Every November, as the temperatures drop and the shopping season heats up, consumers are bombarded with articles and blogs about the hottest new product, device or online shopping trend.
This year will prove to be no different (though hopefully it won’t involve hoverboards).
One trend we’ll be following closely, however, is the adoption of Google’s Showcase Shopping Ads, an emerging ad format designed to enhance the experience of shoppers who are still early in the buying cycle and using broad keywords.
How does the Showcase Shopping Ads program work?
The ads create a better user experience in search results for mid- to top-of-funnel queries, but they also help retailers by allowing them to closely curate the series of images that appear with certain broad keywords.
After a search, a user can perform a horizontal scroll and see various stores (or retailers) in the auction. And once a user clicks on a “store card,” they’ll go to a page that carries a variety of that store’s products. When they click on a product, they’ll be directed to the advertiser’s website.
A New Way to Look at the Funnel
As we all know, direct response profitability lives in the long-tail terms (think: “Nike blue white running shoes mens size 11”) and erodes the higher you go up the funnel (think: “mens running shoes”). For advertisers with strict ROI objectives, upper-funnel queries tend to get excluded or bid down because of performance. Herein lies the issue from Google’s perspective: a lot of clicks and impressions on these queries with less competitive auctions means lower costs-per-click (CPCs).
With emerging strategies like query-driven shopping, advertisers and agencies are developing and executing on strategies to better align bidding to value, which further advances the erosion of top-funnel bidding.
Google believes it will be sending advertisers more qualified traffic through this format, because shoppers are engaging with the advertiser by clicking into the store card and reviewing products the advertiser has available for purchase before clicking through. Once the click-through occurs, Google has effectively provided the shopper with a lightweight shopping experience that could potentially lead to higher engagement and conversion rates on traffic it sends.
In a test of one of our early adopters, we’ve seen a steady uptick in ad clicks (click to enlarge).
While the clicks still account for around 1% of the retailer’s PLA traffic, the click-through rate is around twice that of PLAs. Although it’s a small sample size, the click-through rate is an interesting data point. This could be due to the limited supply of advertising options that are available to consumers through this experience, but we’ll have to watch the data closely in the coming months to learn more.
If this ad format proves successful, we think Google may continue expanding a more robust “on-Google” shopping experience that would increase consumer stickiness on Google and could potentially merge with other Google assets (Purchases on Google) to provide a more complete, end-to-end shopping experience.
Based on the buzz around this ad format, we believe it’s going to be here to stay. But we’ll keep monitoring the results in the weeks to come and update you with our findings.
Until then, have a happy and lucrative Cyber Five!