Why Shopping Ads Beat Traditional Text Advertisements

Shopping advertisements have outpaced their textual counterparts. What is it about them that makes them more successful? According to a report marketing agency Merkle released for the first quarter of 2018:

“Looking at overall performance, cost-per-click (CPC) growth remained relatively steady from Q4 2017, increasing 13 percent year over year. That CPC growth is much higher than what Merkle clients, who skew large retailer, experienced in the earlier quarters of 2017. The rising CPCs have coincided with improved ad quality and higher conversion rates. Click volume growth has slowed significantly over the past two quarters, up 7 percent year over year in Q1 2018.”

Despite a decrease in number of clicks, cost-per-click has been increasing. The report also notes that Merkle’s clients’ Google Shopping spend has grown to 40 percent year over year. Many of the firm’s clients are large retailers, so product listing ads generated 60 percent of their Google search clicks. This jump is 5 percent more than the last quarter of 2017, the highest quarter-over-quarter increase in over four years.

So what makes shopping ads more successful than text ads? They are more enticing to customers, true — but they can also save retailers money.

Why shopping ads have taken off

Sales & Orders details that shopping ads are 73.2 percent more cost effective for drawing in qualified consumers. Even though retailers spent more than four times as much on them than text ads, they still brought in 45 percent more revenue. There are also mobile devices to account for: there was an increase of 117 percent regarding the number of searches that triggered Shopping ads (when compared to year-over-year), and shoppers using a mobile device were over three times as likely to click on a shopping ad over a standard text ad.

Go Data Feed addresses marketers fearful of committing to shopping ads more than they already have: cost-per-click rates for general search terms can become expensive, and providing more details — like price and style — of specific products results in more qualified traffic (and the visual element of listing ads is dramatically more attention-grabbing). Also, shopping ads that appear multiple times have a higher likelihood of conversion.

The website also provides the example of Heal Furniture. Heal, a UK brand, was spending most of its marketing budget on text ads. When it partnered with Periscopix, the latter garnered better ROI by reallocating Heal’s budget into Google Shopping. The partnership managed to achieve 26 percent higher conversion rates and 23 percent lower cost-per-click.

Shopping ads’ success makes sense. Not only are they more visual, but if someone suggests that a friend consider purchasing a particular item, the friend is likely to immediately pull out his or her mobile device and search for it. Many people do their browsing on-the-go (and often know what brands they are pursuing rather than using generic terms), so shopping ads offer more details to searchers hoping for as much information as possible in only a few seconds.

Exercising control

Shopping ads also allow retailers more control over how their products are seen without exacting heavy prices. Mat O’Connor from Sentient Digital says that by matching offers to specific inquiries the way Google Shopping does:

“You can help your potential customers to find exactly what they want at the time they are looking for it. You can also get a high level of control over when and where your ads appear, to help you squeeze the maximum benefit out of them. You only get charged for advertising when someone clicks on one of your ads and gets sent to your website for more details on your offers.”

Shopping advertisements help retailers connect with customers in real time. If shoppers are actively searching for particular deals, text ads cannot adequately address their wishes. Retailers can better assess competition, too, because other companies’ deals are on better display without needing to query an excess of keywords.

180fusion, an SEO and marketing firm that aims to acquire one of the top ten entries on Google’s first page for its clients, makes a good point that all advertisements should have negative keywords. For example, “If you are selling dresses, you may not sell every type of dress in the world. A good negative keyword would be anything to do with wedding dresses because you don’t sell them.” Shopping ads still leave room for disappointed searchers, but utilizing negative keywords ensures that they remain doubly relevant over text advertisements.

Listing ads enable a closer experience to in-person shopping, where browsers can physically see what their options are. By catering to consumers searches on a more intimate level, shopping ads are a win-win for both customers and retailers.

Disclosure:

The author has had a working or personal relationship with one or more companies mentioned in this article in the past. Access to mentioned company’s management and information was made through the author’s personal network. All information was vetted prior to posting.

Disclaimer:

This essay is not intended to be a source of investment, financial, technical, tax, or legal advice. All of this content is for informational purposes only.

Why Shopping Ads Beat Traditional Text Advertisements was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.