June 18, 2021
Google Smart Shopping: What Makes it Special and How to Make it Work for You
The rollout of organic shopping listings in late April marked a significant change for retailers listing on Google Shopping, with product listings gaining placements on Google’s shopping tab without needing to pay for them.
The last you heard from us, we were beginning to investigate the traffic from these net new product listings. Check out our blog post on how to track organic sales from Google Shopping in Google Analytics.
Range of Volume
Please note that the correlation between number of SKUs and organic shopping traffic differs by vertical, but outliers aside, it is the general trend for Metric Theory clients.
For ecommerce companies that experience difficulties ranking high on the regular organic SERPs, these listings provide a fantastic opportunity to generate free traffic to bolster performance. It can also potentially help guide you on which product pages have the greatest potential if optimized for SEO.
In addition, if you have products that you are not currently advertising on Google Shopping due to low price points or low margins (where ads dollars aren’t justified), you can now run these products for free in the shopping tab. You may also be limiting your Shopping campaigns to top performing products or brands. Now you can run those 2nd tier products for free in the shopping tab. You can do this by creating a feed for all products not currently being advertised in the Google Merchant Center and ensuring that they’re only eligible for Surfaces across Google.
In general, some ecommerce advertisers budget ad spend as a cost-of-sale % of sitewide revenue. With the net-new traffic that organic shopping listings have to offer, you could end up seeing a sizable increase in total sitewide revenue. Let’s say that in April, an advertiser generated $1M in sitewide revenue and they were on target for their ad spend goal of 10% (meaning they spent $100k on paid ads). Assuming all other aspects of the business are similar, May generates $5,000 in organic shopping revenue per day. That equates to $150,000 per month in additional revenue, which brings total revenue to $1.15M for May. That brings them below their ad spend cost-of-sales goal of 10% and means they can increase marketing investment in future months.
The net-new revenue in the above example can help support acquisition efforts, thus adding consumers to your marketing funnel, gaining brand loyalists and other high-LTV customers, and ultimately increasing business growth.
Google is changing things up by switching the product knowledge panel from a sponsored ad to an organic knowledge panel that will be powered by information via product feeds. Up to this point, we have not seen organic shopping listings begin to take away traffic from paid shopping listings, but this could create a significant change. This will involve Google moving organic shopping listings to their main SERPs where the overwhelming majority of Google traffic lives (the Google shopping tab is visited far less frequently).
This could very well be a sign of things to come with Google allowing its organic algorithms precedence to serve a stronger consumer experience to combat Amazon as it follows suit with several other changes Google is making.
In mid-July, Google announced that it would drop commission fees for merchants who participate in its Buy on Google offering, which attempts to streamline consumer purchases. The experience is very different from that of Amazon because Google doesn’t warehouse any inventory or centralize any shipping. There is a free shipping threshold, but it must be reached by adding products from the same retailer. You can mix and match products from multiple sellers, but you’ll pay a shipping fee from all sellers whose shipping minimums are not met and receive separate deliveries from each as well.
Google also released two new product data variables (product_detail and product_highlight) which update the Google shopping tab listings to resemble the product pages of Amazon. Side by side comparison below.
No matter how you slice it, the last 3-4 months of Google’s shopping-specific rollouts heavily favor the SMBs in the advertising world. Google is working on solutions to help SMBs to thrive in the evermore competitive digital advertising landscape, and doing so at a time where these small wins are crucial for many advertisers.