When it comes down to it, your users are the only ones who know what brings value to their lives. When you deliver on that value, sales and customer satisfaction rates soar. Companies often get caught in the trap of outrunning competitors, making products bigger and better without stopping to think about what “better” actually means to their unique audience. In this post, we’re covering how to define and measure user value to help you meet your customers’ wants and needs with a product that actually brings value to their lives.
Define value for your audience
The first step here is to determine what value is for your audience, which requires actually talking to your users about what their goal is when using your product, how they are currently accomplishing that goal, and what problems they face throughout the whole process.
You can’t just survey customers on what is valuable to them. It’s difficult to put that into words. Instead, you have to use specific questions that draw out that customer’s definition of value in relation to the problem your product solves.
To define user value, you have to follow the steps below:
Identify the value proposition
The value proposition is what your product offers to its users. For example, Uber’s value proposition is “The smartest way to get around”. They offer a convenient mode of transportation. Budgeting tool Digit’s value proposition is “Save money, without thinking about it.” The tool optimizes your spending habits and automizes saving for different goals. Each of these value propositions clearly illustrates how the tool benefits its users.
Defining your value proposition starts with identifying the problem statement. Use these five prompts to brainstorm:
I’m trying to…
Which makes me feel…
An example using Uber might be: I am a traveler trying to visit a location but can’t because it is out of walking distance which makes me feel like I need to spend money on renting a car or finding alternate transportation. The value proposition above is the perfect solution to this problem statement. Do this correctly, and yours will be too.
Identify the core action
For every value proposition, there is a core action that must be taken for the customer to experience the value. If the user does not connect their bank accounts to Digit and start spending, the product will be useless to that user. The core action needs to be easy to do within the app if users are going to follow through.
Measuring user value by interviewing customers
The information in steps one and two will then be used to interview users about the product and its value in this step.
First, prompt users to complete the core action. Once they’ve done this, ask them to rate the experience in reference to your value proposition. Keep questioning to identify why that score was given as well as what specifics about the product contributed to their decision. Ask about competing products that also help the user with your value proposition, gathering information on how your experience holds up in comparison.
Listen to your audience
By defining and measuring user value, you gain visibility into what your product should be accomplishing and whether or not it is meeting that goal. Use this data to make adjustments so that your product continuously meets customer expectations.
While the financial cost of the product does play a role here, there are also intangible costs that impact user value. Here are some examples:
Time to purchase
User research might reveal that your core action is not intuitive enough, meaning customers cannot figure out how to use your product after opening it. Or maybe the core action requires more effort than its perceived value. In this case, updates are necessary to clearly define the core action and make it effortless so that customers will know exactly what is required for them to get value out of the product and will take the action necessary to do so. Prioritize the customer experience so that users can get value from your product without friction. The higher the customer costs, the lower the user value. The overall user value is comprised of the benefits minus the costs. So if your value proposition is ranked 10 and your customer costs are 5, your overall user value can only be 5. To increase your user value, you need to think about knocking out some of those customer costs– which brings us right back around to understanding and improving the product’s user value.
At the end of the day, products and services that don’t offer value to the customer are a waste of time for everyone involved. The most successful products are the ones that fill a need and do it well. Speak to a Marin consultant on how our tools can help you identify the right customer for your products or services and the best moment to engage them. Learn more now.
Launching a new product is exciting, but expecting things to go well without any prior preparation would be naive. The vast majority of product launches aren’t successful—not because of the product, but because the business hasn’t thoroughly considered how to showcase the products’ value to the right customers.
There’s a lot to consider when you’re getting ready to release a new product. The list includes determining who you want to sell to, identifying your competition, and deciding how you will set yourself apart.
Why You Need a Product Launch Checklist
Even when teams identify a need for their product, a lack of preparation can result in unforeseen obstacles and delays. For example, Gartner found in 2019 that 45% of product launches get put off by at least one month.
Meanwhile, research published by Marketing Charts revealed the most important factors separating product launch failure and success. Pre-launch testing, authentic messaging, and data monitoring all contributed to better results:
A pre-launch checklist helps you get the branding right for your product, which makes it easier to target the right people and prevents any disconnect between what customers expect and what they get.
9 Steps to Include in Your Product Launch Checklist
Define the Audience
Before you create a product, you must define your target audience. For most products, there is a focused demographic to advertise to—and it will be clear what the main pain points are that you can solve.
Dig deep when defining your audience. Create detailed buyer personas that consider demographics such as age, gender, job role, daily challenges, and why they should purchase your product.
Identify Your Competition
Regardless of the industry and niche you serve, you’re probably not the first company in that particular area. You will have competitors, many of whom have years of experience and established brand names. You must prepare for your product launch accordingly.
Look at the top companies in your field and note what they do well. Identify their weaknesses and think about where you can fill those gaps. Once you’ve fully understood who you’re competing against, you can spell out your USP—unique selling proposition—to let customers know how and why your product is the best choice.
Develop a Marketing Plan
Once you’ve completed the market research phase and you know who your target customers are and why they need your product, you need to start thinking about how you’ll promote your product. Be sure to consider both organic and paid advertising.
When developing a marketing plan, make sure you answer the following questions:
Which channels will you advertise your product on?
How frequently will you market your product?
How will you measure your success?
You should also set SMART goals:
A robust plan will give your team better guidance when putting together the final strategy for your launch.
Clarify Your Branding
Your product needs to appeal to your target audience, so you must get your branding right. Think about aspects of branding such as the colors you use and the messaging style to align with your brand’s target audience.
Your branding will vary depending on how you want others to perceive you. Brighter colors should prevail if you want customers to see you as playful and approachable, for example. But if you want to appear sophisticated, you might opt for more of a minimalistic theme instead.
Develop the Product’s Pages on Your Company Website
If you want your product to sell, dedicating space on your company’s website is non-negotiable. Create engaging copy that communicates what the product can do for the customer and be sure to include product images, details, and specifications.
Build Your Product’s Online Presence
Did you know that 55% of consumers discover new brands on social media? If your product isn’t being mentioned on social media, you risk going unnoticed by the people you want to purchase your products.
When creating an online presence, consider the social channels your target audience will frequent. Hint: they’re probably on the channels where your company already has profiles. Select the top one or two to start talking about the product and its launch. Once you have the ball rolling, you can expand to other networks if you notice a demand.
Social proof is one of the best ways to convince others to buy your product, and gaining trust is crucial. As part of your pre-launch process, you must gather feedback from happy customers. Consider offering product samples to some of your existing customers in return for their feedback.
You can use your testimonials in your ads to show how potential buyers will benefit from investing their faith in you. Similarly, you can add them to packaging as well.
Have Enough Inventory for Your Demand
Many entrepreneurs worry about not selling enough of their product, but the opposite—having ready sales and no inventory—is also a problem. When you launch your product, you must ensure you have enough supply to meet the demand.
If you sell a digital product, like an online course, this won’t be an issue. But for physical items, ensure your inventory exceeds your sales predictions by at least a small margin—and have a handle on the supply chain to know how long subsequent production may take.
Track Your Results
After completing the above steps and beginning your launch campaign, you’ll need to measure progress. Over the following days and weeks, you’ll receive feedback from your customers—and you’ll know whether you’ve met your sales projections. Be agile and ride the momentum forward, adjusting your sales strategy as needed.
How MarinOne Can Help
Launching a successful product requires a lot of preparation, and getting things right from the beginning will make the whole process much easier and much more likely to succeed. The primary focus areas are to create a product that will meet a customer need, build a solid brand, and make sure the target customer knows about it.
Once you’re ready to advertise, thinking about the channels that’ll maximize your profits is equally important. After each campaign, refine your efforts and adapt your strategy based on what you’ve learned.
MarinOne offers several advertising management tools, including automation and analytics that will make your product launches more successful and help you improve sales as you go. Schedule a demo to learn more.
Most digital marketers with retail responsibilities are looking to run Shopping campaigns that consistently outperform their peers. In our Marin Software Retail Guide, we draw on our expertise managing global ad campaigns to unpack what you need to know to succeed with Shopping ads.
Shopping Ads Continue to Boom
Whether you’re starting out or you’re a seasoned pro, you’ll benefit from learning more about the fastest-growing ad type on the web. We cover several key ways to boost your Shopping campaign performance:
Taking control of your product feed
Establishing a campaign structure for seamless workflow
Optimizing performance to deliver business results
Shopping Ads Versus Text Ads
Shopping ads are fundamentally different from text ads, because marketers must maintain dual visibility into both product feed and campaign performance. This speaks to the dependent relationship between feeds and campaigns—a change to one directly impacts the other.
With this complexity in mind, marketers must approach Shopping campaigns holistically to generate positive results. Your product feed is a great place to begin—our guide includes instructions for cleaning up your product feed and making sure it contains all the right elements for winning campaigns. From there, it details how to fine-tune your campaigns, optimization, advanced strategies like mobile and RSLA, and more.
If you’ve stayed up to date with Google Shopping optimization techniques, you may already be doing a stellar job of creating effective and engaging campaigns. But, are you covering all bases to ensure the highest possible yields? Here are three tips and strategies to fine-tune your efforts.
1. Ensure Your Products Include Ratings
One of the most effective ways to make your product listings stand out is to enrich them with product star ratings. This will add to your brand’s credibility and help attract qualified visitors.
In order for your ads to be eligible to show ratings, you must have a minimum of 50 reviews across all of your products and an individual product must have at least three reviews. You can source these ratings from a number of different review aggregator sites. If your products meet these requirements, you must then send an interest form to Google in order to enable ratings.
The fact is, as survey research indicates, customer reviews factor heavily into consumer buying decisions in this increasingly competitive online shopping landscape. Make sure your products are equipped to keep up.
2. Include Unique Product Identifiers
In 2016, Google instituted the requirement that all Merchant Center products that have a manufacturer-assigned GTIN must have them included in their data feed. According to Google, this decision was made because including GTINs helps them to better identify the product, and therefore to better facilitate the delivery of ads for those products in more relevant ways to users.
While this requirement was only put in place for products with GTINs, the logic still applies for including other types of unique product identifiers that aren’t included under that umbrella term such as MPN (Manufacturer Part Number) and Brand. So, if the products you’re selling use any such identifiers, from a performance standpoint it makes sense to include them in your product feed. In fact, as part of their rationale, Google notes that merchants who added GTINs to their feeds saw conversion rates increase up to 20%.
3. Silo Shopping Campaigns Based on Intent
In a previous post about optimizing shopping campaigns, we emphasized the importance of using negative keywords to filter out unqualified traffic. But you can also use negatives, combined with campaign priority settings, to create intent-targeted campaigns with what is sometimes referred to as a negative keyword “waterfall.”
Here’s the idea:
With our standard search campaigns, we can actively bid on keywords to aid in our Shopping campaign targeting and adjust bids according to each keyword’s level of search intent. Not so with actual Shopping campaigns—but there’s a great workaround. We can instead rely on keyword negatives, and take advantage of the Shopping campaign priority setting to funnel search queries to trigger ads from the campaigns of our choosing. In this way, we can effectively set optimal bids on our products based on search intent.
We start by setting up multiple, identical campaigns in which the only differences will end up being their negative keyword inventory, campaign priority settings, and bids. Since there are three campaign priority settings (High, Medium, and Low) we can break out up to three campaigns, each of which will correspond to different levels of intent.
The campaign priority setting works such that whenever you have products across campaigns that can be triggered by the same search query, the product whose campaign has the higher priority will be shown, regardless of their bids. This is where strategically added negatives come in, as this would otherwise result in only the High Priority campaign delivering ads. These negatives will correspond to different levels of intent and, since we’ve designated three levels of campaign priority, we’ll also need to designate three levels of keyword intent to our negatives. Just like we do when we structure our traditional search campaigns, let’s think of these levels of intent in degrees of specificity—we’ll call them generic (e.g. “shoes”), product (“running shoes”), and brand (“Nike shoes”).
The campaigns should end up looking and functioning like this:
The high-priority campaign will be designated, inversely, as the Low Intent campaign. This will contain negative keywords that include both the product and brand levels of specificity. This campaign will therefore only be triggered on generic search queries. Accordingly, we want to set bids low on these products since we expect these search queries to have the lowest conversion rate.
The medium-priority campaign will be designated as the Brand Intent campaign. This one will contain negative keywords that include only the product level of specificity. This campaign will therefore be triggered on branded search queries with product-level queries excluded and because the generic keywords will be captured by Low Intent campaign due to priority. The bid level on these will depend on whether the brand is your own (in which case, keep bids low as you’ll already have an advantage) or not (in which case, bids should be set higher as there will likely be more competition).
The low-priority campaign will be designated, inversely, as the High Intent campaign. This one will contain no “waterfall” negatives (only negatives for filtering out unqualified traffic). This campaign will therefore be triggered on product-level queries only since the and brand and generic queries will be captured by the higher-priority campaigns. The bid level on these should be set higher since they describe a specific product.
More and more advertisers making use of PLAs in their digital marketing programs with increasingly sophisticated technologies like feed management tools and bidding automation. It’s more important than ever to make sure that yours are able to stand up to the competition.
This is a guest post from Dionte Pounds, Account Manager at 3Q Digital.
Product listing ads, or PLAs, are an incredibly successful strategy for e-commerce companies to promote available product inventory on Google and Bing. Unlike standard search ads, PLAs incorporate a visual image over a text description to show the user the product they’re searching for.
There are plenty of reasons why you should be adding a PLA strategy into your advertising mix. Cost-per-click (CPC) will generally be below what you’ll see across search ads. As a result of showing the user an image of the product they’re searching for, click-through-rate will usually be pretty strong. Once the user clicks the ad, they’re taken directly to the product page, making the user journey simple and leading to a higher conversion rate.
Additionally, it’s quite easy to set up and manage campaigns. Both Google and Bing provide product level reporting, so you can also see how each product is doing individually.
With the holiday season in full swing, let’s take a look at some tips to drive great results from your PLA campaigns.
The first and most important step in improving PLA performance is to have the proper product group segmentation. Product group segmentation is vital to drive traffic efficiently. If all of your products are lumped together in a single product group sharing the same bid, you’re not maximizing your PLA campaign potential. In this case, you’re bidding the same amount for your best performing product group as your worst. This will lead to wasted spend and a poor return on ad spend over time.
A well-managed PLA campaign should have a structure that allows for isolation of product groups. Look to each product’s category, type, or brand to figure out what level of segmentation works best. In some cases, it may be best to separate each product entirely.
After viewing your product category report, you’ll have a good idea of what type of product group segmentation will work best for your campaign. In order to optimize the new structure, look at the average CPC for each product group and the ROAS. If the ROAS is below account target, you should start bidding with a CPC below the average. Likewise, if you have a ROAS that’s well above target, you can start that product group with a bid above the CPC to maximize returns.
Try to make use of your conversion rate, ROAS target, acceptable CPA, and average order value to back your way into a starting bid. Let’s imagine the AOV for an account is $50, conversion rate is 1%, and ROAS target is 200%. For this imaginary product group, a $0.25 bid is suitable.
PLA campaigns are very likely to drive more traffic from mobile devices than desktop or tablet devices. Generally speaking, this increase in traffic comes at a price, meaning lower conversion rates and ROAS. Look at how your campaigns are performing across devices, and be sure to use negative mobile modifiers for mobile devices and tablets if it makes sense.
If you’re already bidding down on mobile devices, be sure to take a look at your desktop CPCs when placing starting bids on your new product group structure. It may be possible that the cheap mobile clicks are driving down your average CPCs. If that’s the case, then base your new bids on the desktop CPC to avoid a loss in traffic.
An often-overlooked aspect of PLA campaign management is mining for negatives. Just like a search campaign, PLA campaigns need to be scrubbed regularly for negative terms to prevent wasted spend.
There’s still time this holiday season to maximize your PLA performance across Google and Bing! See if you can utilize some of these tips to drive great results.
With school out and warm weather in, we traditionally think of the summer months as the best time to take a vacation. However, is it actually prime time for search advertisers to ramp up their ad campaigns?
To answer this question and others, we took a look at travel advertisers on Google and Bing. We examined 2014 and 2015 to locate any trends in advertiser spend and performance for the travel vertical across quarters, and to assess the state of consumer behavior. Google and Bing dominate the global search market, which made them ideal for our study—other search publishers have regional presence at best, so they were excluded.
We found a few interesting things:
Summer searches, but fall clicks. Although, on average, consumers searched for travel terms (flights, lodging, auto rentals, etc.) almost 20% more during summer than winter, clicks on travel-related searches didn’t peak in summer as expected. Instead, their highest point was in autumn, right after the summer months.
The great smartphone migration. Over the past two years, travel advertisers have steadily shifted spend away from desktop and tablet towards smartphone. While smartphone made up under 10% of search spend in early 2014, by end of 2015, that number grew to almost 30% of all search budgets.
Native is restless. The travel ad format that’s seen significant growth is native advertising via channels such as Yahoo! Gemini. Starting in late 2014, investment growth in native ads by travel companies grew almost 5x by mid to late 2015. While this format is one of the newer ones, it’s been growing consistently in both advertiser and consumer adoption over the past year.
How do you get your product feed in front of as many eyes as possible? Are you using Facebook Dynamic Product Ads? Just Google Shopping? Do you have an effective social prospecting strategy? Do you know how to get your product ads in front of people who’ve never seen them before?
If your answer to any of these questions is “meh,” then this blog post is for you.
How to Get More People to See Your Product Feed
There are two ways to get your products in front of potential customers on the web today:
Paid placement (cost-per-click)
Marketplace (revenue share)
If you're a retailer, it's in your best interest to blast your product feed far and wide to make sure your product is available whether a potential customer is searching for it on Google or Amazon, or browsing the Yahoo News feed. Heck, maybe they just need a reminder that they didn’t complete their purchase of those cute red pumps.
The obvious next question is—how do I ensure my product is reaching all my potential customers across the many channels and publishers on the web? Full-blown shopping capabilities allow you to get your products in front of millions of customers through all the major paid avenues—and all the leading marketplaces like Amazon and eBay—from a single product feed. This is the easiest way to execute a true “omni-channel shopping campaign.” (Request a demo to find out how we can help you do this.)
Facebook DPA: The Value Proposition
Facebook Dynamic Product Ads (DPA) help you promote relevant products to shoppers browsing your product catalog. Once they’ve visited your website or mobile application, you can retarget them on Facebook with the specific products they showed interest in, dynamically displayed with information from your product feed (price, name, in stock or not, etc.).
There are several great things you can do with DPA:
Upsell or cross-sell campaigns to increase the chances of selling complimentary, relevant products to your customers.
Show your products to people who haven’t seen them.
Reach audiences no matter what channel, publisher, or device they’re on.
Here’s how this works.
Upsell and Cross-sell
Suppose a shopper buys a pair of designer shoes online, and then they see an ad for handbags from the same designer. By showing products related to what a customer orders, you increase your average order value and customer lifetime value. Upsell and cross-sell campaigns automatically extend the reach of your campaigns, and increase the chances of selling relevant incremental products.
With a prospecting campaign, you can offer products from your catalog to new audiences most likely to use your products (by way of a Facebook algorithm or dynamic ads across the web). This feature is meant to give you an optimal workflow—one that allows you to bulk-edit ads and duplicate DPA campaigns for retargeting, upsell, or cross-sell, all in one function.
So, for example, instead of having four separate campaigns and workflows, you can create just one workflow that handles everything you would’ve included in those disparate campaigns.
A small number of Facebook partners (including Marin) can edit product sets, add URL tags, choose creative templates, and see full previews as you make selections. These features have excellent workflow capabilities, so they deliver both fantastic targeting and ease of use. Contact us to learn more.
Having shopping campaigns on both Google and Facebook catapults the power and performance of your product feed. Do you have the time and resources, though, to manage your shopping campaigns on two different platforms?
If you do, you should definitely include your product feed on both channels to extend your reach. If you don’t, Marin’s Smart Sync for Shopping feature automatically clones and syncs your shopping campaigns from Google to Facebook, eliminating the need for lengthy IT support. With Marin Display, you can use your same product feed to run prospecting campaigns to those outside Google and Facebook.
About Those Omni-Channel Campaigns....
Even more powerful than Google Shopping or Facebook DPA alone, omni-channel distribution allows you to advertise across a wide array of channels and publishers—native, search, social, eBay, Amazon shopping...the list of both paid and non-paid platforms goes on.
To wring every last drop of value from your product feed, you should showcase it through as many online venues as you can. You should also make sure you’re constantly optimizing your feed for the greatest possible returns.
A Word on Cross-Channel Advertising
Retailers who combine all of the above functionality with display retargeting can boast of having a full cross-channel solution, one that automatically puts in overtime to expand your reach and boost revenue. Make sure you’re taking advantage of all channels, and heighten your brand effectiveness in time for back-to-school and the Q4 holiday season.
Digital advertising is a fast-evolving organism. For retailers, this means constantly looking for new ways to meet and exceed business goals. Promoting your product catalog across channels is a powerful way to upsell existing customers and for finding new ones. To learn more about how Marin can help, request a demo.
A few months ago, Google veered course from how it’s historically served desktop ads. Right-hand ads were removed, while a fourth ad slot was added above the organic search results. This change aligned mobile and desktop search results, and is regarded as Google’s acknowledgement that mobile search — not desktop — is key to the company’s continued growth and success.
Google’s Initial Response
Last month, Google’s new CEO, Sundar Pichai, penned Google’s annual Founders Letter. His opening two paragraphs reinforce the importance of mobile to Google’s mission:
"When Larry and Sergey founded Google in 1998, there were about 300 million people online. By and large, they were sitting in a chair, logging on to a desktop machine, typing searches on a big keyboard connected to a big, bulky monitor. Today, that number is around 3 billion people, many of them searching for information on tiny devices they carry with them wherever they go.
In many ways, the founding mission of Google back in ’98 — 'to organize the world’s information and make it universally accessible and useful' — is even truer and more important to tackle today, in a world where people look to their devices to help organize their day, get them from one place to another, and keep in touch. The mobile phone really has become the remote control for our daily lives, and we’re communicating, consuming, educating, and entertaining ourselves, on our phones, in ways unimaginable just a few years ago."
For a visual representation of this shift, Andressen Horowitz put together this great chart:
Our Initial Reactions
When news of Google’s ad format change broke in mid-February, we offered our first reactions in a post titled, “Google’s New Ad Layout: Pros, Cons, Ins, Outs.” Our hypothesis used basic economic principles to argue that with tightened supply and constant demand, the average CPC could increase for some advertisers.
Secondly, we predicted that with fewer distractions (e.g., right-hand rail ads), advertisers with a strong product-market fit —typically in positions 1 through 3 —would have an easier time connecting with current and future customers.
What Does the Data Say About Google’s Ad Layout?
Now that some time has passed, we decided to take a look at our dataset — the Marin Global Online Advertising Index — to confirm or reject our early predictions. For this blog post, we compared performance immediately before, and immediately after, the changes went into effect.
The results were interesting. We’ll start by laying out the findings and then provide some closing thoughts.
Positions 1-3 saw little change in competition, as CPCs on these top positions declined marginally for the period. The slight dip in CPCs may be attributable to the increase in consumer propensity to click on these top positions without the distraction of ads on the right rail. This is consistent with our prediction that fewer distractions would yield better brand engagement.
Meanwhile, click-through rates (CTR) for positions 1 and 2 were largely flat, while CTR for 3 and 4 increased by +10% and +13%, respectively. Movements in positions 5 and 6 were particularly noteworthy. Position 5 had significant increases in CTR +10% and CPC +6%, while position 6 had material declines in CTR -20%, yet CPC increased marginally.
An Analysis of Our Predictions
So, how did our predictions stack up?
We were delighted to see economic theory in action (and our hypothesis confirmed) with observed CPCs increasing on tightened supply, and the revised layout of prime real estate favoring established brands.
In this new frontier, positions 4 to 5 appear to be the proving ground for new market entrants. Our secondary hypothesis — that less distraction would increase advertisers’ ability to connect with their (potential) customers — played out by the significantly higher engagement rate on top ad slots.
Other useful takeaways from this analysis pertain to advertisers fighting for position in the lower ad slots. In particular, position 6 appears to be a questionable strategy given the significantly lower engagement rate, while position 4 and position 5 are clearly the most competitive positions for advertisers who don’t have the quality score or brand recognition to lock in the top positions.
The Bottom Line
These results provide a teaser of things to come. As mentioned, we’re looking at two small datasets to give you a quick pulse on the immediate before and after results. Check back for future follow-up posts, as we dig deeper into the Marin Software Online Advertising Index to understand the more nuanced effects of Google’s ad format change on particular industries and geographies.
When homebuyers bemoan the high prices commanded by desirable locations, real estate agents often reply, “location, location, location!” With Google’s recent confirmation that they’ll be serving fewer ads per desktop search result, we expect search marketers to become more acutely aware of "location, location, location."
Less inventory and constant demand could create an uptick in average CPCs for high demand queries (if you’re curious about locking in top ad spots, check out PositionLock).
While this update (and our prediction) may be distressing for some advertisers, we anticipate this change will be net-positive for the industry.
From a user perspective, “less is more.” As we’ve observed with Google mobile ads, which this update emulates, a clean user experience free of distraction creates high click-through rates for top position ads.
Furthermore, if higher CPCs do come to pass, it could stomp out competitors bidding in auctions where they’ve historically had weak product-market fit. With fewer distractions, we expect advertisers will have an easier time connecting with current and future customers. We’ll be keeping a watchful eye on the performance and user experience.
We anticipate this update to be the most meaningful for ecommerce advertisers. Since Product Listing Ads (PLAs) are exempt from the right-rail exclusion, retail advertisers will be the only tenants on this coveted real estate which moves PLAs into Park Place territory.
If you’re an ecommerce advertiser, it’s paramount that your feed be optimized and that your bids are on target (if you need help, check out Marin Shopping). As both users and marketers on Google, we’re excited for this change - we’re happy to speak with any marketers seeking bidding, PLA, or general best practice advice.
December has always been a frenzy of retailer activity, and the biggest month of the year for most, if not all, of them. Many retailers rely on a strong end of the year to buoy profits and plan accordingly for the new year.
We took a look at retail search advertiser behavior last month to see how the dust settled.
There Was Growth, But Less Than 2014
Compared to November and December 2014, this year’s holiday season actually saw less search growth. Ad spend in 2014 grew 27% in December when compared to October, while it only grew 16% in 2015.
However, clicks grew comparably, at 22% vs 19%, respectively, and ad efficiency also went up year-over-year. While CTR was only 6% higher in 2014, it was 18% higher in 2015, largely due to the growing adoption of PLAs and mobile.
Holidays, Mobile, and PLAs
December 2015, in particular, saw large, predictable spikes during the month that coincided with holiday sales. In the week leading up to the 25th, clicks and spend spiked over 250%, peaking during Christmas day itself when compared to the December average. This is very similar to 2014 behavior, and again, there were higher CTRs, largely through mobile and PLA growth in proportion to text ads.
Overall, this holiday season was very successful for retailers, who embraced newer ad formats to great effect.
In the world of digital advertising, 2012 seems like eons ago. But here’s a stat you might remember – widely quoted surveys revealed that between 44% and 57% of users said they never clicked on a Facebook ad. Those numbers made a lot of sense at the time, because I too had never clicked a Facebook ad.
Back then, Custom Audiences were unheard of, Promoted Posts were still in testing, and News Feed ads had just hit the scene. I didn’t have a smartphone, so my only point of access was my college laptop. And since I didn’t go wild liking things and curating my interests, Facebook didn’t have nearly as much data on me.
Sponsored Stories began regularly appearing in News Feed in 2012[/caption]
Lots of Change in a Short Time
Fast forward a couple years, and I was still holding out even as Facebook ads were getting infinitely better. There were captivating images, personalized products (think of those New York Girl in a California World style t-shirts based on lives in/from settings), and videos all over the place.
Then I saw them. A beautiful pair of Warby Parker glasses regretfully abandoned in my cart the previous day, staring at me from the News Feed in the form of a savvy retargeting ad. And I finally clicked.
A sampling of Facebook ads from popular eyewear retailer Warby Parker[/caption]
What’s Changed, Exactly? And Where Do We Go from Here?
A few points come to mind here.
First, Facebook ads have become increasingly effective thanks to:
More and better data
Maturing business goals and objectives (remember all those campaigns just for likes?)
The ubiquitous nature of mobile matched with cross-device capabilities
A host of powerful ad types
For advertisers, this means greater flexibility and lots of opportunity.
Second, in the words of Spiderman’s Uncle Ben, with great power comes great responsibility. When it comes to advertising and the user experience, just because marketers can doesn’t mean we should. Loud or distracting pop-ups, impossible-to-find close buttons, and ads that slow pages to a halt, I’m looking at you. These are the things that drive users crazy and lead to ad blockers.
In fact, the IAB recently stated, “we messed up” following recent concerns about ad blocking, and issued new standard advertising principles to guide the next phase of online advertising. They’re worth a read.
Third, Facebook has largely evaded the trouble of painful user experiences and the resulting uptick in ad blocking. Why? I would argue that the best ads are often native to the user experience and genuinely helpful in nature. Facebook accomplishes this by integrating ads seamlessly into the overall experience, and by providing ad type and targeting options that allow marketers to deliver highly personalized and relevant content.
Fourth, the innovation that powers these high-quality ads has been evolving at a rapid clip, and we can expect it to continue in 2016. We’ve seen reach and frequency buying, a whole suite of Instagram advertising options, carousel ads, dynamic product ads, more ways to incorporate first- and third-party data, and more. These are the kinds of tools marketers can use to create ads that users actually want to click, à la that memorable Warby Parker ad.
Finally, if the goal is to deliver consistently helpful, high-quality, and integrated ad experiences – ones that don’t send users running for their ad blocking software – then we can safely conclude that Facebook is on the leading edge and there will be more exciting developments to come in the new year.
On the heels of Google’s success with Product Listing Ads and Shopping Campaigns, other publishers have developed their own product ad platforms, most notably Bing with its Product Ads and Facebook’s Dynamic Product Ads. These major players have proven that shopping ads are a viable and highly effective marketing investment for digital advertisers.
And, shopping ad campaigns have now been around long enough for us to identify exactly which trends retail advertisers should be most aware of.
1. Holiday Shoppers Love Product Ads
In 2014, advertisers spent a whopping 318% more on product ads in December than they did in January of the same year. Share of clicks closely mirrored this spend, with one in four paid-search clicks being on a product ad in December of 2014.
It’s undeniable that this trend will continue, as spend continues to increase, product ads get more sophisticated, and advertisers continually optimize for the most aesthetically pleasing and persuasive ads.
2. Images and Text are Neck-and-Neck
Again, the holidays are always a boon for digital advertisers in the retail space. During Q4 of the last couple of years, spend on shopping ads pulled ahead of text ads, since retailers served engaging and eye-catching ads during that time. What’s surprising, however, is that this year, text ads have an advantage.
Since mid-year 2014, text ad CTR has actually increased, and overtook shopping ad CTR until the end of the year.
3. Mobile’s on the Move
Not only are we experiencing a mobile revolution – there is a groundswell of mobile ad clicks. Even though desktops had a 25% increase in clicks during November and December of 2014, this pales in comparison to smartphone’s almost 90% increase between January and December. During the holidays, consumers are now shopping and clicking at the same time, on screens uniquely designed to offer ads, deals, and product information to someone on the go.
We recently took a look at the Marin Global Online Advertising Index, which consists of advertising data from leading global brands that manage more than $7 billion in annualized ad spend through Marin’s platform. By examining consumer behaviors from last quarter, we were able to forecast how search advertising would impact the second half of 2015.
We also came up with three ways to dominate search in 2H 2015, one of which you could call, “Spend more on shopping ads.”
Shopping Ads Quickly Reach Critical Mass
Google’s Product Listing Ads (PLAs) hit the market in late 2012, and user adoption has grown steadily ever since. Especially during the critical holiday season, this ad format proved to be richer, more engaging, and highly successful.
For this particular ad type, we looked at retail advertisers and their audiences. We found that:
Retail advertisers spent 47.0% more on shopping ads in 2014 than 2013.
This year will see another increase of 20.1% over last.
Roughly a third of all PLA ad spend concentrated in the last quarter of 2014.
PLA spend in December is forecasted to reach 250% of January PLA spend.
Click behavior during this time mirrors spend behavior, with large surges during Q4 each year.
This year, PLA clicks are forecasted to be 136% of January’s click volume.
All of this data highlights the importance of the holiday season for many retailers. This isn’t so surprising, since PLAs are highly effective at reaching consumers during this season, which starts in November.
Budget Share and Consumer Adoption
In terms of budget share, PLAs have also been steadily gaining ground against text ads in the retail space. While 2013 saw advertisers spike to 23% in PLAs during Q4, overall growth has been slow and steady, taking up just over 20% of all paid-search budgets. This is projected to hit 27% during the holiday season.
Consumer adoption of shopping ads has also shown consistent growth patterns, as the ads have improved and been refined by publishers and advertisers. Shopping ad click share has shown constant growth and made significant gains over the past year and a half. It’s on track to account for over one-fourth of all paid-search clicks by end of year.
Bottom line: Since shopping ad spend is projected to spike dramatically during Q4, retailers should increase shopping ad spend accordingly.
With the huge increase of mobile searches over the last few years, marketers are finding a number of new ways to drive offline conversions through online advertising. Advertisers can now switch tactics from online acquisition to driving consumers to physical stores depending on their location. In this post I’ll outline how advertisers can drive offline retail conversions by targeting searchers on the go.
Use location extensions.
Using location extensions advertisers can dynamically attach their business address to their ads. This will allow users on the go to know how far away they are from one of your stores and provide information on how to get there. This can lead to a significant increase in store visits from searchers who are close by. By using location extensions in conjunction with location bid modifiers advertisers can make sure they are appearing in top positions and displaying information on how searchers can easily find their nearest store.
Location bid modifiers.
By using location bid modifiers retail advertisers can appear in the top search positions when searches are close by to one of their stores. Positive bid modifiers can be setup to target a radius around their stores using location extension addresses. These bid modifiers can be staggered so the closer a searcher is to one of your stores, the higher the bid modifier will be. Advertisers will gain greater exposure and location extensions will be more likely to be shown when an ad is in a higher position.
Local inventory ads.
Local inventory ads have a similar format to product listing ads (PLAs) but show users which products are available at a nearby physical location.
Mobile devices are limited to show either online PLAs or local inventory ads. If an advertiser wants to drive offline retail conversions through online advertising they can show searchers local inventory ads anytime they perform a relevant search near one of their stores.
If advertisers are worried how this will effect online conversions, another option is to use Multichannel Product Listing Ads. These ads give users the option to buy online or view product availability at a nearby location. Advertisers can also include a “Buy Online” link at their local storefront, giving shoppers the option to purchase a product from their website if it’s also available on their site.
The Store Visits metric in AdWords estimates the uplift paid search has on visits to a retailer’s store. This metric is calculated based on aggregated, anonymised data from a sample set of users that have turned on Location History. The store visits metric allows you to estimate the in-store revenue that paid search drives. This can be done with a simple calculation.
Paid Search Store Revenue = Paid Search Clicks X Shop Visit Rate X Shop Conv. Rate X Shop Average Conv. Value
If you want a more complete end-to-end revenue tracking system you can use the ability to track unique IDs from online to offline. One way this tracking is currently being implemented for retail is by connecting the online and offline worlds to Unique IDs. This can be done through a website customer login (online) and a customer loyalty card (offline). If advertisers use a platform that allows revenue integrations, offline transactions can be mapped against their keywords.
Digital advertising can have a significant impact on offline retail conversions. Using the aforementioned tactics, digital advertisers can switch from driving online transactions to driving footfall to their physical stores depending on a searchers location. Advertisers can also implement measurement solutions to quantify and optimise offline performance from their online advertising.
Black Friday and Cyber Monday are quickly looming and retail stores are already beginning to advertise and promote their deals for these annual events. This is also the first year that Shopping campaigns are available for advertisers, although we have an idea of what to expect based off Product Listing Ads (PLAs) last year. We decided to take a look back to how PLAs performed during this time in 2013 to help predict how Shopping campaigns may behave this year.
During the entirety of last year, PLAs saw rapid adoption and proved to be a crucial part of many retailers’ ad strategy. During Thanksgiving, Black Friday, and Cyber Monday, PLA CTRs were 36%, 49%, and 61% higher than text ads, respectively. In addition, PLA CPCs were also lower by 7%, 9%, and 6%. Although PLA CPCs rose to almost meet text ad CPCs, the difference between PLA and text ad CTRs rose dramatically.
In addition, we saw significant PLA activity on mobile devices, greatly outperforming PLA activity on desktop and tablet devices. Mobile PLAs performed, on average, roughly 21% greater than their desktop and tablet equivalents during the November holiday season. Not only that, mobile PLAs are 50% lower than desktop and tablets during Thanksgiving, Black Friday, and Cyber Monday.
With all this in mind, it is without question that Shopping campaigns will be an important part of this holiday season. With Shopping behavior largely mirroring PLA behavior, it makes sense that we’ll see similar trends in a couple weeks once the 2014 Thanksgiving season is over.
Now that you are well-versed in the changes coming with Google Shopping campaigns, you are probably busy preparing to make the upcoming transition. However, given the changes Google has made to the way campaigns are structured, it can be confusing to figure out how to best set things up to suit your business needs.
In an effort to make Shopping campaigns easy to use, Google decided to structure them in a hierarchical format. This means that users can essentially break down their entire inventory into different product groups all under a single over-arching ad group. While this is indeed easier to implement, large advertisers may find this new structure to be more restrictive and struggle with how to best optimize their campaigns to achieve maximum ROI for each campaign segment or product line.
Maintaining all your campaigns in a single ad group will confine them – regardless of their different objectives and outcomes – to a single economical goal, which ultimately prevents bidding flexibility. This is where Marin can make a big difference. Using Marin’s flexible folders, you can easily create and control bidding strategies for ad groups based on their performance and efficiency goals. This is beneficial for many retailers that wish to bid different shopping campaign segments or product lines to different efficiency targets.
Additionally, savvy advertisers should use the mobile bid adjustment setting at the ad group level to optimize their campaigns across devices. Marin’s mobile bid adjustment recommendation (MBAR) tool can facilitate this task at scale on shopping campaigns with multiple ad groups.
The big takeaway? By simply breaking out your Shopping campaigns into multiple ad groups, you will be able to leverage the power of Marin’s bid optimization tools and have better control of your advertising budget, while enjoying all the perks that Google Shopping campaigns has to offer!
Google Shopping campaigns are a great opportunity for retail advertisers to review their current PLA campaigns and optimize them for even better results. However, as many retailers are managing sometimes millions of products across thousands of brands and hundreds of feeds, adapting to and mastering the new Shopping campaigns system can seem like a huge undertaking.
Below we’ve provided seven tips to help you succeed during (and well after) the campaign migration process:
1. Proper feed management is key: Make sure that your product data is complete with all crucial product attributes as Shopping campaigns pull data from the product feed for its product group categories. Advertisers should utilize categories and custom labels to help with feed management. A third-party platform like Marin can help you to create and manage your product feed to ensure that it is set up to meet Google’s requirements and is optimized for the best campaign performance.
2. Map out a plan: Advertisers should use analytics and current PLA campaigns as a guide to what campaign structure will work best for their needs. The necessary number of product group sublevels will be specific to each campaign. The better-organized campaigns are, the more likely they’ll be successful and experience high conversion rates.
3. Baby steps: Prior to August, advertisers should work on increasing their comfort level using Shopping campaigns by gradually migrating over their current PLAs. Again, a third party platform with tools like bulk upload and reporting, will help to simplify the process of creating Shopping campaigns. Additionally, a URL builder can help to automatically update URLs so that performance can be accurately tracked. Then, when it’s time to make the switch, turn off the PLA campaign and switch on the new Shopping campaign. Having Shopping campaigns ready to go before the August deadline will help advertisers be better positioned for the transition and the competition.
Going beyond basic campaign management strategy, advertisers can obtain additional control and visibility over Shopping campaigns by following more advanced tips:
4. Leverage your Shopping campaign data to remarket audiences with intent through Facebook. Advertisers should create Facebook Custom Audiences based on search query data from their digital marketing platform then target the same audiences on Facebook with tailored messages based on their search queries. Using this strategy, an advertiser can reach previous website visitors on Facebook who have intentions to purchase as expressed in their search queries.
5. Track revenue/ROI for campaigns based on the metrics that matter for specific business needs. Solutions that provide integrations with the leading analytics, ad serving, call tracking, and CRM systems enable retailers to create a complete view of paid search ROI.
6. Effective cross-channel optimization requires cross-channel business intelligence. Marketers looking to maximize overall campaign ROI require a single source for measurement, insights, and analytics that aggregate search and social marketing campaigns in one interface. Marketers who analyze search and social campaign ROI holistically are able to make better decisions faster than they would by managing each channel in a silo.
7. Automate with flexibility and control. With the help of automated tools, advertisers can be better positioned to meet their business targets. These tools will also allow advertisers to automate bid strategies based on product-specific revenue targets and build forecast models to anticipate changes in performance.
For more best practices to ensure a seamless transition to Google Shopping campaigns, check out our full-length guide here.
Now that you’ve familiarized yourself with the new changes and functionalities you can expect from Google Shopping campaigns, it’s time to nail down where to start in your transition prior to the August rollout.
The first thing to note is that regardless of how an advertiser’s existing PLA campaigns are set up today, there are several steps that they will need to take to migrate these campaigns over to the new Shopping campaigns in a smooth and seamless manner. Here’s where to start:
1. Inside AdWords, select Shopping under the Campaigns tab on the menu.
2. Following the on-screen instructions, set a default bid and a daily advertising budget.
3. Next, pause the current equivalent PLA campaign to prevent running any duplicate campaigns.
Once Google Shopping campaigns are up and running, advertisers should monitor and analyze performance metrics to ensure that they are getting their desired results. These performance metrics should also be used to determine how to best optimize their campaigns going forward.
While the features of Google Shopping campaigns are aimed at providing advertisers with an improved and more streamlined user experience, you should also be aware of the changes that have been made to some existing functionality with the same objectives in mind. Below is a rundown of what’s changed:
Use of product groups instead of product targets for campaign organization: With the changeover to product groups, advertisers can now subdivide a product group into more specific categories. Shopping campaigns will automatically upload products from an advertiser’s product feed into an “all products” group. For campaigns, advertisers can then subdivide products into product group categories that are predefined by the product attribute data. Campaign performance can now also be viewed by different product attributes.
“AdWords grouping” and “AdWords labels” will be replaced by custom labels: Advertisers currently using the “AdWords grouping” or “AdWords label” attribute in their PLA campaigns will need to create a new custom label or use an existing product attribute to replace the old attribute. In an effort to provide consistency across all products in the Merchant Center, for all new campaigns, advertisers will need to use one of five custom labels when they want to group products by something other than a product attribute. Custom labels, found under the subdivide menu accessible in the product groups tab, will allow advertisers to categorize their products in meaningful ways that were not possible before.
Now that you’re armed with the tools to begin making this transition, be sure to stay tuned for tips on how to get the most out of your Google Shopping campaigns once you’ve gotten started.
In February, Google Shopping campaigns became available to all advertisers globally. Shopping campaigns redefined the way retail advertisers manage and report on Product Listing Ads, offering additional flexibility, visibility, and control marketers truly appreciate. Though advertisers can continue managing standard PLA campaigns successfully, Google announced today that all advertisers must fully transition to Shopping campaigns by late August 2014. After this date, advertisers will no longer be able to manage PLAs through standard Search campaigns, and all remaining PLA campaigns will be automatically upgraded to Shopping campaigns. This transition, similar to enhanced campaigns, represents a challenge and opportunity for retail advertisers.
What Do I Need To Do?
From now until the transition date, advertisers can continue managing and optimizing PLAs through standard Search campaigns. Since the auction landscape for PLAs was not affected by the introduction of Shopping campaigns or the mandatory transition, advertisers can continue running standard campaigns without adversely impacting PLA performance. Keep in mind Shopping campaigns and standard campaigns can run in tandem, ensuring the transition process can be executed successfully over time and according to retailers’ business needs.
How Do I Migrate?
There are five critical steps for transitioning to Google Shopping campaigns:
1. Prepare your feed for transition. Review your product_type, adwords_labels, and adwords_grouping values. Products you plan to target as a group and bid on using product_type should have exactly the same value in the product_type attribute. Keep in mind that product types can only be subdivided five times.
For shopping campaigns, adwords_labels and adwords_grouping attributes aren’t supported. The new custom_label attribute can be used instead; however it’s limited to five labels per product.
2. Plan your transition process. Take time to plan out your transition and consider restructuring your PLA strategy according to best practices and business needs. For advertisers managing a large number of product targets, a phased transition schedule is recommended.
3.Create a Google Shopping campaign. For a single transition, create a Shopping campaign and subdivide product groups based on performance and business needs, then pause the old PLA campaign.
For a phased transition, create a Shopping campaign and systematically subdivide high volume and top performing products; pausing old PLA targets as new objects are created in your new Shopping campaign. If new groups don’t map directly to existing targets, you’ll need to have both PLA campaigns active, setting the new Shopping campaign priority setting to “high.”
4. Subdivide products within your new Shopping campaign. Keep in mind that advertisers get performance data at all levels for all products, regardless of how product groups are organized. However, since product groups can only be subdivided five times, how these groups are organized becomes very important. It’s recommended that advertisers subdivide product groups first by product attributes that support more granular, subsequent subdivisions. For example, product_type > brand > id.
5. Analyze and optimize. As with any transition and migration, be sure to monitor performance and ensure all of your products are receiving consistent coverage and driving similar outcomes. Review and familiarize yourself with the new CPC and CTR benchmark metrics as well as impression share. These will provide insight into the auction landscape and enable you to make smarter decisions when optimizing bids and product groups.
For additional guidance, please review Google’s recommended steps for transitioning to Shopping campaigns and work with your solution provider to establish an appropriate timeline.
What’s Marin’s Timeline for Support?
A beta program for Google Shopping campaigns will become available well in advance of the transition date. General availability for campaign management, streamlined reporting, URL Builder functionality, and integrated bid optimization is scheduled shortly after the conclusion of the beta. For more information on Marin’s Shopping campaigns beta, release schedule, and transition plan, please contact your customer engagement and customer success teams.
Google's Product Listing Ads represent a highly effective channel for online retailers of all sizes, exposing new buyers to your products and driving purchases. Listing products on Google Shopping with rich product information such as price, image, color/size, SKU number and your brand name creates an engaging user experience that is difficult to get on other marketing channels available today.
I've managed PLAs in the past for online retailers and marketplaces and gained a lot of insight from my experience in building campaigns from scratch and analyzing performance data to make decisions. Here are five quick ways to optimize your PLA campaigns to ensure your spend yields positive returns and to get ahead of your competition.
1. Use search query and negative keywords to stop wasting spend. Since Google doesn't allow you to specify keywords to target for PLAs, and because search results appear based on the information you have within your data feed, I recommend using negative keywords to add in some control. Negative keywords essentially tell Google what keywords you do not want products to show up for. This is useful because you don't want to pay for clicks not relevant to your products.
For example, let’s say you’re online book retailer. Even if you’re trying to sell “The Hunger Games” book, Google will show your product ad to people searching for "Hunger games DVD.” Because you don't sell the DVD and because the search isn't relevant to the ad displaying, you will want to add “DVD” as a negative keyword.
To figure out what keywords you may want to exclude, you need to generate a search query report. In AdWords, do this by going to your Keywords tab within your PLA campaign. Then navigate DETAILS> SEARCH TERMS > ALL. This will populate the report you need in order to make your decision.
To kick it up a notch, use performance data with the search query report to evaluate which keywords are truly working or failing. Install the Google Conversion Tracking pixel on your conversion pages to see conversion data tied with the search queries generated from the report. This way, you can see what keywords are performing poorly and optimize for a better experience or pull the ad.
2. Regularly send a high quality data feed. It's very important that you send Google the most updated feed with all fields populated. If you know the frequency of how fast your inventory will move or when price changes occur, it is best to submit in those feed changes immediately. This can vary, depending on whether you’re a small retailer with fixed pricing and few price specials, or a marketplace where pricing is controlled by individual sellers. It's best to schedule the feed when your website and/or products get updated. Keep it fresh!
3. Ensure the product landing page matches up to the description in your data feed. You wouldn't believe how many times I've encountered a bad data feed due to data processing errors, such as incorrect product information scrapped from the database or incorrect prices. It's crucial to ensure that the product to landing page experience is flawless and what the customer expects to see. Even a slight price difference from the ad to the landing page - or worse, an out of stock item - may be a bad enough user experience to make users bounce away.
4. Test new product images. If you're one of the online retailers that uses stock images for your products, then keep in mind that you're not helping yourself stand out from the competition. If you're looking for a boost in CTR and want to drive clicks away from your competitors, consider using your own product images.
For example, let’s say you're an online retailer specializing in outdoor apparel with a product line of North Face jackets. Differentiate yourself by using your own models; humanize the products instead of showing the standard stock image that everyone else uses. If you're a retailer that has hundreds to thousands of products, this may not be feasible so focus on your highest revenue potential products.
5. Identify products with the most clicks. Due to reporting limitations of PLAs, it's difficult to pull a report that lists out products that have generated the most clicks. Given this, it's important to make sure your own web analytics tools are set up to properly track and evaluate performance. Using your web analytics or third party tool, generate a report to get an understanding of which products are generating the most clicks. You will then be able to evaluate the performance, good and bad, and make a decision on how to optimize.
The rule of thumb for this exercise is to identify winners to bid higher. Or identify losers wasting spend to kill or improve. If the product ad performance is not as you expect, be sure to test out that experience to see why people are not converting as expected.
2013 marked the first full year of Google Shopping since the transition to a commercial model built on PLAs. With Google Shopping campaigns slated for release later this quarter, retailers must not only prepare for the upcoming changes to AdWords, but also familiarize themselves with shifting PLA trends in the new shopping landscape. To help advertisers remain competitive and win the battle for revenue online, Marin has released the 2014 annual research brief, examining the current state of Google Shopping. Analyzing year-over-year performance, with a focus on the holiday season and consumer engagement across devices, this reports provides a comprehensive breakdown of PLA performance in 2013 and insight into what retailers should expect in 2014.
Our research started by analyzing the meteoric increase in spend on PLAs throughout 2013, especially during the holiday season. Significant year-over-year increases directly linked to the rise in competition as more advertisers increased invest in PLAs, drove CPCs to historic levels. With advertisers continuing to allocate more budget towards PLAs and away from text ads, the search industry is undergoing a dramatic shift. The seemingly overnight success of PLAs and the emergence of hotel price ads (HPAs) foreshadow a search landscape where advertisers, whether in retail, automotive, or financial services, will have at their disposal richer and more engaging, industry-specific ad formats. These will undoubtedly emerge over the next two years.
The findings in this report not only impact advertisers across industries, but also how advertisers engage their customers across devices. During the holiday season, retailers witnessed shoppers favoring smartphone PLAs over its desktop and tablet counterparts. Not only were they cheaper, but smartphone PLAs also outperformed PLAs delivered on desktop and tablet devices from a CTR perspective. If 2013 was the year of mobile, or more accurately, enhanced campaigns, then 2014 is certainly the second year of mobile. Marin predicts that by December 2014, 40% of all PLA clicks will occur on smartphones. That’s a lot of clicks that retailers will need to provide a mobile optimized shopping experience for.
Leading up to the 2013 holiday season, Google introduced a number of changes to spruce up their Product Listing Ads (PLAs). Expanding the number of PLAs delivered on smartphones and adding new consumer features, like viewing similar items or creating “shortlists," are clear indicators that Google expects their rich and highly engaging feed-based ads to be the format of choice for retail advertisers and shoppers. Over the three biggest online shopping days of the holiday season - Thanksgiving, Black Friday, and Cyber Monday - we sampled the Marin Global Online Advertising Index, analyzing enterprise retailers spending over $100,000 per month on Google’s standard text ads and PLAs.
PLA Spend Continues to Surge
In August of this year, the rapid adoption of PLAs was clear, marked by five consecutive months of increasing click-through rate (CTR) spanning February through July. Consequently, to capitalize on this emerging revenue opportunity, retailers invested heavily in PLAs during the three biggest shopping days with PLA spend increasing a staggering 143% on Thanksgiving year over year. The increase in spend was a result of more consumers shopping and an increase in competition, as retailers became more aggressive across the auction landscape. Unfortunately, shoppers did not increase their engagement with PLAs year over year. A lack of promotional text and the inability for retailers to effectively differentiate through product feeds likely caused this unexpected lull in CTR.
PLAs > Standard Text Ads
For some time now, we’ve been reporting on the superior performance of PLAs to standard text ads. Many retailers agree that PLAs not only perform better from a CTR perspective, but also cost less per click. During Thanksgiving, Black Friday, and Cyber Monday, PLA CTRs were 36%, 39%, and 61% higher than standard text ads, respectively. Moreover, PLA cost-per-click (CPC) was 7%, 9%, and 6% lower than standard text ads, respectively. Though the CPC gap between the two ad formats appeared to close slightly due to seasonality, the CTR gap widened significantly as shoppers continue to find PLAs more relevant and engaging during the holiday season.
The PLA Mobile Movement
By device, PLAs on smartphones outperform those on desktops and tablets. Though the CTR for PLAs on desktops and tablets were nearly identical, tablet CPCs were only slightly higher compared to desktops across all three days. However, the CTR for PLAs on smartphones were 17%, 22%, and 23% higher than their desktop counterparts on Thanksgiving, Black Friday, and Cyber Monday, respectively. Even more significant is the fact that CPCs for PLAs on smartphones were more than 50% lower than desktop CPCs over the three days. (The graphs below are normalized to desktop performance.)
Prepare for 2014
Undoubtedly, PLAs continue to drive better results for retail advertisers. This richer ad format not only outperforms and is less expensive than standard text ads, but it also drives better engagement on smartphone devices where CPCs remain much lower. With Bing preparing to make Product Ads generally available at the start 2014, this level of PLA performance should make any retail advertiser salivate. Those looking to capitalize on these shopping ad opportunities must prepare for the upcoming changes to Google Shopping and invest in technology that scales the deployment, management, and optimization of this highly successful ad format.
The Marin Global Online Advertising Index is comprised of data from hundreds of large-scale advertisers and agencies that collectively invest more than $5 Billion in annualized spend through the Marin platform. The data analyzed by Marin for this snapshot reflects a subset of Marin's direct and agency clients managing active advertising programs in the retail sector from 11/26/13 through 12/02/13. All data is accurate as of 12/2/2013, but subject to change; and represents a year over year analysis of the same holiday time period.
Admittedly, we’re excited about Google PLAs and our recent findings. Yes, PLAs are still relatively new – at least the sponsored-only version – but it’s always intriguing to watch a new ad type take off and we’ve got some of the best seats in the house.
While the rise of PLAs may give cause for some to extrapolate what they mean for Google, its competitors, and advertisers, I thought it would be fun to examine what the success of PLAs could mean for consumers.
We often hear and perhaps even complain ourselves about those “annoying ads.” But what if ads weren’t annoying? What if they truly added to your online experience? Everyone would be happy, with users and advertisers having reached digital marketing nirvana – right? It certainly sounds far-fetched; however, I like to think the success of PLAs hints at progress.
As our data shows, consumers like PLAs. You could even argue they prefer the ad type (certainly more than text ads); something about a relevant image just draws people in. A picture is worth a thousand words or in this case a thousand clicks, but the relevancy is the critical part. An online shopper is looking for a product and up pops an image of what they’re looking for. Problem solved. Thank you, advertisement. Wrong image, though, and it becomes annoying.
The scenario works well in an intent-to-buy situation, but most of us use the Internet for things other than just shopping. Hard to serve a relevant ad if I don’t know what you’re up to. Still, ads can be relevant if advertisers have some inkling of intent.
With search, keywords leave advertisers some trail of bread crumbs to follow. Outside of search, the crumbs become scarce. Even on Facebook where there’s plenty of profile information, the nature or intent of a user’s interaction remains a mystery.
Encroaching on users’ privacy isn’t the answer. So, advertisers are left with honing their audience targeting skills. Ad tech will obviously play a role.
In the meantime, rather than resist the presence of ads, Internet users can look at their penchant for PLAs to see what happens when advertisers get it right.
In June 2013, Google successfully completed their global transition of shopping results to the “pay-to-play" commercial model built on Product Listing Ads (PLA). In the US, this model is still less than a year old, yet online retailers are faced with the real challenges of effectively optimizing their campaigns ahead of the 2013 holiday season. For many search marketers, managing a Merchant Center product feed, testing ad group promotions, and building granular product targets are relatively new concepts. In order to be successful during the holidays and improve their revenue outcomes, marketers must refine their approach to managing and optimizing their PLA campaigns. The following four strategies will enable retail advertisers to deliver a richer and more engaging shopping experience, while maximizing revenue across product targets.
1. Granular Product Targets Product targets, created using the product attributes defined within Google’s Merchant Center, enable retailers to deliver PLAs by product ID or SKU. In general, the more granular the product target, the more likely a relevant ad will be delivered for a corresponding product search. Rather than grouping multiple products together into a single product target, search marketers who map product IDs or SKUs to individual product targets are able to tie the performance of each target directly back to the individual product. Optimizing with this level of visibility and control allows retailers to not only align product targets with product-specific business goals, but also calculate optimal bids that maximize revenue across the entire product inventory.
2. Grouping for Promotional Text Promotional text, which is optionally set at the ad group level, also benefits from granularity and is best leveraged with a tightly themed set of product targets. By organizing product targets that are consistently promoted together into separate ad groups, or the same ad group—such as by brand or product category—retailers can significantly differentiate their PLAs from their competitors. Keep in mind promotional text applies to all the products targeted in a specific ad group. Thus, the messaging should be applicable to all products under each product target and should be updated regularly to reflect changes to promotional offers.
3. Top Performing Products Similar to paid search keywords, prioritizing top performing product targets provides retailers with more control over their revenue outcomes. By increasing exposure for these products, whether through an aggressive bidding strategy, separate ad groups and product targets, or through product feed optimization, search marketers can acquire more revenue while investing less time in management and optimization. For example, increasing product target bids or testing new images for popular products are two common strategies for increasing visibility among shoppers. Additionally, leveraging Dimensions or Labels, along with recurring reports, allow search marketers to quickly take action on top performing product targets when they are impacted by sudden shifts in the auction environment.
4. Poorly Performing Products In contrast, products with low margins or products that perform poorly using standard text ads might also perform poorly with PLAs. By excluding these products from product targets or setting product filters to define which products can appear for PLAs, retailers can avoid bidding on these unprofitable products and exhausting their campaign budgets. Similarly, to limit the product searches for which PLAs will show and further improve relevance and performance, always research and implement appropriate negative keywords.
Final Thoughts PLAs have become an integrated part of the online shopping experience. With this highly engaging ad format expanding to smartphone devices, retailers will undoubtedly allocate additional budget towards these campaigns moving forward. As more advertisers enter the landscape and competition increases, search marketers will need to continue investing in new technology and establish best practices to effectively execute on their PLA strategies. Retailers who have bought into PLAs and have begun optimizing their feed and product targets will not only be able to engage their customers, but will also be positioned to acquire more revenue this holiday season. For more information on how Marin Software can help you successfully manage and optimize your PLA campaigns, contact your Client Services representative or email us at email@example.com.
Product Listing Ads (PLA) provide a richer and more engaging search experience for shoppers. With the share of spend on PLA campaigns increasing 600% in Q4 of 2012, online retailers will undoubtedly continue investing more time and budget towards this ad format in 2013. In fact, in Q4 of 2012, online retailers allocated as much as 30% of their AdWords budget to PLA campaigns. As a result of this recent surge in adoption and spend, Marin Software has published a white paper that examines PLA performance throughout 2012 and presents five best practices for deploying, managing, and optimizing PLA campaigns.
PLA performance versus standard text ads
How to differentiate your PLAs from your competitors
Using PLAs to dominate the SERP
Strategies for setting granular product targets
Download the comprehensive 8 page PLA white paper here.