April 3, 2014, 12:23 PM

Google says all its advertisers must migrate to Shopping Campaigns

The search engine giant has announced it will retire its Product Listing Ads’ campaign format. By late August, all advertisers will need to shift to Shopping Campaigns, which manage both AdWords and Product Listing Ads from one place.

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Just over a year since debuting Product Listing Ads (PLAs), Google Inc. has announced plans to phase out the original PLA ad creation and bidding method in favor of incorporating PLAs into the Shopping Campaigns ad management dashboard. By late August, all Google advertisers will need to shift over to that format, the search tycoon announced yesterday.

“If you haven't experimented with the Shopping Campaign format, now is the time to start,” says Mary Weinstein, content director at paid search marketing firm CPC Strategy. Ultimately, the change will benefit retailers, she adds, because Google has developed Shopping Campaigns to make managing ads on its search engine easier. In addition to giving marketers access to more product information and reporting data about campaign performance, Google has recently updated Shopping campaigns with a bid simulator and the ability to bid on multiple products at once, she says.

Eric Best, CEO of Mercent Corp., which helps retailers to sell on e-marketplaces like Amazon.com Inc. and eBay Inc., writes in a blog post for Internet Retailer, “If built correctly by the advertiser, Google Shopping Campaigns will afford more discoverable views of performance by individual products, brands and categories.”

The news doesn’t come as a surprise to Weinstein or Best. Both say they’ve expected the search giant to make Shopping Campaigns the new standard.

Google first introduced Product Listing Ads, or PLAs, in the summer of 2012. At that time, PLAs, which feature product images and prices from merchants prominently in the central area of a Google search results page, replaced free comparison shopping listings. Google began charging for PLAs in October 2012.

The ads quickly grew in popularity among advertisers, who collectively spent 618% more on PLAs in Q4 2013 than in Q4 2012, following their transformation into a paid format, according to digital marketing technology firm IgnitionOne Inc. During the week of Thanksgiving 2013, PLAs accounted for 13% of all clicks on search ads on Google, and the click-through rate on PLAs was 74% higher than on Google’s pay-per-click text ads, IgnitionOne says.

Shopping Campaigns, introduced in October 2013, build on PLAs by allowing advertisers to manage and bid on ads for many of their products at once by creating custom product groups so they can edit ad programs in bulk. A Google video explains that a retailer could create a campaign just for shirts and, if it sees blue shirts selling particularly well, create a blue shirt subgroup and bid higher on search terms related to blue shirts. Google also provides deeper reporting than it does for standalone PLA campaigns, including by providing industry benchmarks on such metrics as cost-per-click, click-through rates and impressions.

Shopping Campaigns are not to be confused with Google Enhanced Campaigns, which rolled out in February 2014 and apply to AdWords ads. Those campaigns allow retailers to manage in a single AdWords campaign their ads across desktop computers and smartphones, while also factoring in such variables as time of day and location. Retailers using Shopping campaigns can browse the product inventory they’ve already loaded into AdWords and use that data to create groups for PLA advertising.

Retailers should note several differences between Shopping Campaigns and PLAs—which currently overlap, meaning retailers running both types could see interference between them—to make the transition smooth, Weinstein says. First, Shopping Campaigns require a different inventory data feed format from AdWords. “AdWords labels, as they are with current PLAs, are almost limitless and allow advertisers to segment products in any number of ways,” she says. “The custom labels for Shopping campaigns are limited in number (0-4), so which product groups you want to identify with these labels are important.”

For example, a retailer may have previously labeled one product for AdWords with seven custom labels, including "baby blues" and "Spring 2014 collection." But with Shopping Campaigns, it can only add up to four custom labels, so it will have to decide which of its own definition are most necessary to add to the standard set of labels included in the campaign manager—size, color, category and the like.

A retailer must also parse through all its inventory data to create product groups in Shopping Campaigns. Unlike PLA ad groups, Shopping product groups are hierarchical, meaning retailers can designate products into multiple groups and sub-groups as needed. “For this reason, which product groups you initially decide to segment out are very important,” Weinstein says. “Be sure to identify your goals and use performance data to outline what you want your campaign to look like before you start creating ads. How you set up your campaign and inventory information is going to affect your budget, campaign bids and overall goals—so start with a plan of attack.”

Before a retailer kills all its PLA campaigns though, Weinstein suggests looking into exporting that data into Microsoft Corp.’s newly launched Bing Product Ads.

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