June 30, 2015Google Tests Price Comparison Within PLAs
Never one to rest on its laurels, Google is testing a new Product Listing Ad format that informs shoppers of their percentage savings within a PLA. In the examples that our digital marketing experts uncovered, Google states about the product, “Price is XX% lower than average online prices.” At first glance, it looks like this could be an extension of the “Value Alert” feature covered earlier this year in Search Engine Land.
Where Google pulls the data to find the average online price has not yet been disclosed. However, based on some quick calculations for a “KitchenAid Mixer” (showing as 14% off in the image below), for the 47 listed on Google Shopping the price was 13.9% off inclusive of shipping but exclusive of tax. This makes sense because tax would vary based upon your location. This suggests that Google is using all of the models that are listed on Google Shopping, as opposed to just the subset featured in the Product Listing Ad.
Also of note is that this test is a complete swing from Google’s traditional method of operating on a cost-per-click model with no preference given to a lower price. Perhaps Google is expanding its strategy to better compete with marketplaces like Amazon and Jet.com. Or maybe Google is responding to more value-driven consumers, one of the five changing consumer behaviors propelling the future of e-commerce.
We are starting some experiments to understand this and are working to understand:
- How does price affect the PLA algorithm? If it’s a factor, perhaps in the future retailers will need to ask — is it better to lower price by a dollar figure or add more money to CPC?
- How is Google mapping the SKU to a catalog to implement the feature — does it make sense for retailers to make sure their products are mapping properly, or perhaps does it make more sense to not map if you are not price competitive?
These are our top areas of investigation — let us know what other questions you have about this new experiment in comments.