The role of Google in an eCommerce strategy
Serena: Getting stuck in then, a lot of your eCommerce pricing expertize is based around Google and Google Shopping. So, setting the scene a little. What role does Google play in a retailer’s eCommerce strategy?
Philip: Well, I guess you know probably to throw some stats at you. Google has a global search market share of 86%. So in another way, think of it as 86% of us, when we first go to search for something, our first port of call is Google. On top of that, 63% of us use Chrome as our default web browser. If you are a retailer, 82% of the retailer’s marketing budget is typically spent through Google.
So your customers are using that as their main window to find you. So primarily, most of your customer’s, whether they know you or not, first entry point is when they load up the web browser, search for a product, and then through paid, organic or otherwise, find you. And really we come at it from the pricing side of things. So we’re trying to support retailers to go into that in a bit more detail and make sure that they have their relevant price so that the algorithm puts them in front of a customer.
Serena: And then there are three ways you can appear. You’ve got your organic ads, you’re paid ads and then obviously listing on Google Shopping. Is there a hierarchy which is most worthwhile to retailers?
Philip: Yeah, absolutely. There’s a number of ways that retailers can spend money with Google. I mean, I won’t necessarily cover them all, but I’ll touch upon the big hitters. Effectively, you have a shopping banner at the top. Historically, you’d have gone to Google and it would have been very much text-based SEO and everyone spoke about the paid text at the top from a retail point of view. But the carousel that you see with the pictures of your products appears both inside search. So if you just load up a Google web browser, the shopping carousel also appears within shopping.
OK, if we can move back to search, you also have the text-based search which sits underneath your shopping carousel. That text-based search of a product does not appear inside the shopping tab of Google. So the paid text-based element is just within the search side. And then both within search and shopping you have the organic area for want of a better word. So everything underneath the carousel at the top is organic and we can go into what influences that in a bit more detail later on.
So if you load up a web browser, you’ll have your carousel, paid adds, then you’ve got the organic. So interestingly, from a retail point of view, a lot more money is now typically going into that shopping carousel as opposed to the text-based ads.
Organic vs paid
Serena: I always find it interesting when I enter a specific search term on Google and the ad appears at the top, but then they also organically at the top of the list anyway. Is that a wasted ad for retailers? Does Google monitor this at all?
Philip: So I guess there’s no harm necessarily in appearing well on both sides. I mean, my argument would be that therefore you have a good relevancy score right? And by having a good relevancy score, you’re probably doing well from a business point of view and therefore you probably have a healthy budget to spend inside ads. So you’re likely to have to have good performance on both sides. I wouldn’t say there’s necessarily a penalty as such.
From a Google point of view, I’d just simply say that you might have an opportunity to look at your statistics. So you might find that because you’re performing well organically and you’re getting a good position, you’re getting a good rank in terms of your position on the organic. You may not actually need to spend as much to get the paid position inside the ad, so actually, by appearing well, it’s actually not a penalty. It’s a good thing because you can potentially got scoped to reduce your spend. Not always, but sometimes.
Serena: Something that I find really interesting that you’ve touched on in the past, is that Google ads can be more powerful than social media ads, for example. Purely because it goes into this theory around interruption versus intent.
Interruption vs Intent
Philip: Yeah, very much so. You have to think about it day to day. You’re on social media. You’re interacting with your friends and you’re doing something that’s completely outside of retail. You’re not even thinking about purchasing something. I mean, I always think of it when you’re watching TV and you look at the car adverts. It’s very much aspirational, “that Peugeot looks great, that Volvo looks great. I want that lifestyle.” This is very much a thought interruption. You’re trying to say to the person who’s watching the screen, “hey, hey you over there? Look at me, look, click this link, click this link”.
Especially in these days where there’s been lots of things about privacy. Apple and Google have had a big change in terms of privacy updates, and privacy framework and Google are doing the same. So your ability to target people with relevant adverts, whether they interrupt or not, is really difficult. For these advertising professionals to find consumers and their habits, it’s very hard to make sure that they’re presenting the right information to them. It’s almost like you’re just throwing mud at a wall and hoping that some of it sticks.
Whereas if you think about the shopping carousel on google shopping and you think about that interaction, the ad is very explicit. If you are searching on Google for a specific product, you have an intent to buy. You might not necessarily buy it in that particular instance, but it’s a much more direct action that you’re taking. Especially when you get to some of the more niche products, right? I’m sure we’re not all searching for lawn mowers all the time, so therefore when you go into Google and you’re searching for that lawn mower and you see a picture of a lawn mower, you’ve got that intent there and you’re clicking it and you’re going to buy it. So that’s why they convert so much better. And that’s why they’re not very glamorous. They’re just typically a white background. Very bog standard, but well shot, well lit, but it’s not a car on a mountain highway for example. But they convert much better because of the intent there.
Serena: Bringing it back to relevancy. You’ve touched on it a little, but what do we actually mean by relevancy score? What factors influence it and how important is it for retailers on Google Shopping?
Philip: Yeah, great question. So relevancy dictates how much you have to bid on for a position inside the shopping carousel. Also, your relevancy score dictates your position in the organic side of both search and shopping. So therefore the better your relevancy score, the better position you have and also the less money you will have to pay to get that impression or get that transaction. And in terms of the things that influence it, there are a few. A softer influence, for example, is having the right metadata in your product and product name. An in-depth description of what the product is. Does it include the right code? Does it include the right color? Does it give the brand name as well? These are the things that retailers can do to, for example, optimize your product name. Also, look at the sizes of images and their quality. Do images have the right metadata and so forth.
The other things which obviously contribute towards your position are less to do with relevancy, but your budget. Google rewards people that have budgets. It’s a bit of a snowball effect in terms of the more you spend, the more it will improve your relevancy score. So all of these factors support your position.
If we’re going to go more specifically into pricing, there’s two things that I have a personal passion project about. The first one is your identification numbers. So I regularly talk to retailers and they tell me how much they’re spending with Google. And then I look at their product inventory and about 10% of their product inventory have GTINs, which are Global Trade Identification Numbers. This is one of the primary data points that I’m sure can be stored inside Pimberly as well, and is stored against a product. This is one of the primary data points that Google uses to know that a product from one supplier, is the same as a product from another competitor. It’s key data for Google to aggregate all that information. And make sure that when consumers search for a specific product, your specific product appears. So it’s a really simple thing to do.
Go and have a look at your inventory and put your GTINs in there. Make sure it’s there because without it, your relevancy score can be really harmed. And it’s quite a simple thing to do.
The last one to check is the price. Price is almost the final whammy in the algorithm. Is your price relevant to support your position? And high relevancy doesn’t necessarily mean the cheapest or the lowest. It’s about working out what price point I have to get to in order to improve my share of impressions, improve my click-throughs, and therefore improve my relevancy score. Ultimately, you might find that sometimes listing slightly more expensive than the average market price is the optimal price point for you.
And this is where BlackCurve comes in: supporting brands with price points and how that influences your performance on Google.
Serena: And that has brought me wonderfully to my next question, which is around BlackCurve and how you help to support retailers with their Google shopping strategy?
Phillip: So, effectively, we take your product inventory, so let’s just say you have products in your PIM system, and we take all of those attributes and we effectively mine Google Shopping to find what price competitors are selling that product at. So very quickly over 1, 2, 3, 4, 5 days of using BlackCurve, we can build up a picture of what the market looks like. We can also see who the main movers are, who’s driving the market, and who’s following who from a pricing perspective. So that’s the one side of things.
Then we look to support our customers by plugging into their Google ads ecosystem. The plug-and-play authenticates them, so they simply put in their email address that they use for their merchant center and their Google ads account and then that pulls in all of their key marketing metrics. So that includes server impressions, advertising costs and so forth. By mapping the two together and analyzing the data and competitor data over the course of a week, very quickly we can start to present insights and reports to retailers, and by large those insights are at the top and tail of your inventory.
You’ll probably have products in your inventory already at the market price, or you might be slightly below or slightly above. They’re kind of ticking along, right? But what we’re trying to do is support you to make sure that you’re not overspending or underspending with Google.
In terms of the underspend, there will be products in your inventory that are too cheap. So really it’s about supporting you to identify: A. Are you too cheap? B. can I actually reduce my spending on these products and still get the same return? Because if you’re selling the product that consumers want, you’re the cheapest in the market and you’ve done some of the other optimization items we’ve spoken about to support your relevancy – then you can potentially increase the price and spend the same. Or, you can simply keep the same price point and reduce your spending and get the same output.
Double Down on your listings
Now sometimes I actually challenge brands to double down, because at this point the algorithm works as a bit of a snowball effect. If you’ve got good relevancy and then you spend more, relevancy continues to improve and it just becomes a virtuous cycle. So actually in that area, you may wish to spend more.
On the other side, where you are a lot more expensive, so you may be the highest in the market, or there may be one or two of you out of a number of competitors that are the highest in the market. Ask yourself, where are you spending a lot of money with Google? And where are you at the highest price in the market? Because unfortunately no matter what you do, you’re just going to be giving money to Google because if you’re high price and you’re spending a lot, you will have poor relevancy, and that’s probably down to price.
So you have two options here: simply keep expenditure up and reduce price. Or turn off the tap from Google’s perspective: you might not be able to purchase that product any better or you’re already at the lowest margin you can go.
Serena: You’ve given so many tips already today, but just to close things off, if retailers could change three things tomorrow to positively affect their listings, what would you recommend?
Quick wins for Google
Philip: GTINs are a very simple thing. You don’t need BlackCurve. You may already have a PIM system. But if you have your feed inside Google. Go and have a look at how many GTINs you have got. Go and validate those GTINs because actually sometimes your suppliers give you the GTINs and they’re completely wrong. There are many websites online where you can go and do that, sometimes even for free, so try and increase your GTINs.
The second thing that we see, from a data perspective, is what the products are named. Question if your product names line up.
First of all, between the Website and Google Merchant Center. I’m surprised at how often they’re different. Try and line them up, because actually by them being different does affect relevancy because Google doesn’t know why they are different.
Why are they different? That’s a big one. I’d be ashamed if I didn’t say go and get BlackCurve. With BlackCurve, load up a website and within 24 hours you can get a view of all the competitors inside your landscape and find out your position. You can plug in your Google Ads ecosystem and straight away receive information on where you can optimize.
I had a client spending just over 3 million on Google Ads alone just before Christmas. More than 50% of retailers are spending more than £20,000 a month on Google. Often that’s the retailer’s biggest expense. So if you can do anything to optimize that, whether it be improving your feed data or using PIM systems to make sure that your data is accurate and correct and healthy, or using a pricing system to make sure price supports your relevancy, you’d be silly not to.
Serena Bury: This episode has really highlighted the importance of Google Shopping listings and Google ads as I personally had completely underestimated them. It’s been so fascinating to learn a bit more about why Google Shopping should be a priority in your eCommerce strategy.