Google's local inventory ads have been available since 2015.

They are essentially Google Shopping Ads, in the search carousel, that show products stocked in nearby stores.

Clicking on an ad, users can view the product then visit the store website and, from mid 2016, have also been alerted to a click-and-collect option within the ad format.

At the beginning of 2017 another test was witnessed, with these local inventory ads now appearing in 'local pack' search results (see image below).

With this further prioritisation of ads in local search, I wanted to catch up with a PPC expert to get their thoughts on inventory ads and what they mean for retailers.

Rob Watson, Head of Digital Advertising at Supplyant, kindly answers my questions below.

local pack inventory ads

Local inventory ads in the local pack results via PPC Hubbub

Econsultancy: Who do local inventory ads benefit? Aren't brand terms at the forefront of the local searcher's mind? (e.g. Maplin, Best Buy)

Rob Watson: I feel these local inventory ads are all about offering consumers choice.

If you are searching for a particular product it's expected that you will be able to find an online retailer that will stock it. So to then be presented with an ad showing that a local store has that product in stock and you can pick it up within the next hour is extremely powerful. 

Ultimately the price of the product is the big influence on someone deciding to buy, but knowing you have the convenience to collect, without delivery charges, could be enough to win the sale.

Certainly consumers do search for store names, along with product terms, but anyone that's been advertising on Google for a while will know that your Google ads will show for those retailer searches too. So, local inventory ads can really help the smaller local store win against the bigger chains. 

E: More ads in local listings - is this another threat to the truly local business?

RW: We've heard this argument since the earliest days of online shopping nearly 20 years ago. I see this more as an opportunity for local businesses.

Most online retailers do not have a physical destination, and many also focus on drop ship models with no stock, so for a local business, with a sales counter and products in stock, local inventory ads could be extremely valuable. 

E: How easy is it for retailers who might already be running Shopping campaigns to also use local inventory ads? Do many have an accurate picture of in-store stock?

RW: If you've been capable of setting up a products feed and Google Merchant Centre account, technically you will be able to overcome the challenges of setting up local inventory ads. It's not that much more difficult.

If you don't have an accurate picture of what products you have in stock, then running local inventory ads is only going to make life harder for you.

Customers get annoyed when they place an online order for an item that's out of stock, so imagine how they will react if they've just driven 10 miles to your store. It's not going to do your online reputation any favours! 

E: How seriously are retailers taking Google Store Visits, when calculating return on ad spend?

RW: Local inventory ads open up a whole new dimension to tracking challenges. My expectation is that Google will make improvements to this to allow for call tracking numbers, or even an option to show click-and-collect as an alternative call to action. 

The Shop Online option is the only one where you can get any reliable tracking, but it's not clear why anyone would interact with this if their intent is for a local shopping experience.  

E: How are retailers adapting their ad budgets, now that more focus is on driving sales in-store?

RW: There's a general belief that people shopping in-store are of greater value to a retailer, in both average order values and lifetime values.

So understandably, retailers are excited about the opportunities of using their online budget to generate more in-store sales. However, the lack of reliable tracking means budget allocation for local ads is mostly going to be classed as experimental.  

E: What are the pros and cons of the local ads currently available? (local inventory, pins etc.).

RW: The pros will be better average order values and lifetime values. Those two are extremely compelling. Along with the ability to compete with the more aggressive pricing of drop ship online retailers.  

The cons will be tracking. Not just because many of the interactions with the ads will no longer lead to a website visit, but also because it's reasonable to assume more of these searches will be on mobile, further exaggerating all the cross device tracking challenges retailers face.

A final thought on this is what happens if Google starts to open up the shopping ads to local businesses that do not have an ecommerce website. Imagine if your local garden store, hardware store or niche grocery stores were able to take advantage of Google Shopping ads. Retailers that cannot compete with online stores, and whose models are based purely on in store sales.

If these retailers were allowed to start participating in Google Shopping's Local Inventory ads, that could open up an opportunity for Google to further monetise these product searches and be of huge value to those offline retailers. 

To learn more on this topic, check out these resources:

Ben Davis

Published 23 February, 2017 by Ben Davis @ Econsultancy

Ben Davis is Editor at Econsultancy. He lives in Manchester, England. You can contact him at ben.davis@econsultancy.com, follow at @herrhuld or connect via LinkedIn.

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Brian R, SEM at Dell

Setting up LIA feeds is usually a struggle for merchants who don't have that data consolidated, or have it across multiple feeds. Feedonomics can aggregate those feeds to create one master LIA feed for Google Shopping.

9 months ago

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