Back in May, Google announced that its newly branded Google Shopping service would soon become an exclusively paid service in which product listings are ranked by a combination of bid price and
Google positioned the change as a good thing for online retailers and product searchers alike. For searchers, abandoning free listings would eliminate duplicate results,
reduce SERP “clutter,” and thereby improve the overall relevance of product listings. For merchants, paid listings offer greater control over where listings appear, more visibility on the
SERP, and better reporting.
As many have noted, eliminating free product listings will likely enhance Google’s revenues in Q4 as well. As my colleague Kevin Lee observes, “Google
loves it when revenue accompanies relevance improvements and spam reduction.”
Online retailers, on the other hand, are justified in expressing frustration that Google’s massive
change is coming right now -- at the beginning of the frenetically competitive Xmas shopping season. How much budget should they allocate to Google Shopping PLAs (Product Listing Ads)? How should
their teams manage the demands of yet another auction-driven listing service? How can they avoid under-spending on PLAs, thus ceding SERP real estate to competitors -- or overspending
(exhausting budgets and reducing already razor-thin profit margins to zero)?
What To Do?
Managing the transition to paid listings isn’t going to be easy, even
for experienced e-commerce players. Still, there are things that you can do. Here are 10 action items to help you make it through this crucial time.
- Seize The PLA
Opportunity. There’s always an adoption lag time when a new e-commerce technology arrives. It took a long time for merchants to get comfortable with Adwords, and the same will be true
of PLAs. There are real opportunities here for those who know what they’re doing.
- Watch Your ROAS. Some retailers have reported that their PLAs do
not appear to be correctly mapped to search keywords, resulting in bad ROAS. Watch your ROAS like a hawk during this early shakeout period.
- Watch Your
Bids. Managing yet another PPC-based auction isn’t a trivial matter. Make sure you have this talent in-house. If not, bite the bullet and outsource the task.
- Be Specific. The way PLAs are mapped to keywords rewards granularity. Make sure your product listings are correctly mapped to the PLA taxonomy.
- Be Relevant at Every Link of the Chain. While PLA bids are crucial, so is relevancy. Apply your PPC Quality Score best practices to PLAs to get an edge on your less-relevant
- Know Your High-Converting Items. Items with better conversion rates ensure that you’ll be able to afford to outbid your competitors.
Make sure you know what your best converting PLAs are.
- Know Your High Profit/High Dollar Contribution PLAs. Even if a given PLA doesn’t provide
you with a stellar profit margin, it may contribute enough to your bottom line to justify a higher bid.
- Know Your Loss-Leader/Gateway Items.
Online shoppers often have multiple items in their carts before they check out. Don’t dump a money-losing PLA if it results in other profitable sales.
- Consider Lifetime LTV. Make sure you know which of your PLAs result in long-term customer acquisitions, even if they’re not driving immediate profits.
- Co-Manage CSE and PLA Efforts. Integrate your PLA campaigns with CSE (Comparison Shopping Engine) initiatives, where bids are managed at
the product (not keyword) level. Again, if you don’t have the expertise or technology in-house to execute this task, seek out a qualified agency.