Google Shopping delivered 63% more revenue to retailers year over year in 2017, marking a new era for the channel. It is now a necessity for retailers looking to magnify their online business.
But with growth comes new challenges. Intensifying competition and new consumer purchasing behaviors have forced retailers to develop more granular campaigns and identify tactics to set themselves apart from the pack.
The 2018 Google Shopping Benchmarks Report sheds light on a channel in flux and empowers retailers to navigate emerging trends in Google Shopping. Sidecar analyzed e-commerce data across 300-plus of U.S. retailer sites to determine the definitive state of the channel and help retailers understand how they stack up to the competition.
Below is an excerpt from the 2018 Google Shopping Benchmarks Report. Access the full report here.
The Game Is Changing
Retailers’ investment in Google Shopping continues to grow, but the playing field is changing. Ad spend growth across Google’s search network—encompassing both Google Shopping and text ads—grew 20% from 2016 to 2017.
Drilling down into spend between Google Shopping and text ads, we see that Google Shopping remains on a steady upward trend year over year, while investment in text ads has flattened over time.
Our hypothesis? Text ads have been an established pillar of search marketing strategy for some time. Flattened spend is indicative of a channel that has evolved little in terms of format and has not seen dramatically new management approaches. This is a channel ripe for innovation.
Google Shopping, on the other hand, is a newer channel. As such, it has naturally presented major growth opportunity as retailers evaluate its potential and determine optimization approaches that work.
More recently, however, the success of early adopters has attracted newcomers to Google Shopping. Some key indicators in performance-oriented metrics, which we’ll cover throughout this report, show the channel may be approaching a saturation point. More than ever, retailers need a dedicated, sophisticated, and agile strategy to succeed in Google Shopping.
Competition Grows Steep
As retailers have realized the e-commerce opportunity in Google Shopping and allocated more budget to the channel, competition has continued to heighten.
The influx of retailers in Google Shopping now demands intricate, ever-evolving strategies to stay ahead of the curve. Among the leaders is Amazon, the world’s largest retailer.
Across select verticals, Amazon garnered conservative shares of impressions at the outset of 2017, hovering between 10% and 20%. Impression share rose sharply to its highest levels May through September, peaking at 60% in the house and home vertical, then tapering and remaining steady throughout the year-end holidays.
When the largest of retailers is vying for shoppers’ attention in Google Shopping, how does one manage to stand out? Look to CPC and revenue trends to reveal opportunity to invest where few competitors have.