing more in Google Shopping than Text Ads (and you should too)

- Luke Metcalfe

Google Shopping is more popular among shoppers — and marketers — than ever before. In 2016, retailer spending on Google Shopping ads grew 36% compared to 2015. In the US and UK, spend on Google Shopping has already surpassed that of Text ads. And this increase shows no signs of slowing down.

According to Adobe’s Digital Index study of online advertising, retailers spent 47% more on Google’s shopping ads in 2016 than they did a year ago. Even Amazon has started to dip its toes in the PLA waters.

Why the shift in spend to Google Shopping ads? Because marketers at some of the world’s largest retailers see more value in them.

While Text ads probably won’t be disappearing completely anytime soon, Google Shopping is clearly taking e-commerce marketing by storm. Here’s where all that added value comes from, and why you should join the ranks in bumping up your investment in Google Shopping over Text ads.

Enticing to shoppers

First and foremost, Google has made its PLAs enticing for shoppers to click on. Search Engine watch reported that while PLAs accounted for just 37 percent of the 8 billion total paid search impressions generated on those keywords during Q2, half of all clicks were on PLAs.

And that makes sense when you compare the two side by side. If you’re looking for a product, Google Shopping ads give you far more information at a glance than a block of Text ever could.

We live in a world where images and video dominate the media we consume. It’s getting harder and harder to catch the attention of your would-be customers, so having an ad that surfaces all the relevant information quickly, and in one place is key. Shopping online is a very visual experience, and shoppers browsing online rely on images and visual content to bring them closer to products.

From a retailer’s perspective, Google Shopping allows them to present all the most important product information up front, meaning those who do click on the ad are more likely to want the product. Shopping ads show product-focused images and description, as well as price. The result is more qualified traffic that leads to stronger conversions.

On the other hand, text ads — by their definition — don’t include visuals. Product price is also not typically displayed in text ads. This means shoppers can’t select listings based on their price sensitivity, which can lead to costly, unqualified clicks.

Long story short, online shoppers like clicking on Google Shopping ads. In 2016, Google Shopping accounted for 43% of all retailers’ Google search ad clicks and 70 percent of non-brand related search clicks.

Mobile experience

Despite the meteoric rise of mobile shoppers, retailers have struggled to convert that traffic into actual sales. However, when it comes to reaching shoppers on mobile, Google Shopping ads have clear advantages.

For one thing, they absolutely dominate the screen.

Google has created an inviting and easily scrollable carousel with product images, price and brand prominently displayed. Infinitely better than a lot of mobile pages we’ve come across.

Squeezed in at the bottom of your phone screen, with much less visibility and no visual component, Text ads command much less attention on mobile. According to our data, Google Shopping ads on mobile perform 61% better than their Text ad equivalents.

Conversions

If you think about the mindset of someone who would click on a PLA, it shouldn’t come as a surprise that they have a higher conversion rate than Text ads.

To click on a Google Shopping ad, the searcher needs to be interested in the product. Because all the relevant information is presented up front, there is far less risk of shoppers clicking an ad only to find that the product is too expensive or doesn’t look like they thought it would.

The data backs up this theory quite nicely. When we normalize the conversion data to make Text ads on Desktop 100, we see that Google Shopping ads bring in more than double the amount of conversions.

Unsurprisingly, since Google Shopping ad clickers tend to be closer to a buying decision, they tend to convert sooner (and after fewer clicks) than those who click on Text ads. In fact, 80% of Shopping conversions happen in the first five days.

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This is because Google Shopping ads are designed to reach people searching for product-specific terms like brand name, product name, color, etc, making them a much stronger ad format to convert shoppers who have done their research and are closer to purchase. As an added benefit, these long-tail queries in Google Shopping are less competitive, less expensive, and better converting than generic search terms.

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Text ads, on the other hand, are much better at capturing general traffic, because they can be directed to a general listing page for products. The problem is that the space has become quite crowded and getting your ad displayed for ultra generic terms like “heels” is now quite expensive.

Google is making the investment

It seems Google really wants Shopping ads to work. They released a steady stream of updates in 2015 and 2016 that increased visibility and improved the experience of PLAs.

Google Shopping Updates in 2015

  • Available as part of the YouTube ad offering
  • Increased the size of shopping ads on mobile
  • Shopping ads became part of the Google image search

Google Shopping Changes 2016

  • Merchant Feed Center overhaul
  • GTINs now required for all products
  • Constant experimentation with where to put Google Shopping on the results page

In February 2016, Google dropped text ads from the right side of the SERP, dedicating more space to Shopping ads at the top and right side of the page.

The enhancements show no sign of slowing down. So far in 2017, Google have added search filters to the scrollable carousel format, included a bunch more countries, and incorporated an automatic currency converter.

There’s also some evidence that Google is pushing more and more generic queries in the direction of its Shopping ads in an effort to make them more appealing to shoppers at the beginning of their journey. The proportion of generic queries we’ve seen coming through Shopping rose to 21% in 2015 – up from 6% in 2014.

The volume and velocity of Google Shopping updates show that Google is committed to delivering on its promise of putting retailers’ products in front of the right consumers.

And that can only be a good thing for the future of Shopping ads.

An advertising powerhouse

When it comes to digital retail advertising, Google Shopping is becoming the reigning powerhouse. And now is definitely a good time to jump on the bandwagon.

But, if you want to stay competitive, you do need a specific Google Shopping strategy. Google Shopping can’t just be a line on your Paid Search report. It has the potential to be a massive revenue driver – 90% of PPC revenue for some of our clients – but only when it’s handled properly. Google Shopping is a unique medium and it deserves its own unique strategy and tooling.

Not sure what that is? Sign up for our FREE 5 week Google Shopping mastery course and find out!

And if you’re looking to get a read on the performance of your own campaigns, get in touch with us for a free account check to find out how Camato’s machine learning and automation can help your business.

ABOUT THE AUTHOR


Luke is a Content Marketer at Crealytics

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