This free, no obligation performance analysis will uncover:
    • Opportunities to earn more from your catalog
    • Ways to optimize performance across search, shopping, social, and discovery channels
    • Wasted ad spend and how to reduce it

Google Paid Search & Its New Role in the Shopping Journey

Google paid search is one of the most mature performance marketing channels at nearly two decades old, and it continues to evolve with new ad formats, search behavior, and competition. Increasingly, it is becoming a platform that inspires shoppers, educates them about new products, and drives conversions throughout the year. We tracked the trajectory of paid search in the 2019 Benchmarks Report: Google Ads in Retail.

In this quick guide, we dive into the biggest paid search trends from the report, what they mean for the channel, and how your business can adapt to these shifts.
This quick guide will explore transformative trends and tactics on:
Upper Funnel Engagement
New Mobile Opportunities
Intelligent Keyword Targeting
Holiday Shopping Trends & Strategies

Greater Opportunities Emerge Up-Funnel

Paid search is becoming an increasingly saturated and competitive channel. Many digital marketers have advertised in paid search for years, and more continue to enter the channel. As a result, paid search spend increased 17% in 2018 year over year.

As competition increases on paid search, retailers have had to set more realistic goals, spending more to achieve similar conversions. As a result ROAS decreased 4% year over year in 2018. 
Google is rolling out new ad formats that could shake up the channel, in particular Gallery Ads. Still in beta, these mobile text ads include several images that shoppers can swipe through. The ads appear for broad search queries, helping shoppers at the beginning of their shopping journey. Gallery Ads could help retail marketers improve discovery of their products and drive greater engagement at the top of the funnel.

Moving up the funnel will become increasingly important as more retailers compete for the last click on Google Ads. Reaching shoppers early with an informative and visual paid search ad can help you stand out in a crowded channel and inspire shoppers to make a purchase. Focus on developing campaigns that target non-brand research queries. Use audience targeting like In-Market Audiences to reach shoppers who are actively searching for products you sell. The more granular you make your non-brand campaigns, the better you’ll be able to bid accurately and improve efficiency.

Paid Search Gains Traction on Mobile

Paid search ads on Google have some limitations when it comes to mobile devices. Smaller screens mean fewer ads appearing above the fold and greater competition for the top one or two ad spots. That may be part of the reason mobile ROAS declined year over year on Google paid search ads in 2018.

Still, there are bright spots on mobile paid search that hint at untapped opportunities. Revenue increased on the channel 32% year over year, and CPCs were significantly lower than desktop CPCs—$0.51 on mobile and $0.99 on desktop.
Mobile tends to capture fewer conversions than desktop for many retailers, but its ability to drive traffic could benefit businesses in the long term. Retail marketers can harness this exposure through audience targeting and special promotions to increase sales in the future.

To make the most of mobile engagement, optimize your landing pages. They need to be both informative and fast. Improve site speeds and responsiveness. Simplify navigation so that shoppers can easily explore related products or other product categories. Include prominent links to related categories or feature products shoppers also bought to increase shopping cart size. Shoppers need to uncover products and information easily in order to justify a mobile purchase. The more your landing pages facilitate that discovery and education, the greater the likelihood of a conversion.

Retailers Can Be More Targeted, Personalized With Paid Search

Click-through rates (CTR) increased 39% for paid search desktop ads year over year in 2018. This may be due to the fact that fewer paid search ads are appearing on the SERP, increasing the likelihood of a click. Ad formats like Expanded Text Ads (ETAs) and features like sitelink extensions capture a greater share of the screen, resulting in fewer ads appearing above the fold.
In order to navigate a more limited SERP and continue to grow CTR, you must appear in front of the most targeted audiences. One way to do that is to better utilize match types on paid search. Match types—broad match, modified broad match, phrase match, and exact match—target your keywords to the right audience and funnel traffic to your most profitable ads. Know when to use each of the four match types to improve clickthrough rates on your ads.
Google Paid Search Match Types
Google Paid Search Match Types
Broad Match: This keyword match type will ensure that your ads appear for the widest amount of searches possible. Some searches may be irrelevant to your products, leading to low click-through or wasted spend. If you have the budget and significant impression growth is a priority, broad match can help achieve your goals.

Modified Broad Match: This match type still appears for a large amount of searches, but retailers can add terms that must be present in the search as well. This prevents broad match from going too broad and keeps spend in check.

Phrase Match: Phrase match allows you to target key terms which Google will match with phrases that include those terms. This is a great tool for discovering new and profitable keywords that you can then add to exact match campaigns.

Exact Match: Use exact match for your top performing keywords. Often these are branded terms or high-intent keywords that have a high performance. Although this type captures the least amount of traffic, the relevance of these ads will be high, leading to better quality scores and click-through rates.

Paid Search Shines During the Holidays

From October to December paid search ads had nearly double the conversion rate of Google Shopping ads during the 2018 holiday season. For the entire holiday period, paid search ads on Google achieved a conversion rate of 5.45%, compared to 2.68% on Google Shopping. Conversion rates tend to be higher for paid search ads because fewer ads appear on the SERP compared to Google Shopping ads, but the high conversion rate also speaks to the channel’s unique ability to inform and inspire holiday shoppers.
In particular, paid search ads saw the greatest revenue growth year over year during the first three weeks of October, suggesting that more holiday shoppers are turning to paid search ads to research and purchase gifts. This period is also when ad spend tends to be lower, meaning retailers can reach these early shoppers at a lower cost and have a significant influence on their buying journey.
In order to convert these early shoppers, retailers need to start planning for the holidays earlier than ever before. Target new audiences in September using tools like Similar Audiences and In-Market Audiences. These tools build retargeting lists that you can utilize throughout the holiday season and in the new year.

Optimize mobile campaigns in September and October by creating mobile-only campaigns. This will allow you to bid on lower CPCs than desktop and drive awareness ahead of the big holiday periods in November and December.

Make the most of sitelink extensions. Particularly at the start of the holiday season, shoppers aren’t just looking for products, they are searching for ideas. Include links to related products or shopping guides within your paid search ads to better serve these consumers.

Download our full-season holiday guide and get a month-by-month breakdown of the goals and tactics you need to employ to thrive during the 2019 holiday season.

Paid Search Plays a Key Role for Retailers

Although many retailers are shifting budgets to newer performance marketing channels like Google Shopping, Amazon, and Facebook, paid search should not be overlooked. It continues to inspire shoppers early in their shopping journey, educate shoppers who are researching products, and drive conversions during the holiday season and throughout the year. Budgets may shift to other channels, but they have not replaced the role of paid search in the shopping journey. Savvy retailers will continue to find new ways to differentiate themselves on this crowded but growing channel and capitalize on its unique opportunities.

Upper Funnel Engagement

New Mobile Opportunities

Intelligent Keyword Targeting

Holiday Shopping Trends & Strategies

Upper Funnel Engagement

Overall impressions grew by nearly 80% year over year.
Mobile’s share of revenue increased 19% and accounted for 36% of total revenue in 2017.
The cross-device conversion path of desktop to mobile rose 259% year over year in 2017.

Showcase Shopping Ads Launch Globally

Showcase Shopping ads, a mobile-only format (for now), aim to replicate the feel of window-shopping. Designed to engage shoppers early in the purchase journey, Showcase ads surface groups of related products for broad, generic search queries. These ads incorporate contextual “lifestyle” images that help shoppers become familiar with retailer catalogs. For retailers, they can increase the value of broad search queries.

Shopping Ads Surface on Google Display Network 

Google extended distribution of Shopping ads to its display network, allowing retailers to increase the reach of their Shopping campaigns to more passive consumers, earlier in the purchase funnel. Campaigns target users across the Google Display Network with keyword control and site-level bids.
Showcase Shopping Ads.
Image source: Google

Performance benchmarks

How Do You Measure Up?

Are you reading this report and wondering how your Google Shopping performance stacks up? Remember, there’s no single correct answer when it comes to Google Shopping performance.

Performance benchmarks can and do vary across different industries and business types. Here’s how a few of the most watched KPIs in some of the largest retail verticals active on Google Shopping compared in 2017.  
Apparel/Accessories $88 1.30% 2.28% 4.27 8% -7%
Automotive $222 1.55% 0.99% 8.34 29% -19%
Electronics $197 0.73% 1.72% 10.13 21% 2%
Food/Drug $52 1.32% 2.61% 4.77 -27% -4%
Health/Beauty $61 1.01% 3.91% 3.54 40% 11%
House/Home $205 1.03% 2.87% 6.79 34% 0%
Jewelry $200 0.90% 0.75% 2.97 10% 14%
Mass Merchant $58 1.31% 3.43% 4.14 -10% 13%
Office Supplies $104 0.87% 3.21% 3.60 -15% 5%
Pet Care $21 1.34% 3.81% 1.25 189% -61%
Sporting Goods $112 1.29% 2.71% 6.07 -7% 5%
Toys/Hobbies $79 1.42% 2.81% 10.25 40% 11%
Apparel $88 4.27 8% -7%
Automotive $222 8.34 29% -19%
Electronics $197 10.13 21% 2%
Food / Drug $52 4.77 -27% -4%
Health / Beauty $61 3.54 40% 11%
House / Home $205 6.79 34% 0%
Jewelry $200 2.97 10% 14%
Mass Merchant $58 4.14 -10% 13%
Office Supplies $104 3.60 -15% 5%
Pet Care $21 1.25 189% -61%
Sporting Goods $112 6.07 -7% 5%
Toys / Hobbies $79 10.25 40% 11%
For retailers searching for a place to compete with smaller budgets and capture a growing share of revenue: Keep an eye on mobile.
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