5 Keys to Profitable Growth with Google Shopping

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1. The evolution of Google?In 2009, nearly a quarter of shoppers started research for an online purchase on a search engine like Google and 18 percent started on Amazon, according to a Forrester Research study. By last year, almost a third started on Amazon and just 13 percent on a search engine. Product searches on Amazon have grown 73 percent over the last year while searches on Google Shopping have been flat, according to comScore.Product searches on Amazon have grown 73% over the last year while at Google they have been flat. Why is Google doing this? Compete with Amazon? Google earnings?Amazon is adding paid search adsAmazon’s community, Google+Same day shipping means more people will go online to search for specific productsImagery – where are people starting?Goals for Google:Be the go-to destination for online shoppersProvide a quality shopping experience
2. >>In order to compete with Amazon and other search providers, Google has transitioned Product Search to Google Shopping, a product listing >>It’s no longer enough to make your catalog accessible; Retailers must understand & promote the products most likely to convert.Paid Search metrics like CTR and Quality Score now matter
3. If you’re a current GPS user: Preserve revenue and market shareIf you’re new to GPS: Acquire market share and preserve marginsCPCs are 15-25% lower20-30% more YoY traffic driving to paid ads than when it was freeWe expect CPCs to be 15-20% higher than PPC
4. Transition to Auburn
5. Many of you are working with a feed management company, but this is really about more than maintaining a clean feed. Adlucent is able to do this, and our best practices go way beyond that.PLAs can be complicated to setup and require some technology sophistication on the part of the retailer.Besides setting up feeds and keeping the feeds updated in real-time, retailers must understand how to use consumer demand signals to optimize their feeds and bids. Most retailers will submit feeds and let Google do the optimization. These retailers are missing out on an opportunity to reach the right audience to get the highest return on ad spend. The smartest retailers will continuously optimize their product feed and unique product data, pro-actively manage their bids, and also leverage search query data to determine on-going refinements to investment.
6. >>You need to have the ability to react and refine your feed as you learn from it. >>Your product feed is not static.Many of you are working with a feed management company, but this is really about more than maintaining a clean feed. Our best practices go way beyond that.PLAs can be complicated to setup and require some technology sophistication on the part of the retailer.Besides setting up feeds and keeping the feeds updated in real-time, retailers must understand how to use consumer demand signals to optimize their feeds and bids. Most retailers will submit feeds and let Google do the optimization. These retailers are missing out on an opportunity to reach the right audience to get the highest return on ad spend. The smartest retailers will continuously optimize their product feed and unique product data, pro-actively manage their bids, and also leverage search query data to determine on-going refinements to investment.
7. >>Compare product-level data from both paid search and PLAs to allow faster optimization and better testing, resulting in lower costs, better revenue, and an improved customer experience. Compare hundreds of PLA and PPC performance metrics side-by-side at the product level, subcategory level, or category level>>Related product segments yield valuable insights about expected performance>>Accessing aggregated performance data enables faster responses to changing conditions – and can even anticipate future results>>Aggregate Product Targeting>>Groups of related SKU’s“Let’s look at a how BabyEarth was able to improve their PLA programs through microsegmentation. Steve Steinberg is the Chief Marketing Officer for BabyEarth. Steve, thanks for joining us today…”This is the theory behind how we do predicitve mid management. Create micro-segments that together create enough info to make a decision on.Rather than waiting a long time and missing the opportunity we look to related micro segments to understand what market forces were affecting velocity.
8. >>Broad match terms (maximize reach), but you can also target granularly at the SKU level
9. Auburn: Steve, I’m sure some of our listeners have visited the BabyEarth website before, but for those who haven’t, tell us a little about BabyEarth.Steve: <Answer>Auburn: What are your biggest challenges as an online retailer?Steve: <Answer>Auburn: That’s great. So you started your search program in August of 2011. How was your performance and what were your reasons for seeking out a search partner?Steve: <Answer>Auburn: And what stood out about Adlucent? Steve: <Answer>
10. Auburn to share the BabyEarth story. Adlucent utilized micro-segmentation reporting to identify predictably strong performing products based on results for related SKUs in PLAs and text ads. They also analyzed search queries to determine whether the highest quality matches were being made with products. Those queries closely aligned with customer intent could be optimized and more aggressively promoted, and those not well aligned could be directed elsewhere or negated in an effort to shift resources to product targets with a higher likelihood of converting. Adlucent worked with BabyEarth to quickly expand the number of PLA targets from under 100 to over 10,000 in order to better promote the full product catalog.
11. Auburn to share this story. This growth has also increased the value of the overall paid search program. Additionally, at BabyEarth’s request, Adlucent has incorporated margin goals into their overall PLA management strategy. This strategy–aggressively promoting products that drive the most value to BabyEarth while actively managing low-margin products–has led to sustainable growth for BabyEarth’s paid search program. Auburn: So do you find that your PLA program is helping your PPC program?Steve: <Answer>Auburn: So Steve, what’s next for BabyEarth?Steve: <Answer>Auburn: What’s the biggest piece of advice you can give to an online retailer who is looking to get started–or even expand–their PLA program?Steve: <Answer>
12. Auburn to share the Adorama story. This story was recently shared in Google’s earnings call.Adorama is one of the nationʼs largest photo retail and mail order suppliers. For over 35 years they have been serving professionals as well as amateurs in the photographic, video, digital imaging and telescope fields. The multi-channel retailer has been voted to Forbes.com "Best of the Web". Adorama began investing substantially in pay per click advertising in 2003 and added Product Listing Ads (PLAs) to their paid search program in mid-2011.
13. Using their Precision Product Targeting approach to PLA management, coupled with Adoramaʼs text ad performance analytics, Adlucent was able to confidently and quickly launch the Adorama program with targets for every product in Adoramaʼs catalog and bids tied directly to proven customer intent. Doing so has allowed Adorama to clearly identify performing products, adjust bids at the product level, and optimize ad text (i.e. product title and description) for top performers.
14. Adorama has seen the performance and efficiency in their PLA program needed to continue investing in the media type. For the month of June 2012, Adorama saw a year-over-year average click-through rate (CTR) increase of 176% and average conversion rate (CVR) increase of 100%, while costs per click (CPC) were held to a 73% increase. Similar year-over-year increases were also seen in July 2012.This is a trend that Adorama has seen since they launched their program in June 2011. The month-over-month trend for PLA conversion rates has slightly out-paced costs (7.2% vs. 7.1%), while CTR has increased an average of 10% per month.In terms of order revenue (using last click to purchase), Adorama saw PLA revenue contribution spike dramatically in Q2; 63% over Q1. Additionally, using Adlucentʼs click funnel analysis by channel, Adorama found that PLA clicks impacted almost half of their non-brand revenue in July 2012.
15. >>This best practice is taking a play out of our 10 year history of managing text ads and applying it to PLA management. Target each product individuallySearch Query Mining>>Negate ineffectual terms and reduce wasted ad spend>>Leverage successful terms to optimize product info and text to match the customerIntent
16. The goal is to capture all desirable queries. Ensure that your product data is optimized. Test variations of ad text and landing pages.Google is allowing promotions in your feed
17. Auburn, Steve, thanks for sharing these best practices. We just discussed the success that the retailers are seeing, and…Google will give PLAs more real estate. Google will be the place where you can begin and end your shopping experience. Google is allowing promotions in feeds