Google’s new Comparison Shopping Partners mean retailers can get a 20% reduction in cost per click through their Product Listing Ads.

But what strategy should retailers employ?

The background

Google Shopping has been helping consumers track down products quickly and painlessly for over a decade, helping to drive impressive growth, particularly in the last five years. The only trouble is, the platform also rapidly gained a monopoly in the sector, which led to the EU slapping the tech behemoth with an enormous antitrust fine.

In response, Google has taken steps to increase competition in its Shopping results with the creation of Comparison Shopping Partners, certified Comparison Shopping Services (CSSs) that help businesses make the most of its shopping ads with a discount on CPC (Cost-Per-Click) ad spend to retail clients. This has thrown open the doors to new CSS providers, levelling the playing field through lower costs. (Disclaimer: I work for Summit, which created Productcaster, one such CSS).

What does this mean for retailers? The most immediate benefit is a reduction in cost. Google isn’t just welcoming other CSS providers onto the Shopping platform, it’s actively incentivising them to do so. There is up to a 20% reduction in CPCs to advertisers who use CSSs as well as an ad credit of up to €32,000 every 30 days based on a spend match against ad spend. 

Unfortunately, that doesn’t mean that retailers can simply continue to advertise as normal through product listing ads (PLAs) on Google Shopping and see roughly 20% less on their ad bills. Those not already working with CSS providers need to choose a partner, as well as assess what impact cost reductions will have on their marketing strategies. 

Reaping the benefits

As with all marketing activity, retailers need to ensure they approach this with key objectives in mind. For example, what could that 20% saving, plus the matched ad credit, do for you? Does it mean extra resource to plough back into more ads, or does it mean maintaining the status quo and diverting funds to another part of the business? Navigating tough financial times or priming for growth? 

Although this hugely significant deal from Google has only really been on the ground for the last few weeks, we’re already seeing some seriously impressive results, and not just in savings. The following two strategies demonstrate the distinct options available to advertisers to make hay while Google’s sun is shining and the importance of having clear goals in mind. 

Example 1: Reduce cost and maintain sales revenue

Retailers can make significant cost reductions while maintaining revenue levels and achieving a better cost of sale (COS). Using existing bid management tools to slowly reduce the cost targets while maintaining the same levels of traffic, we have seen CPC reduction of 16% with one client.

reducing cps and keeping revenue

Achieving reductions in CPCs can even be done by manually reducing your maximum CPC bids gradually over time. Monitoring performance daily and making bid changes will certainly improve costs. We recommend reinvesting any savings made from poorer performing campaigns into top, high margin revenue-driving products.

Example 2: Maintain average CPC and increase revenue

Retailers could opt to keep spend the same but generate more revenue. By maintaining the same average CPC, we have seen one company drive 17% more traffic, 22% more impressions and a 4% increase in impression share. The company paid less per click to unlock greater traffic, sales and revenue. 

maintain cps and increase revenue

Navigating new Shopping

The changes to Google Shopping with the introduction of new, accredited CSS partners are still in the early stages and we can expect it to evolve further. Yet it’s important to stress that those retailers who are aware of this now have a lot to gain. The market is far from saturated which means there really is a first mover advantage. 

Ultimately, accessing CSS benefits doesn’t have to involve overhauling your entire Google Shopping activity. Some Google CSS partners will allow retailers to transfer Merchant Centre accounts over and won’t require them to relinquish control of their accounts.

Look for commercial transparency, simple migration and a decent comparison site, and you can make the most of these newly reduced CPCs.

ppc training

Hedley Aylott

Published 2 August, 2018 by Hedley Aylott

Hedley Aylott is co-founder and CEO of Summit.

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