November 12, 2009, 12:00 AM

Google tests putting images into search ads and new pricing

Google’s new Product Listing Ads program is being tested by several online retailers as a new way to get paid search ads featuring product images in Google.com search results. Retailers are charged only when they make a sale, not on each click.

Google’s new Product Listing Ads program is being tested by several online retailers as a new way to get paid search ads featuring product images in Google.com search results. Retailers are charged only when they make a sale, not on each click.

“We’re trying to figure out what type 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.

The Product Listing Ads program charges marketers on a cost-per-acquisition basis, which means that advertisers only pay Google when a shopper makes a purchase as a result of clicking on an ad. The Google spokeswoman did not provide details on what Google charges when a retailer closes a sale through the new program.

Colin Sebastian, a stock analyst who follows Google 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 becoming 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.”

Until now, paid search ads appearing in the results from searches on Google.com were limited to ads based on keywords purchased through Google’s AdWords program, the spokeswoman says.

With Product Listing Ads, Google.com search results also show ads with images based on product information in the Google Merchant Center database, which has replaced Google Base as the product database supporting Google’s search ad programs.

The Product Listing Ads program is separate from Google Product Search, also in a beta test period, which Google is offering at Google.com/products as a search site specifically designed to search for products listed in the new Google Merchant Center database.

The Google Product Listing Ads program is being offered to let advertisers make ads tied to product data in the Google Merchant Center also appear in sponsored ad sections within general search results for queries on Google.com.

For example, a search today on Google.com for “bed in a bag” 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 today are Target.com, No. 20 in the Internet Retailer Top 500 Guide and No. 7 Sears.com. The same page also shows traditional AdWords paid search text ads in the upper left part of the page. The natural search results, meanwhile, include general information about bedding sets unrelated to any particular products for sale.

“This is an interesting move 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 supplant 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 didn`t have value, both for them and for users, they probably wouldn`t be doing it.”

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