Online retailer Notonthehighstreet is investing more in Google Shopping ads than text ads

Online marketplace is moving most of its performance budget into Google Shopping now that it’s a major source of traffic and sales.

The advertiser has become reliant on the search giant’s visually-oriented search comparison service over the last year. As a result, most of its performance ad spending, particularly paid search, has moved from traditional text ads to Shopping ads, said head of performance marketing Luke Boudour, who declined to say how much exactly. That’s a big shift over a short span of time, which Boudour said comes from the ability to push people directly to product pages on a relatively lower cost per click with Google Shopping ads.

“We’re skewing our performance budget toward Google Shopping, specifically when it comes to paid search, because it’s been easier to drive sales from those ads,” said Boudour. Google Shopping’s pay-per-click ads usually lead to much higher click-through rates, he said, and added that more clicks means more spend on ad budget.

With Google shopping ads, bidding occurs at the product level, rather than on specific keywords. This means that Google ultimately determines which keyword or keyword group products on fall into based on information taken from the advertiser’s site. Everything from product titles, price, branding and imagery are taken into the site and placed into a feed on Google Shopping, which the retailer worked with technology platform Goa to manage.

The result is more qualified traffic and consequently better conversions, said Boudour, as shoppers are more likely to click on ads that have relevant production information such as price and imagery. Text ads, on the other hand, had become too costly for as a result of the unqualified clicks they generated when shoppers accidentally clicked on them due to not being able to see the product’s price, appearance or reviews.

Other retailers have had the same idea as Google Shopping ads accounted for eight (82 percent) of retail search ad spend in the U.K. in the first quarter of 2018, according to a study of 40 million search ads from more than 260,000 retailers by intelligence platform Adthena.

“We’ve seen more of our retail clients shift more of their search budget into Google Shopping rather than text ads, said Hannah Langley, head of client services at media agency Threepipe. “Google has reduced the amount of inventory for text ads in that time, which has sped that transition up.”

Despite Google’s attempt to promote Google Shopping in organic search results over rival services ruffling European regulators, retailers like view it as a key part of their performance strategy. Google Shopping is the only real way of tapping into searches at scale given the retailer is reluctant to get too close to Amazon, which Boudour said is a “direct competitor.”

Get more exclusive coverage, research and interviews from the modernization of retail. Subscribe to our weekly retail briefing now.

More in Marketing

Google delays third-party cookie demise yet again

For now, Google seems to have next year in mind as the latest end date for its plan to eliminate third-party cookies.

WTF is the CMA — the Competition and Markets Authority

Why does the CMA’s opinion on Google’s Privacy Sandbox matter so much? Stick around to uncover why.

Marketing Briefing: How the ‘proliferation of boycotting’ has marketers working understand the real harm of brand blockades

While the reasons for the boycotts vary, there’s a recognition among marketers now that a brand boycott could happen regardless of their efforts – and for reasons outside of marketing and advertising – that will need to be dealt with.