Google Announces Format Change to (some) Google Shopping Ads

In recent years, Google Shopping has become one of the most (if not the most) important channels for online retailers. In most of our eCommerce client accounts, Google Shopping is one of the largest volume campaigns, and in most cases generates the best returns as well.

Unfortunately, unlike paid search, Shopping contains some limitations which have not been fully addressed. Most critical of these limitations is query segmentation. The default Shopping campaign setup targets based on the product rather than the search query.

That is the nature of the campaign, but in doing so, it loses some of the inherent advantage of search advertising. This update from Google begins to address that limitation (although in a limited way).

Understanding the Update

Search campaigns rely on pinpointing search queries at various points in the buying cycle and creating separate bids, ads and landing pages to best address the searcher’s intent.

By contrast, Shopping campaigns target at the product level, grouping together various search intents into one ultimate bid.

Currently all Shopping search results are showing one item from various merchants (in most cases); if an item is clicked, the charge is made to that retailer based on the bid.

Current Shopping ad format for all queries

However the same item in your feed can be shown for the search ‘tennis shoes’ as for ‘nike men’s metcon 2 tennis shoe’ – with the same bid for both queries – despite widely varying search intent and likelihood for conversion.

The current solution to this issue is to leverage various campaign structure ‘hacks’ to divert higher funnel keywords to separate campaigns with lower bids, or exclude them altogether.

The new Shopping ad format called ‘Showcase Shopping Ads’ which will present up to three products from each retailer. A click will only be charged when the searcher clicks on an individual product after browsing those choices.

Showcase Shopping Ads

This ad format change will impact queries that Google determines to be ‘upper funnel’ – about 40% of search queries. Upper funnel queries are more general search queries that indicate a searcher is in the research, rather than buy, phase.

This latest update from Google has not fully resolved the search query segmentation issue, but it is certainly a step towards recognizing and addressing it, and this may help further improve Shopping ROI moving forward. 

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