San Francisco — For years, Google.com faithfully followed the path of simplicity, even while displaying ads for people, usually they have seen standard text ads with no frills attached. Well, that is going to change now as Google Blogoscoped and Wall Street Journal are reporting that it is soliciting advertisers to participate in an “experiment” that puts information, such as size and price, about products in search results.
The beta test is invite only and signals a new way of advertisers paying for their ads, this time, based on conversions and commissions. Soon, the participants would see pricing info and images of merchandise appearing alongside Google’s search results. This “product ads,” experiment should represent an interesting departure from Google’s usual way of doing things.
According to an email obtained by Philipp Lenssen, “Unlike keyword targeted text ads, product ads will appear in the Sponsored Links section when the user’s query matches information provided in your product feed.” Their pretty pictures and pricing info should appeal to consumers.
The ads will be delivered to a select group of people searching the Web in the United States at first.
A Google spokeswoman said in a statement without giving much details that the “test will only be available to a small number of U.S. users” and emphasized that the company was “constantly experimenting with new features.”
The ads are not charged by the click, but is based on commission set by the advertiser for a conversion, similar to the traditional pay-per-click (PPC) model. Some industry insiders call this “performance based,” suggesting that Google would get paid when someone made a purchase through the ad.
Here is the FAQ emailed and captured by Google Blogosoped:
“You specify the commission rate for conversions that take place via clicks on Google product ads. Minimum pricing is your standard publisher rate, plus the network fee. To maximize your competitiveness among advertisers participating in product ads, we recommend a higher commission with the Google product ads relationship.”
Certainly it is a fascinating move on Googles’ part, which is shrewdly testing out new ad formats as its core search business grows. Google has also been squeezing more ads in more places and on sites like Google Finance, which had once been ad-free.
Mark Simon, VP Industry Relations at Didit, says Google called the experiment a way to create closer relationships with advertisers. The performance model would include affiliate network vendors.
The new ads strategy comes as Google faces fresh competition from Microsoft’s new search engine Bing, especially in the area of online shopping. Bing is chasing online shoppers — and the advertisers trying to reach them — by surfacing more information for product related searches, like images and prices, than Google’s standard search. It also allows advertisers to participate in a program where Microsoft gives some of the revenue it gets from ads to consumers as cash back on their purchases, an incentive for shoppers to spend more with the retailer.
The timeline of the product ads program — together with specifics about commission rates — remains unknown, however, to participate in the service, retailers must submit a feed of their products through an existing service called Google Base, which is Google’s version of a classified listings service.
Hence, the use of Google Base is being encouraged (or sort of made mandatory), but Google’s not concerning itself with clicks that do not result in sales. On the whole, this seems like something that advertisers may really appreciate.