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Google Shopping Growth: Is It Living up to the Hype?

Steve Tutelman

For e-commerce marketers utilizing Google as part of their acquisition strategy, 2014 was a volatile year. In April, Google rolled out major changes to its Google Shopping offering, and in August, retired its precursor, PLA campaigns, forcing all etailers to get on board the Google Shopping train.

The shift sparked considerable buzz, interest and speculation about the promise of the new shopping engine — and sent retail marketers scrambling to understand and exploit the massive channel. Considering that brands upped ad spend in the Google Shopping channel by 72%, industry watchers anticipated some serious YOY growth when comparing the older Google PLA to the newer solution.  

Not surprisingly, marketers looked to the all-important holiday kickoff (Thanksgiving through Cyber Monday) as a litmus test for the effectiveness and potential of the channel. So how’d it do? It depends who you ask. Some agencies and analysts reported disappointing growth in the channel, with YOY revenue growth rates as low as 5% over the five-day period. Not quite the explosive growth some analysts were projecting.

Our data, however, painted a more promising picture.  Sidecar analyzed a random sample of same store Sidecar customer data and compared KPIs over the holiday kickoff in 2013 and 2014. We saw two very promising trends:

  1. It cost less to make more; revenue generated via Google shopping was up over 35% while cost/sale was down by 25%.  Yep — it cost less to make more.

  2. More exposure = more conversions; Impressions were up by 147% and conversion rate increased by 47%, indicating that retailers can drive more traffic while maintaining or increasing conversion rate, as long as they have the right bid on the right product at the right time.

And therein lies the truth of the channel.  By using product feed attributes to return product ads directly correlated to the customer’s search term, Google is forcing its retailers to think differently — to prioritize relevant product bidding and take a far more quantitative vs. content-driven approach to marketing in the channel.

While 2014 may have been a year of adjustment, 2015 is the year to bring your Google Shopping game. Invest time in understanding exactly how the channel works, and what tools and resources you need to leverage it to meet your ROI goals and create a more direct conversion path for your customer.

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