Google recently announced a handful of updates being made to Product Listing Ads on mobile devices, including the formal release of the Purchase on Google option (or as it’s more commonly known in the industry, the ‘buy button’) as well as the Expandable Shopping Ads feature.
Let’s walk through these updates and examine what the impact of each stands to be.
The Buy Button, er…Purchases on Google
Long anticipated and detailed at length in my colleague Mark Ballard’s piece, the buy button, or Purchases on Google as the product has actually been named, stands to provide a significantly different mobile shopping experience by allowing shoppers to convert directly through a Google property as opposed to through an advertiser’s website.
The product, featured only on mobile Product Listing Ads, will allow shoppers to save purchase credentials tied to their Google accounts which can then be used to purchase from any advertiser opted in to Purchases on Google. This should make the conversion process smoother for those users who take advantage of the product, and advertisers may be able to get more out of their mobile ads if this streamlined process is a more desirable conversion option than their mobile website.
While PLAs currently convert at a rate 6% higher than non-brand text ads on phones for the median AdWords program, this isn’t nearly as high as the 39% greater conversion rate PLAs have compared to non-brand text ads on desktop computers.
Part of the reason for this discrepancy is a result of there being less real estate for mobile text ads, so only the best converting ones show. Still, the buy button holds great potential to push PLA conversion rate relative to text ads on phones more in line with what’s observed on desktop computers.
Advertiser Concerns
Much of the concern coming from advertisers regarding this product has to do with how much control they will have over their customer’s data and over the experience users receive once they click through to the Google property.
Regarding customer data, Google made it clear in their announcement that giving advertisers control of their customer data is a key piece of the product, stating ‘retailers own the customer communication and can offer customers the option to receive marketing and promotional messages.’
However, some methods of third party tracking of orders, sales and the like may not work through the Google-owned property, and it remains to be seen how well Google’s setup will allow for third parties to track user activities or if advertisers will have to fully rely on Google reporting.
In terms of the user experience, the product page is ‘retailer-branded’ according to Google, with the advertiser name and logo featured at the top of the page as shown in this example from Under Armour provided in the announcement.
However, that appears to be the extent to which the page is ‘retailer-branded’ in the example Google showed in its announcements. There doesn’t appear to be any additional real estate where advertisers can adjust messaging, visuals, or other aspects of the experience.
Thus, the branding impact of a click to this property would appear to be less than the branding impact of a click through to the advertiser’s website – where advertisers naturally have total control over the color scheme, messaging, and feel of the experience.
No Product Suggestions with Purchases on Google
Perhaps even more alarming is that the mock-up doesn’t seem to provide the advertiser with any room for cross-selling or up-selling possibilities. An early report on the buy button from the Wall Street Journal stated that ‘any recommendations for other things to buy will only be from that merchant,’ but the examples provided don’t seem to show any such capability.
Hopefully this is just a product of the mock-up and there will be additional real estate dedicated to allowing advertisers to show additional product selection, either selected by the advertiser or automatically surfaced using information in the feed to determine other relevant products.
Product Listing Ads already provide a 13% lower average order value than non-brand text ads, according to our Q2 Digital Marketing Report. The difference in AOV is actually greater on phones, with PLA order value 20% less than that produced by non-brand text ads for the median AdWords program.
With seemingly no ability to show users additional related products to either cross-sell or up-sell, this gap may get even larger with the buy button.
Expandable Shopping Ads
Citing that 1 in 5 users who are shown Product Listing Ads on phones swipe through to view additional ads, Google released Expandable Shopping Ads which will expand the size of PLA units once users swipe to view more products in the carousel.
This gives phone users a bigger image to use in looking through products and allows for a product title to show below the image where formerly there was no room for a title.
As shown in this PLA vs text ad performance graph from our DMR, the click-through-rate (CTR) of PLAs is 120% higher than the CTR of text ads as users are much more drawn to the visual appeal of image-based ads.
However, on phones the CTR of PLAs is actually 12% lower than the CTR of text ads for the median client. This is likely a result of three factors at play:
- Many PLA ‘impressions’ on phones are never actually viewed by users, as they exist within the product carousel which must be swiped in order to reveal the products that exist to the right of the initially displayed products. As Google says that 1 in 5 users do swipe through the carousel, this means that 80% do not, and the majority of the products which are featured in the carousel never see the light of screen.
- There are way fewer text ads shown on mobile devices than on desktop, and those that are featured are very prominent. Thus, text ads have a much greater CTR on phones than on desktop computers.
- Desktop text ad CTR is depressed by search partner traffic. On phones, search partners are a much smaller factor and thus don’t pull down text ad CTR as much. PLAs are not effected much by search partners on either device.
![rkg-q2-2015-paid-search-partner-click-share-by-device]()
The new expandable PLA function may help to increase the click-through-rate of PLAs on mobile devices by making the units much larger with additional product information. It may also help with conversion rate as users will know more about the product with the title displayed, leading to more informed clicks.
Replicating Desktop PLA Success
More than anything, these changes seem focused on upgrading PLAs to replicate the success of PLAs relative to text ads on desktop computers.
While PLAs still outperform text ads in terms of conversion rate on phones, they’ve yet to match the relative performance seen on desktops. And as shown above, PLA CTR actually lags behind that of text ads on phones.
By allowing PLAs to take up greater real estate and display more detailed information, Google may be able to increase CTR and conversion rate for PLAs with just the Expandable Shopping Ads feature. Add in the possible gains of the Buy Button catching on and producing higher conversion rates, and Google may be able to steadily push PLA performance and investment to new heights on mobile.
While the buy button is getting most of the press and attention, I’m equally interested to see how the Expandable Shopping Ads feature will impact performance for our advertisers. Stay tuned to the RKG Blog as we chronicle the impacts over the coming weeks and months.
