But losses mount for the home furnishings e-retailer that went public in October.
That’s when free listings for comparison shopping disappear on Google.
The shift to Google Shopping will become complete on Oct. 17. That when the comparison shopping service operated by Google Inc. will start to display only paid ads. What’s about to disappear are the free product listings allowed under the previous regime, which was called Google Product Search.
To list their items for sale on Google Shopping, retailers as of Oct. 17 will have to bid on Product Listing Ads. Merchants buying Product Listing Ads bid on the amount they will pay if their product listings in Google Shopping attract clicks or result in sales—that is, on a cost-per-click or cost-per-acquisition model. Product Listing Ads can include a product’s price, an image and the name of the retailer selling it. That differs from paid search via Google AdWords, mainly text ads that Google places based on retailers’ bids on related keywords or phrases, taking a fee per click.
As with paid search ads, Google will choose which retailers appear in Google Shopping listings based on a combination of relevance to the search term and the retailer’s bid. “We will be ranking these results based on relevance, with bidding as an additional factor,” Sameer Samat, vice president of product management, Google Shopping, writes today in a blog announcing the Oct. 17 deadline. “The ranking of natural search results on Google.com will not change.”
Google did not offer much about how it will determine relevancy, but the quality of the product data feed that retailers provide to Google Shopping likely will play a significant role, some e-commerce experts who help retailers with comparison shopping have said.
While free listings still existed today on Google’s comparison shopping service, the sales from the paid Products Listing Ads as of late last month were running roughly 300% higher than returns from the free ads, says Larry Weeks, vice president of performance marketing for Channel Intelligence Inc., which works with retailers that sell and market via Google. He says that not only is Google Shopping designed to highlight images of products, but also to accurately tell consumers about prices changes and inventory levels. That makes it important for retailers in Google Shopping to send over updated product information, especially as the holiday shopping season draws near, “at least once a day, if not twice a day.”
Much more about the shift to Google Shopping, including why it’s different from paid search and how retailers can succeed in the new Google advertising format, can be found here, an article that appeared in the September issue of Internet Retailer magazine.