Google Shopping: Boosting Conversions and Cutting Marketing Costs

Written by Søren Kjær Nielsen

Google Shopping has revolutionised online advertising, delivering increased turnover and reduced marketing costs per conversion. This powerful platform, also known as Product Listing Ads (PLA), displays ads with product details, prices, images, and links to interested Google searchers.

Originally launched as a test in the US in November 2009 and made available to all advertisers in 2010, Google Shopping took a little longer to reach Denmark, Norway, and Sweden, arriving at the end of 2013 after a few months of testing. Now, with over half a year's worth of Google Shopping/PLA advertising experience, we can review its impact.

How Does It Work?

Google Shopping ads rely on data feeds submitted by advertisers, containing all the necessary product information. These ads appear when users perform product-related searches with purchase intent. For instance, searching for "running shoes" may not trigger Google Shopping ads, but searching for "Asics Kayano 20 dame" (women's Asics Kayano 20) will likely display relevant product ads. This approach turns Google search results into a comprehensive product overview, akin to price comparison websites.

Advertisers' Experiences

The feedback from our numerous customers using Google Shopping is overwhelmingly positive. Almost all advertisers have witnessed increased AdWords conversions since incorporating Google Shopping into their strategies. What's more, they have enjoyed a notable 20-30% reduction in marketing costs per order. These statistics solidify the notion that utilizing Google Shopping is a smart move.

However, it's important to note that demand for specific Google product searches has its limits. In many cases, our customers' campaigns already cover a significant portion of these searches. Furthermore, with more competitors joining the platform, visibility decreases, leading to higher average costs per click.

The Future of Google Shopping

While currently not mandatory, providing product categories in your data feed will likely become a requirement in the future, following in the footsteps of the US and UK markets. Categorization facilitates the display of relevant products for specific searches and aids in creating localised versions of the online marketplace, www.google.com/shopping.

Moreover, there are numerous optimization opportunities for your Shopping campaigns, including automated optimization based on your product's profit margin.

Embrace the Game Changer

Google Shopping has proven to be one of the most transformative additions to AdWords in recent years. It has undeniably shifted significant sales away from advertisers who have yet to join the platform. We highly recommend getting started with Google Shopping as soon as possible to unlock its tremendous potential.