Within the week, all U.S. advertisers will be able to use Google Product Listing Ads, Google announced yesterday. Product Ads feature product images, price, and merchant names in shopping related searches.
Product Listing Ads are usually charged on a cost-per-action (CPA) basis (although cost-per-click bidding is also available), meaning advertisers only pay when a user clicks on an ad and completes a purchase on their site.
Advertisers will share a percentage of revenue with Google. The ads work through Google Merchant Center accounts and don't require keywords or additional ad text, just a product feed.
Google has tested the ads with roughly 800 advertisers since the ads launched last year.
Alex Cohen wrote about how Paid Listing Ads, which replaced some text ads in Google's paid search results, dramatically changed the nature of paid search advertising in "Why Google Wants to Eliminate Bidding In Exchange for Your Profits." He called the ads revolutionary for three reasons:
- You don't have power over when your ads appear.
- You can't set your bid. Your ads can only show up if you agree to participate on a CPA basis.
- The system is entirely controlled by Google. It's ... connected to your Google Merchant Center account. You define the parameters and then hand the keys over to their system. Regular AdWords advertisers don't have the option to display these types of ads.
It's opt-in like agreeing to the iTunes terms of service is opt-in: it's something we want and the price of entry is going along with whatever Google asks. It's all or nothing.
According to Advertising Age, "In the near-term, product ads will only be available to marketers with managed accounts on a cost-per-acquisition basis; ultimately, though, self-serve advertisers will have access. Right now, the format won't appear on mobile phones."
Google said that, during testing, searchers were twice as likely to click on a Product Listing Ad versus a standard text ad in the same location
Here's Google's video about the service:
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