Mountain View, California — Global search leader Google has recently been engaged in experimenting its new “Product Listing Ads” ad format with several online retailers as a new model to get paid search ads featuring product images in Google.com search results, and yesterday, the company announced that they are beginning to expand their product listings ads beta program to more merchants — just in time for the holiday shopping season.
“We are attempting to figure out what kind of information is most useful to searchers on Google.com,” a Google spokeswoman says. At the same time, she adds, the Product Listing Ads program offers retailers a way to advertise their products in the results of searches conducted on Google.com without having to engage in bidding for keywords.
This indicates that online retailers can now launch all of their products in the Google Merchant Center account and only pay a fee when someone purchases something from their shopping cart. Consumers will begin to see these product listings ads more frequently as we move into the peak of the holiday shopping season.
Not only do these advertisements would contain product images and prices, but retailers will be charged only when a shopper clicks on an ad and makes a purchase on the retailer’s website, and not on each click.
This CPA (Cost Per Action) model offers merchants a way to reach a more larger audience on Google.com with none of the listing fees associated with ecommerce marketplaces.
“Everyday we come across many users come to Google.com to research products and find where to buy them,” says Google’s Dan Friedman. “To better serve these users, we have been testing a new feature of AdWords called Product Listing Ads. Product Listing Ads works with an advertiser’s Google Merchant Center account to serve highly targeted ads that include richer product information directly in the ad itself — including product image, price, and merchant name.”
Colin Sebastian, a stock analyst at Lazard Capital Markets, says the new product-focused ads could increase competition among online marketplaces as well as making shopping easier for consumers. “We believe search engines are getting more relevant for consumers shopping online — making it easier to discover, research and purchase products,” he says. “For online sellers, the spotlight on product listings and new cost-per-acquisition pricing could drive increasing traffic flow, help offset premium prices for paid search, and increase competition among existing online marketplaces.”
This latest service release comes at a perfect time when some online retailers are contending and looking to gain any advantage that will help them sell more products during the holiday season.
For example, a search on Google.com for “bed in a bag” in the above image reveals alongside general information about bedding sets several sponsored Product Listing Ads that appear with product images in the upper right section of the screen. Among the retailers whose ads appeared with images next to those search results are Target.com, No. 20 in the Internet Retailer Top 500 Guide and No. 7 Sears.com.
“This is an interesting announcement by Google, especially given that this will likely decrease free Google Product Search traffic since the new product ads are listed at the top of product pages,” says Scot Wingo, CEO of ChannelAdvisor Corp., which helps online retailers sell through e-marketplaces. “Google Product Listings could replace AdWords spend to some degree, but I think because of the testing Google has been doing on this they have a very clear idea of what the impact will be. If their testing indicated that this did not have value, both for them and for users, they probably would not be doing it.”
“Rather than simply attempting to drive ecommerce to a single core site, Google instead will be taking ecommerce and integrating it into already-vital online communities and content sites.”
These ads could pave a way in maximizing engagement in using Google’s Merchant Center. When they are displayed for any given product-related search, they are going to be highly desirable spots for anyone selling those products online.
Presently, this new ad model is just a continuation of Google pushing deeper into the advertising space after their acquisition of Performics which is now known as the Google Affiliate Network. However, in due course, they will be opened up to more merchants, and the number of Google users who will see the ads will be increased.