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The Daily Stream

Advertising News for the New Media

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Google’s New Advertising System

November 12, 2010 // By: Stream Companies

New System Expands Product Ad in Search Result, Google will receive Cut of the Sales

Google is undergoing changes as it rolls out a new system which allows for expanded Product Advertisements to be displayed in search results.

Product Ads will show up as photos and several lines of text, including price, alongside traditional search results.

The new system has been tested over the past year with over 800 advertisers but was not officially released until yesterday.

What Does Google’s Product Ad System Mean for Marketers?

  • For the first time, major advertisers will be able to automatically have images of their products in search results.
  • Rather than paying by the click, Marketers will only pay if there's a purchase and share revenue with Google.
  • Advertisers will only need to provide Google with the product feed and decide on the percentage of revenue share.
  • Product Ads may be used as an additional advertising channel for businesses along with the AdWords keyword model for search advertising. 
  • Visibility for all products; Businesses provide their entire product feed which allows for all inventory to be in circulation.

Additionally, retailers do not need to buy keywords, prepare the text for the ad or decide which items from their inventory to include in their AdWords campaign. This will make it easier for retailers who do not have the time to manage the constant switch of keywords due to seasonal items or a large inventory.

"This takes a lot of the labor out of managing a campaign,” said Susan Wojcicki, senior VP of Google advertising products, "We are changing the way the back-end works."

Lets look at an Example of  Success with Product Ads,

During the Product Ads Beta, Camping equipment retailer Campmor saw....

  • A click-through rate increase of 260% 
  • An increase in total clicks to their site by 40%

Campmor has 25,000 items for sale and buys about 3,000 keywords from Google's AdWords program. Campmor Marketing Manager Nick Scilingo likes that he doesn't have to spend time writing text ads and choosing keywords but can rely on Google to automatically choose relevant products from Campmor's merchant center account when someone enters a search related to one of their products.

The CPA format has a few pricing options. Michael Manta, marketing manager from diapers.com suggested choosing the percentage based on the category of product.

In the near-term, product ads will only be available to marketers with managed accounts on a cost-per-acquisition basis. Currently, the format is not available on mobile phones.

For more updates on online marketing and advertising, please contact us at StreamCompanies.com

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