Shopping ads have been rolling out silently during the month of June in Finland. Frankly, shopping ads is a deal-breaker for most retailers; it’s not a question of whether you should run shopping campaigns as a retailer or not, because you simply have to do it in order to remain competitive and relevant in the search landscape.
On average we see that Shopping Campaigns account for more than 70% of the average retailer’s search engine marketing (SEM) revenue in Sweden (non-brand). This is what you should expect as an advertiser in Finland as well.
What exactly are Google shopping ads? Which industries are they for? Which industries will not be able to use them?
Shopping ads - originally called Product Listing Ads (PLA) - are used to capture and automate advertising specifically for more long tail related searches, but also covers generic search terms. Shopping ads are designed for online, offline, and omnichannel retailers with large and dynamic product assortments.
With the term ‘dynamic product assortment’, we refer to constantly changing prices, assortment, stock values, aging products, margins and other relevant business and product information.
Shopping campaigns can be compared with Dynamic Search Ads (DSA) campaigns in terms of functionality. DSA campaigns are also designed to capture more long tail searches.
What are long tail searches? With long tail searches we refer to brand, category, sub category, product name, SKU and product group related searches. To illustrate the optimal funnel of long tail searches we have used a washing machine as an example:
[Finlux WM 1400-72 A++ washing machine]
[Finlux WM 1400-72 A++]
[Finlux WM 1400-72]
Shopping campaigns do also pick up generic searches such as “washing machine” in the example above. But the volume comes from product related searches.
How are they different from regular text-based SEM ads?
Shopping ads are significantly different from normal text ads in most aspects.
- They look different and contain images, price, star ratings, price falls and other information available.
- You don’t buy and set bids on individual keywords
- On Shopping ads, you place bids on products or groups of products
- You need a product feed to set everything up.
- Your product feed is the holy grail when it comes to Shopping ads. This is where you can make a big difference by optimizing your feed. We will write a separate blog post on feed optimization. Stay tuned.
You also have the possibility to run Smart Shopping campaigns. This is the black box version of Shopping campaigns, which you simply activate and then you hope for positive results. This option is generally not recommended until you’ve evaluated standard Shopping campaigns first and have enough conversion data, at least 50 conversions last 30 days. Smart Shopping campaigns also run on the Google Display Network in the form of Dynamic Remarketing. We always recommend testing this option before deciding on it.
What can we expect from Shopping campaigns in Finland based on our experience in Sweden?
As mentioned previously, in Sweden and other countries that have been eligible for shopping campaigns for some time, we see that shopping campaigns account for more than 70% of the total non-branded SEM revenue.
As a whole, this does not create incremental sales for retailers, but it will shift the channel mix as users do more shopping and shopping comparison in the search engine itself. However, retailers that run shopping campaigns efficiently and master feed optimization will have a big competitive advantage towards competitors.
As an early mover you should also expect discounted CPC:s in the beginning because advertisers are often relatively slow to adopt new features.The early bird catches the worm!
How does this affect your other non-branded campaigns? You should expect a drop-in traffic and revenue on your generic campaigns and especially your DSA campaigns. The simple reason for the decrease in traffic is because there’s a more attractive new ad format taking real estate on the SERP.
Should you run campaigns through Google CSS or third party CSS?
Which Comparison Shopping Service (CSS) should you choose? This is a highly debated topic and you won’t get any support on this topic from Google’s side. But let's put together the pros and cons:
- You get up to -20% CPC discount (with emphasis on “up to”).
- Easy to get started.
- No guarantees on how long the potential discounts will last.
- Shopping ads are created by a less known brand than Google.
- The CSS partner sites can be shady and there’s quite a lot of spill over to these sites which can be harmful for your brand, and potentially generate a lower CR% than Google CSS.
So there are more cons than pros; what do we recommend? Frankly, the CSS you use will not be a deal breaker, but as a rule of thumb if you’re investing more than 5000€/month in Shopping campaigns, you should consider running it through a CSS partner.
We are working with the most established premium CSS partners, so please reach out to us if you would like to pick our brains on this topic.
Dynamic Remarketing as an added bonus
As an added bonus, on the Shopping campaign launch you will be able to leverage the Dynamic Remarketing Features on the Google Display Network (GDN). Dynamic Remarketing on GDN is not a new feature but now it’s much more convenient to set up thanks to the Google Merchant Center integration. As a general benchmark you can expect dynamic remarketing to account for 2-6% of your total revenue, so unless you are running it already, you should consider leveraging this opportunity.
What remains unknown is how the users adapt to the new ad format. Will they understand and convert on the new ads as users do in other countries? This will be revealed once we have more data available.