The Growth of Shopping Ads
Techniques for advertising online are constantly changing. TechCrunch recently reported on the exciting growth trends in digital advertising. Last year was branded ‘The Year Of Mobile’ and it’s not hard to see why; TechCrunch reported that 51% of all ad spend is now on mobile. The shift towards mobile devices creates new challenges for advertisers. Advertisers are now focusing on more visual advertising techniques to take advantage of the changes to ad types. Shopping ads are now so successful, they have become a staple of the online retail industry.
But why are Shopping Ads so useful?
High Click Through Rate
Shopping ads have a higher click through rate than text ad types with the same information. This is for a number of reasons which were examined in a 2014 study by Adgooroo.
Researchers investigated the top 60,000 shopping related keywords used by the top 20 advertisers. The study reported a click through rate of 5.96% for product listing ads compared with just 4.91% for standard text ads. The higher click through rate indicates that the shopping ad was more likely to be clicked each time it was shown to a potential customer. Although the click through rate alone is not enough to suggest that shopping ads produce better results, they yielded a higher percentage of clicks overall.
A number of reasons could be suggested for this finding. The ads are more prominently displayed on the search engine result page (SERP) taking up all above fold screen space. This advantage has only been increased by recent changes to Google which have further increased the size of shopping ads when viewed on mobile. Secondly, the consumer can immediately judge whether the product is the one they are looking for from the ad image. A high quality image provides validity for claims about a product such as it’s quality or condition.
Conversions
A high click through rate is no use without an increase in conversions too! Search Engine Land published one study which suggested that conversions were also positively impacted by the use of shopping ads. The data from Merkle RKG reported that conversions increased by 40% compared with text-only advertisements. The report also mentions the overall increase in clicks from mobile as more shopping ads are targeted to mobile devices.
The Display Network
Google now displays shopping ads in more places than ever across the internet. As recently as May 2017, Google announced that it would be placing shopping ads on the Display Network. As 90% of internet users have access to the Google Display Network, this change will further increase the visibility of shopping ads. Advertisers can re-target products to customers who have previously browsed the company’s website.
Reaching Your Audience
Just as with other campaign types, advertisers can target shopping ads to specific audiences. Targeting can help drive sales by focusing ads on people who are more likely to become customers.
Google have recently increased the size of shopping ads when shown on mobile devices. As product listing ads had previously performed poorly on mobile compared with desktop, this was an important step to improving for mobile platforms. The increase in ad size and frequency had an impressive impact on impressions for mobile devices. Google’s recent changes mean that ads now take up most of the phone’s small screen; ad impressions continue to rise due to the increase in exposure.
The ad type continues to show a sharp rise in popularity amongst advertisers compared to text ads meaning there is no better time to get in on the act.
Limitations
Whilst there are a lot of positives for this emerging ad format, there are some drawbacks. Images form a key part of any shopping ads campaign. Whilst a business selling books would be able to make use of shopping ad features, one selling finance packages would not. The humble text ad continues to be the most powerful tool for advertisers selling services rather than physical goods.
Shopping Ads place great emphasis on the price of the product. However, for luxury items, price is less of a concern for the consumer. For both consumer and company, the quality of the item is most important. For this reason, a consumer would find price discount information irrelevant, as the product image and description would have substantially more influence over whether they make a purchase.
Although they lack some of the great benefits of shopping ads, display ads, are cheaper both for cost-per-click and retargeting. The overall increase in cost to create shopping ads may be off-putting to businesses with a smaller budget. A shopping campaign needs more investment and closer management in order to be successful.
Summary
Shopping ads have become a prominent feature of successful online advertising campaigns. Google has made it easier and even more beneficial to use Shopping Ads, with a constant stream of updates to increase their visibility and frequency. Although they are costly to set up, the potential rewards of a shopping ad campaign are significant for advertisers.
With guaranteed exposure and an increasing number of advertising platforms now available, the only question left to answer is why you haven’t already invested in a Shopping Ad campaign!
The author’s views are entirely his or her own and may not reflect the views of CodifyMedia.
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