But the social network’s advertising revenue grew 18.4% during the quarter.
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But how should retailers start bidding on Google Shopping as the service rolls out? Samat and e-commerce service providers recommend that retailers start off broadly—that is, bid according to product categories and even brands. That could mean a single bid across all products, or breaking products into categories and bidding on each category with the same bid, Samat says.
After placing those bids, retailers then should let the ads run for one or two weeks, and measure the returns. Then comes more refinement, and the lather-rinse-repeat cycle of figuring out what works best as the ads become ever more precise. "The merchant can then optimize from there at a more granular level, for example breaking up 'shoes' into different subcategories or bidding higher on specific brands of electronics in their inventory," Samat says.
As Google Shopping gains steam, even retailers not taking part in the comparison shopping program likely will feel its effects, some experts say. That's because if Google's vision succeeds and more online shoppers rely on the service, those merchants not taking part will have to find ways to compete with Google's souped-up sales engine.
"Online retailers that lack the expertise or pocketbook to use Google Shopping profitably will need to double their efforts to improve their businesses through SEO, social marketing and the more defined, fee-driven marketplaces with predictable margins," says Effle, from Vendio. "Weaker merchants may not survive this transition, but those who do will gain market share."
How to succeed with Google Shopping
- Treat it as comparison shopping, not search marketing: Google Shopping enables consumers to shop via price, brand, size and other attributes; that's different from AdWords paid search ads that focus on keywords.
- Start broadly at first: Google urges merchants to craft bids for Product Listing Ads initially at the category level, see what works, then tailor bids to specific products or attributes.
- Decide on CPC vs. CPA: Google says that cost-per-click bidding would work best for retailers focused on traffic, while cost-per-acquisition would serve merchants more interested in sales. Place minimum bids on all inventory: Google says that placing even very low bids on products submitted via its Merchant Center ensures that interested shoppers have access to those items.
Source: Google Inc., e-commerce analysts
Google Shopping versus AdWords
- Purpose: Google Shopping enables consumers to comparison shop. AdWords puts paid search ads before online consumers.
- Focus: Google Shopping is all about products; AdWords revolves around keywords. Advertisers need not provide keywords for Product Listing Ads on Google Shopping, as Google determines relevant keywords from product feeds.
- Complexity: Managing Google Shopping, with Product Listing Ad bids centered around product features, promises to be more complex than crafting an AdWords campaign.
- Ad format: Google describes Product Listing Ads as "AdWords ads that include rich product information, such as product image, price and merchant name."
Source: Google, ChannelAdvisor, other e-commerce experts