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February 21, 2013

Google Shopping's Commercial Model Brings More Traffic to Site

By Monica Gleberman, Contributing Writer

Google (News - Alert) transitioned its Google Shopping to a commercial model built on Product Listing Ads back in October of 2012 and it appears to have brought the search engine some good luck. According to the latest report from CPC (News - Alert) Strategy, Google Shopping’s performance has seen significant increases and a surge of traffic in the four months since the change.

The company felt the change would help to keep things fresh. “We believe that having a commercial relationship with merchants will encourage them to keep their product information fresh and up to date,” said Google in a blog post. “Higher quality data – whether its accurate prices, the latest offers or product availability – should mean better showing results for users, which in turn should create higher quality traffic for merchants.”

When the announcement was made back in October, Google said its new ranking system would be upgrade to represent the changes and would now be based on a combination of relevance and bid price, just like Product Listing Ads. “This will give merchants greater control over where their products appear on Google Shopping. Over time they will also have the opportunity to market special offers such as 30 percent off all refracting telescopes,” said Google.

It looks like Google analysts were right. Since the change, CPC Strategy has been research Google Shopping and released a report on the changes it has seen. So far, Google Shopping has received 120 percent more traffic to merchants than Amazon Product Ads.

Image via Top Digital Marketing

“At $0.31, Google Shopping’s average cost-per-click was 32.5 percent lower than Amazon Product Ads cost-per-click of $0.41 in Q4,” said analysts. “Google Shopping’s lack of minimum CPC bid requirements and more sophisticated campaign management tools are contributing factors for yielding higher profits for merchants.”

It looks like Google is getting people to click on its ads, but are still failing in terms of making a sale. The CPC report also stated that Google’s conversion rates are still declining, while Amazon continues to see increases.

For now, because of the lower price and higher clicking rate, Google Shopping holds a slight advantage against Amazon’s Product Ads.

Edited by Rachel Ramsey
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