Stats Retailers Can’t Ignore When Crafting Their Google Ads Strategy

Google is fast at work refining and consolidating its Ads platform. The tech giant has rolled out a number of new features and ad formats that increase automation across channels, improve the mobile experience, and drive in-store shopping. As Google Ads has evolved, so too must retailers’ performance marketing strategies. My employer, Sidecar, a performance marketing technology company, has observed several new trends that are reshaping the retail market.

We conducted in-depth research, analyzing performance for hundreds of retailers that had active shopping and search campaigns in 2017 and 2018. What we found was that retail marketers’ Google Ads budgets shifted dramatically in those two years, as did their top revenue drivers. That means new opportunities are emerging within Google Shopping and paid search. In order to capitalize, marketers must rethink their approaches to these channels.

Here are three of the biggest trends that are shaking up Google Ads in 2019.

The Tables Have Turned for Paid Search and Shopping Ads

Both paid search and shopping ads experienced significant growth in terms of spend in 2018, but the rate of growth inverted. In 2017, Google Shopping growth reached new heights with a 34 percent increase in ad spend within the channel. While ad spend still expanded in 2018, it did so at a lower rate of 24 percent. Paid search, on the other hand, jumped from 2 percent growth in 2017 to a 17 percent ad spend increase in 2018.

Credit: Sidecar

Our research team believes this inversion of growth trends may indicate that Google Shopping is reaching maturation as a channel and retailers are redistributing their budgets to paid search, social, and newer marketing channels like Amazon.com.

In light of this budget redistribution, retailers should take another look at paid search and see how the channel can fill gaps in their overall performance marketing strategy. For example, the content heavy and customizable nature of text ads make them ideal for engaging upper funnel shoppers and nurturing them towards a purchase. In addition, paid search can be a powerful tool for testing and scaling positive and negative keywords that can be applied to Amazon or Google Shopping.

Amazon Expands its Reach on Google Ads

Amazon has come to dominate impression share in Google Shopping and paid search for several retail verticals. Our research team analyzed Amazon's growth in five specific verticals: apparel, home improvement, office supplies, sporting goods, and mass merchant.

Office supplies experienced the greatest increase in competition from Amazon, with the retail giant’s impression share increasing to 60 percent in paid search and 42 percent in Google Shopping. It’s important to note that Amazon has been active in paid search longer, and its growth in the channel is steadier. It began advertising in Google Shopping just three years ago, and at certain points stopped advertising in the channel altogether, which may contribute to fluctuating impression share.

Credit: Sidecar

Credit: Sidecar

While Amazon’s expansion into Google Ads is worrisome for some retailers, it’s important to remember that impression share isn’t the most important key performance indicator on Google Ads. Increasing return on ad spend (ROAS) is still possible as impression share declines. If retailers’ ads appear before the right shoppers at the right times, they can continue to drive revenue growth. Retail marketers should take a granular approach to their marketing data and develop campaigns that target high-intent, branded queries and layer on day-parting, geo-targeting and demographics to further refine their campaigns.

Mobile Revenue Share Reaches a Tipping Point

It’s no surprise that mobile’s presence on Google Ads continues to grow, but 2018 marked a critical tipping point for the channel. Google Shopping mobile conversions actually surpassed desktop conversions in Q4 2018. Our analysts predict that soon, paid search mobile conversions will surpass the 50 percent mark as well.

Mobile conversions represented 52 percent of all conversions on Google Shopping, and 44 percent of all conversions on paid search in Q4 2018. Our team projected what that growth will look like in 2019, and we anticipate the trend to continue. Mobile will capture 49 percent of conversions on paid search and 57 percent of conversions on Google Shopping.

Credit: Sidecar

Mobile is no longer an add-on to retailers’ desktop-driven strategies. In fact, it's the baseline for performance on Google Ads. That means retailers should optimize for every opportunity on mobile with faster site speeds, mobile-friendly design and navigation, and easy checkout features.

Mobile tends to drive greater ROAS on Google Shopping because shopping ads capture the majority of real estate on mobile search engine results pages. Retailers with high levels of mobile traffic should consider breaking out Google Shopping campaigns by device to bid products more granularly. For many retailers, certain products will perform much better on mobile than on desktop, and vice versa. With a separate campaign for desktop and mobile, marketers can set the appropriate bid for every product.

Google Ads is a significant part of retailers’ online marketing strategies because it reaches shoppers at every stage of the funnel, from initial research to consideration and purchase. While the channel will continue to evolve as new features roll out and shopping behavior shifts, it’s critical that retailers understand their product data, device performance, and top-performing keywords. With these insights, retailers can take a more targeted approach to Google Ads and engage their most valuable audiences, despite continued market upheaval.

Mike Farrell is senior director of market and customer intelligence for Sidecar, a performance marketing technology company.