New Changes to Google Shopping Could Cost You Big Time!

This week Google announced some new upcoming changes to Google Shopping. The announcement sounds very exciting. Google’s headline was ‘Your Shopping ads may soon be eligible to show on YouTube and Google Discover”.

So, what exactly does this mean for advertisers?

What it means is that starting the week of June 17th, 2019, Google advertisers running Google Shopping ads will be automatically opted-in to have their PLA Shopping ads not only appear as they do now on Google, but also on YouTube and on the Google Discover.

So, who is this change going to benefit?

Before we look at who this change could possibly benefit, we need to first look at where Google Shopping ads appear now and where Google Shopping ads will appear once Google implements the change.

Currently, Google Shopping ads appear at the top of Google’s main page above text ads and above organic results as well as under Google’s Shopping link. Cut and dry. Potential buyers search Google for an item, and they see products that match what they are searching.  Shoppers can also look for more advertiser’s product offers and filter for items under Google’s Shopping link.

Simple, right. Product ads are served to those actively shopping and very likely prepared to purchase.

With the upcoming change, retailer’s Shopping ads will now be also served on the YouTube platform as well as on Google Discover.

So, what is YouTube and Google Discover?

YouTube of course is a huge platform consisting of videos. With over 1.3 million people viewing YouTube videos every day, being able to serve Shopping ads on YouTube has the potential of dramatically increasing the number of potential buyers that see an advertiser’s products.

Google Discover was introduced in 2018 by Google. Google Discover’s mission is to show relevant content to users even when they are not searching. In the simplest terms, Google Discover was designed to work like a social media feed. Designed for the iPhone, Google Discover works to show topics and news items geared toward an individual user’s preferences. It provides information about individual’s interest without a user having to search for those interest.

Although not a ton of data on Google Discover, Google itself report that it currently has more than 800 million monthly users. Regardless of the exact number, it is safe to say those numbers will be significant given that Google Discover is built into many Android home screens.

Is this going to be a good change?

Whether or not this will be a good change is up for some debate.  Absolutely, the change will be good for Google as it will increase the number of ads Google serves undoubtedly increasing their revenues. Maybe a good time to investigate buying Google stock?  Well, that is another subject all together.

For advertisers on the other hand, only time will tell if this is a good change leading to an increase in profitable sales or if this change will drive up the overall cost per acquisition.

What I have been telling my private clients is that this change needs to be tested in order to determine whether the increase traffic and increased ad costs coming from showing ads on YouTube and Discover will be profitable.

My gut feel is that for some advertiser’s it will be profitable while for some others it most likely will not.

What do I mean? Well let’s use a couple of my private clients as an example.

I have one client that sells automobile repair manuals. Being able to show ads on YouTube and Discover could be very successful for this client. Imagine someone is watching a YouTube video on restoring their 1967 Mustang and right next to the video is a Shopping ad for a 1967 Ford Mustang Complete Guide to Restoration.  Probably a more than decent chance of conversion.

However, I have another private client who sells t-shirts. Imagine someone is watching a YouTube video on brewing your own beer and a Shopping ad should up next to it for a Budweiser t-shirt.  Probably not a great chance of conversion even if the ad is clicked.

So, what is the bottom line?

Advertisers should test and be cautious with their testing. Traditionally, Google Display ads (and really what this boils down to is an expansion of Google’s display ads) do not convert nearly as well as ads directly on Google. When Google searchers are not readily looking to buy, their likelihood of them purchasing is significantly less.  Makes sense, right?

In addition, it is not clear how Google will display results on the new platforms to advertisers. The new Smart Shopping campaigns are completely blind in where ads are being served.  Will this be the same kind of deal?  Let’s hope not! Will advertisers be able to opt-out of one and not the other.  For that we will have to stay tuned.

Last bit of advice

For my private clients, I’m advising that they initially opt out of showing ads in YouTube and Google Discover, except for initially testing on high converting campaigns or when it seems to make sense as in the examples above. 

However, start small with your budget and measure what it does to your overall sales and costs. Advertisers want to be profitable when advertising in Google and to do this you need to know many key performance metrics and constantly measure changes and how they are affecting your profitability and overall sales.

Lastly and maybe the most important, advertisers will need to manually opt out of serving ads to YouTube and Discover the week of June 17th, or their ads will all begin to run throughout these platforms which may come as a shock to the overall costs for those not prepared for this change!

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Happy Marketing!
Andy Splichal

ABOUT THE AUTHOR:

Andy Splichal is an online marketing strategist  with more than a decade and a half of experience helping companies increase their online presence and profitable revenues.  Although this blog focuses on driving profitable traffic through Google AdWords, True Online Presence offers additional services for lead generation as well as other proven marketing strategies customized for each client.