Google Product Listing Ads

Following on from Adwords Product Extensions which was released in the UK in September, Google have announced the release of Google Product Listing Ads (currently available only in the US).

Similar to Product Extensions, Product Listing Ads will rely on Google Merchant Centre product feeds. Adwords advertisers with Google merchant accounts will be able to feature product listing ads which contain a title, price and the merchant name in addition to a product image.

Example of Product Listing Ads (extracted from the Inside Adwords Blog)

So, how do Product Listing Ads work?

1) Adwords will measure the relevance of the products with respect to the search query. It will also take into account historical data as well as the quality of the ad and the advertiser’s bid. Adwords will then determine whether to show the product listing ad when a user types in a search query.

2) Unlike text ads, product listing ads are not reliant on keywords. They are triggered when a potential customer’s search matches the item in an advertiser’s Merchant Centre.

3) The new ad format will work on a CPA (cost per acquisition) basis for ‘managed advertisers’, i.e. merchants with larger accounts and ad representatives. This means that businesses will only pay Google when a product is sold as a result of a product listing ad. This can be paid as a fixed amount or a percentage of the sale. Smaller merchants will also be able to use product listing ads, but only on a CPC (cost per click) basis [ZippyCart.com, 2010].

‘How can this benefit me?’ I hear you say. Firstly, Google claim that during their US beta testing, people were twice as likely to click a product listing ad than the conventional text ad in the same position [Inside Adwords, 2010]. With the price and image listed in the ad, product listing ads also inevitably decrease unwanted clicks and can also lead to a potential higher return on investment.

Issues that arise from product listing ads are those of advertisers who are late or choose not to jump on Google’s ever-growing bandwagon. Text ads that would have usually adorned the top right side of our screens will soon be replaced by product listing ads. With the potential of increased CTR (click through rate) of product listing ads, merchants using the new feature could reduce their CPCs whilst those not will see their costs increase.

In conclusion, PPC (pay per click) advertisers should remain vigilant of Google’s expansive advertising avenues and test new advertising streams sooner rather than later. The potential of product listing ads could change the face of adwords advertising, making ecommerce search ads more relevant, drive down costs and increase ROI.

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