The Importance Of Inventory Feeds In Paid And Organic Search

A friend recently defined the purpose of search engines as "demand fulfillment," and that sentiment definitely holds true in the case of product searches. Search is a powerful tool for consumers to research products before purchase, allowing comparison of everything from price to reviews.

Yet many online retailers and most local retailers haven't incorporated all inventory into the search engines. Ironically, the process isn't terribly difficult and can provide much greater visibility. And as new applications take hold, such as geolocation-based applications (like Google+, Facebook and FourSquare), and mobile devices become even more standard, search engine inventory integration needs to be an even greater priority for all retailers.

A recent study from Chadwick Martin Bailey indicated that over half of smartphone owners use their phones during the offline purchasing process, with 66% using their phones to compare prices. Additionally, the study reported that 44% of smartphone owners are using barcode scanning apps to immediately compare prices or read reviews.  So it's vitally important for both online and local retailers to ensure they have visibility in comparison shopping via search engines. Integrating inventory feeds in both organic and paid search can improve overall visibility to potential buyers.



Integrating Inventory Feeds and Organic Search

Integrating inventory feeds into Google organic search is fairly straightforward. First you need to log in to Google Merchant Center using your Google ID. Then you can set up your feed (or multiple feeds) within the Merchant Center. However, there are very strict guidelines your feed must follow, so it may require some reformatting prior to uploading it to Google. Once your feed is uploaded properly, your products will begin showing in Google Shopping Search.

Integrating Inventory Feeds and Paid Search

At the simplest level, advertisers can link their organic search inventory feeds from Google Merchant Center to their Google AdWords accounts. This creates a plethora of new ad display options, including text ads with product extensions and product listing ads. Alex Cohen did a nice job covering these options in a post last month.

At a more advanced level, integrating inventory feeds into paid search can be a bit more hairy, but it's definitely worth it. An online bookseller that I work with is currently recognizing upwards of 150%-300% return on investment from Google AdWords through their inventory feeds.

How is that possible? Think of product SKUs as extremely long-tail keywords. Currently, very few retailers harness the power of inventory feeds in paid search, so the bidding war is limited, keeping the cost per click low. However, searchers looking for a particular SKU are also (as with long-tail keywords) very far along in the buying cycle -- they are ready to purchase.

Using the Google AdWords API (and the Bing API as well), advertisers can create ads based on a variety of fields available in the feed itself. For instance, in the case of the online bookseller, ads include the price of the book, shipping price, and ISBN. One of the benefits of this highly granular approach is that by putting the price of each book directly in the ad, the bookseller can prevent clicks from likely non-buyers who feel the price is too high, helping to mostly target searchers who will convert.

Finally, for advertisers with a large catalog of SKUs, like the bookseller with nearly 100,000 SKUs, API integration with Google and Bing allows them to have fast visibility on the entire catalog of products with very little manual entry for ad copy, campaign creation, etc. In the end, this provides the most visibility in the most efficient manner for the best ROI.

New Tools Coming for Brick and Mortar

Inventory feeds for search aren't important just for online retailers either; traditional brick and mortar retailers also need to embrace using inventory feeds in the search engines. The Google Retail Advertising Blog posted data from an Ipsos study last week, reporting that while 93% of sales occur offline, 80% of consumers research a product online before purchasing in-store. In the aforementioned Chadwick Martin Bailey study, while many smartphone owners use their phones during an offline shopping trip, only 17% are looking to shift to purchase the item online. This demonstrates how smartphone users are using their phones for pricing research (66%), but likely still want to purchase locally.

While these statistics will not likely shock many of us, most local-based brick and mortar retailers still don't add their inventory online for various reasons. More important for local retailers, there's typically no simple way to transfer existing inventory and stock levels to the Web as there is with an online inventory feed.

At the Internet Retailer Conference in June, Christopher Payne, head of eBay North America, shared some interesting new technology that eBay is integrating to make the process of uploading inventory to the Web easier for traditional brick and mortar retailers. eBay recently acquired a local shopping engine, Milo. The plan, according to Payne, is to provide a plugin to local retailers that works directly with Quickbooks Point of Sale, a commonly used retailing system for local-based retailers. Currently retailers have to sign up on the Milo site to be notified when they can begin using the plugin and upload data to Milo. However, because this plugin is based in Milo (and, in essence, eBay), the question remains how these uploads will appear in organic shopping searches.

I expect that Google may choose to create its own plugin at some point, if it wants to truly incorporate the local shopping experience online. With the launch of Google+ and its geolocation check-in features, I can see great possibilities for local retailers beyond just marketing specials (as is currently done with FourSquare and others).


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