Google changes paid search game with new ad format

by James Duthie on November 18, 2010

Google sure knows how to shake up the search industry! Just weeks after rocking the SEO industry with the localisation of organic search results, Google served the paid search industry a similar dose of instant evolution by releasing Product Listing Ads out of beta phase.

For the uninitiated, this video provides an overview of exactly how Google’s new Product Listing Ads work:

As someone who helps manage paid search for an online retailer with 10,000+ products, Google’s new Product Listing Ads are incredibly exciting. However, it’s also important to note that Product Listing Ads are likely to have considerable implications on the search landscape. I’ve identified five key implications for search marketers below:

1. Paid search ads become more visible

Google itself boasts that Product Listing Ads are twice as likely to attract a click than a standard text ad in the same position. Which makes perfect sense when you consider that Product Listing Ads integrate product imagery. Images attract attention.
My hunch is that the new ad format will cannibalise clicks from organic search.

Retail sectors in particular will see strong adoption, and product imagery will draw searchers away from organic listings (where multimedia is less prevalent). Users will be drawn to the paid listings when product imagery matches their search query. A moderate shift towards paid search results is likely, which you’d have to think is Google’s intent.

2. Google becomes a price comparison engine

By integrating price directly into Product Listing Ads, Google has immediately transformed itself into the world’s largest price comparison engine. Which is a HUGE deal for online retailers (and a pretty significant problem for existing price comparison engines). Make no mistake – the integration of price points will influence user behaviour in a significant way.

Brand awareness and brand equity will retain slightly less importance as price competitiveness becomes a primary motivation in earning the click. If an online retailer isn’t price competitive, they’ll be eliminated from the consideration set before the consumer even reaches their site. Quite simply, retailers with over-inflated prices will be exposed.

3. Product descriptions matter!

Many online retailers treat product descriptions with disdain. Indeed, most tend to copy and paste descriptions provided by their suppliers, which results in duplication of product description content across competing retailers. While this isn’t ideal from an SEO perspective, it doesn’t do any great harm either. However, the importance of product description content increases significantly with Product Listing Ads.

Unlike standard text ads, advertisers don’t create the text displayed to the searcher for each ad. Instead, ad content is pulled directly from product descriptions uploaded to Google Merchant Center. Use the standard description content provided by your supplier, and you’re likely to see bland text that mirrors your competitor’s ads. While the task is laborious, there is now a real incentive to write customised and persuasive product descriptions.

4. Reconsideration of culled keywords

Culling non-performing keywords is common practice in the optimisation of a paid search campaign. However, the change in landscape warrants reconsideration of products and keywords that have been culled due to poor performance.
In particular, the integration of pricing information will change user behaviour. Insights gained through the history of the campaign need to be re-evaluated with new elements influencing click behaviour. The game has changed. Failing to re-test products that have performed poorly in the past may simply make them more profitable for your competitors.

5. Online retailers set to prevail

If you don’t sell products online, Google’s Product Listing Ads will be unavailable to you. Which gives online retailers a significant advantage over businesses without ecommerce capabilities. If Product Listing Ads are truly twice as likely to be clicked, competitors maintaining standard text ads will find it increasingly difficult to attract clicks.

All of which places businesses without an online retailing capability at a distinct disadvantage in the paid search environment. Retailers without ecommerce capabilities may quickly find themselves turning to SEO for redemption.

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