Fast-Moving Consumer Goods (FMCGs) rely on being sold in high volume to make up for relatively low profit margins. This type of cumulative profit sales model can produce great returns if done right and is well-suited to ecommerce as more consumers begin to explore online shopping aided by the increase in shopping via smartphones and tablets. Shopping campaigns, formally Product Listing Ads, offer a great paid way to promote FMCGs at the top of Google. They account for up to 40% of total paid traffic and ultimately lead to increased clicks, sales and revenue.
FMCGs and Shopping Campaigns
To understand why Fast-Moving Consumer Goods and Shopping Campaigns are so complimentary it’s first important to understand some fundamentals of each.
Fast-Moving Consumer Goods (FMCGs)
Fast-Moving Consumer Goods (FMCGs) such as confectionery, toys and household items are typically ‘low margin high volume’ products. Relatively low profits mean generating a positive Return on Investment can be more challenging as there’s a smaller expendable margin per sale. As such ensuring that the channels that are used to generate FMCGs sales are optimised for maximum conversions at minimum cost is fundamental: The quality and quantity of leads much be high whilst the Cost-Per-Acquisition (CPA) must remain low.
Shopping Campaigns (Formally PLAs)
Shopping campaigns, which will be imminently replacing Product Listing Ads, bridge the gap between a Google Merchant Centre (which in turn are connected to your product database) and an AdWords account. This allows products to appear (almost automatically) at the top of Google’s paid results. Ads appear with a product image, price, business name and other compelling data which has been proven to produce a significantly higher Click-Through Rate (CTR) despite competing against other products in the same format. Shopping campaigns allow for quick categorisation of Product Listings without manipulating the raw feed received into Google’s Merchant Centre, something that wasn’t previously possible.
Shopping campaigns compliment FMCGs
Shopping campaigns are perfectly suited to Fast-Moving Consumer Goods as FMCG landing pages are more likely to result in a first time (impulse) conversion than a more expensive product which generally takes multiple touch-points before conversion.
Listing FMCGs in this way also improves the quality of visitors to product landing pages. Thanks to additional information displayed below each product image (replicable in organic with rich snippets) search visitors have a deeper understanding of the product before clicking through to the landing page. This ultimately lowers landing page bounce rate and increases the conversion rate through the medium as more clicks are converted into sales.
Alternatives to shopping campaigns
Shopping campaigns are fantastic, but how do they compare to other methods of displaying FMCGs in Search Engine Result Pages (SERPs)?
Product Listing Ads vs Shopping campaigns
Shopping campaigns are replacing Product Listing Ads, so it’s important to ensure that performance benefits, rather than decreasing. A recent study by Wordstream on the effectiveness of Shopping campaigns found that by segmenting product feeds (by brand) with Shopping campaigns meant:
- CTR fell (initially) from 2.35% to 1.86%
- Average CPC fell by 73% to just $0.11 (from $0.42)
- Conversion rate also increased by a respective 0.13%
- Most importantly, Return on Ad Spend (ROAS) increased from 272% to 446%
Despite CTR falling the overall ROAS increased by almost double. CTR can be addressed by bidding more aggressively where impression share isn’t at its optimum, however click quality should be considered (via conversion rate) when trying to increase CTR. It’s likely that the reduction in Click-through Rate went someway towards the improved figures that are reported by Wordstream in this example.
Shopping campaigns vs paid text ads
An alternative to shopping campaigns is ‘normal’ paid text adverts. These ads are basic text ads ran through Google AdWords, but can give a more detailed text description of individual FMCG’s (although arguably product images give more detail). Google’s main interest is getting people who search to see the most relevant and useful results, so when someone searches for a particular product (For example a ‘Buzz Lightyear toy’) Google will most probably display shopping campaigns.
There’s a great report from Paul Koch at RKG on the growth of product listing ads against paid search ads. In it Paul reports some interesting findings:
- 42% of their paid search traffic is through PLAs
- Click-through rates (CTRs) were 163% higher than non-brand paid text ads
- Conversion rate was +59%, compared to non-brand paid text ads (+18%)
- Cost-Per-Click (CPC) was 47% lower compared to non-brand paid text ads
The results highlighted in this report are echoed in many other success stories, with Product Listing Ads out-performing paid text ads in business critical areas (conversions, conversion rate, ROAS). There’s also less direct competition between shopping campaigns as Google has only ever shown a maximum of 10 (and usually only 5) paid product listings for each search query. Although only a maximum of three text paid ads appear at the top of Google the similarity with organic ads, coupled with additional ads on the right hand side, make competitive clicks much more of a challenge for paid text ads.
Shopping campaigns vs Sitelink Extensions
Before the introduction of Product Listing Ads and Shopping campaigns ‘product extension ads’ were a popular way to promote FMCGs through AdWords. These extensions listed products directly below paid text ad descriptions, giving more screen retail space to those which utilised them.
Sitelink extensions, which are still around today, still adopt a similar style, with some paid advertisers using sitelinks to promote products, product ranges and particularly services (which wouldn’t show through Google’s merchant centre). In 2014 Google added enhanced sitelink extensions which give the ability to add two lines of copy under each sitelink, increasing the quality of visitors through these extensions.
There are lots of positives about sitelinks: They help increase overall quality score, have a higher CTR compared to ads without sitelinks and are fantastic for helping drive traffic to more specific landing pages. However there are some downsides to sitelinks. In the context of FMCGs these include:
- Relevance – Sitelinks may not always promote the most relevant FMCGs to a search query
- Importance – Product related sitelinks will appear over other ad extensions which may be more useful to consumers
Ultimately sitelinks weren’t intended primarily to promote products and FMCGs, whilst Shopping campaigns were. Shopping campaigns produce more engaging ads which will appear at the top of the page, pushing any time and investment in sitelinks down and decreasing overall effectiveness.
Shopping campaigns vs Product rich snippets
Organic results appear naturally lower than paid ads on Google’s SERPs, but do have the advantage of being able to product a similarly engaging format to product listings by utilising rich snippets. Adding schema.org mark-up to product pages can enhance organic results by displaying product images, price, review details and lots of other quality-boosting information to organic listings.
Product rich snippets don’t require a Google Merchant Centre, which can make them more straight-forward to implement. Adding product rich-snippets will help increase your organic positions and qualify your organic traffic, too. In fact product rich snippets can actually provide more information related to specific search queries than shopping campaigns can. With organic listings not requiring continuous cash-flow, it’s a great way of increasing high-quality leads and ultimately conversions, too!
Clicks on paid search listings beat out organic clicks by nearly a 2:1 margin for keywords with high commercial intent in the US. In other words, 64.6% of people click on Google Ads when they are looking to buy an item online!
It is claimed that rich snippets can help increase organic CTR by up to 30%, which can be a massive differentiator when selling FMCGs. Wordstream claim that over 60% of ‘highly commercial’ clicks come from PPC, meaning that realistically it’s crucial to adopt both a paid and organic strategy in order to maximise your online Fast-Moving Consumer Goods sales.
FMCG Shopping Campaign case studies
It’s clear to see theoretically that Shopping campaigns can help drive more ecommerce sales for FMCGs, but how have companies who implemented these ads witness performance change in reality?
Plow & Hearth
Plow & Hearth sell home and garden FMCGs through a catalogue and ecommerce website, incorporating PLAs to it’s search strategy in early 2012, just as Google Shopping was just beginning to roll out globally.
The Virginia based company saw 129% increase in site traffic with engagement increasing too: A 9.8% bounce rate reduction and a visit duration increase of 14.7%. More importantly, conversion rate increased by 12% and Revenue by 8% over a 12 month period.
BabyEarth supply eco-friendly baby supplies to consumers through their ecommerce website. After expanding their PLAs to incorporate the entire product catalogue BabyEarth increased Product Listing Ad revenue by 193% in the first month followed by 210% in the second, with the overall average monthly increase in PLA revenue being 129% over the first twelve months.
Whilst this doesn’t compare revenue to before PLAs were implemented, it’s clear to see that PLAs can have a massive affect on increasing overall market share and driving more conversions in order to sell more FMCGs online.