Google Hates Free Shipping.
It seems like only yesterday I was championing Google Product Listing Ads (PLAs) as the best thing since sliced bread. It seems pretty amazing that just a few months after writing my last article blowing smoke up their collective bottoms, I’m feeling a bit disenchanted by them.
My Google PLA metrics are at an all time low. CTRs are crap. Conversion rates are crap. The sky is falling.
What’s the problem?
By some stroke of bad luck it appears most of my competitors have decided to jump aboard the Product Listing Ads ship in the last few months. Increased competition in paid search listings is not a new thing and it’s not something I’ve cared about before. There is a problem however, and that problem is simple: All is not even in the wonderful world of Google PLAs. In fact, I’d compare my current situation to trying to run a race with my feet tied together.
The problem is straightforward: On the main search results page, Google shows a nice picture of your item, a snippet of the item title and the price. The prices shown vary – some include free shipping (like mine), others are exclusive of the shipping cost.
To put this into context, one of my [previous] best selling lines is £3.69 including first class delivery within the UK. One of my competitors is selling the same item for £2.75.
On the face of it they’re over 20% (or 74p) cheaper than me, until you factor in the cost of shipping which isn’t included in the price shown on the PLAs. Their cheapest shipping service is a whopping £2.95. So the true cost of that item when you order with them is £5.70 (versus £3.49 through my website – they’re almost 40% more expensive overall).
On first glances my competitor is the cheapest – so it’s no surprise my CTRs have tanked massively. Price is often the first and last thing that people consider when making a purchase – why on earth would they click my ads when my prices are significantly higher?
The average person doesn’t know that the prices quoted on the PLAs they’re seeing are calculated differently – how are they to know that mine includes shipping or that my competitor’s price doesn’t? There’s no distinguisher.
If you hit the “Shopping” tab on Google you can see which websites offer free delivery and which ones don’t. Likewise, Google allows you to enter a promotional message on your PLAs, so you can add things like “Free Shipping on Every Order”. The problem is, these messages are only visible if you hover your mouse over the PLA itself – or if there’s just a couple of PLAs on the SERPS page. If there’s a block of four or more PLAs on a SERPS page those promotional messages are hidden.
Most people don’t hit the “Shopping” tab and very few people will hover their cursor over your PLA – so these methods of distinguishing which vendors offer free shipping are ineffective for the most part.
What can be done about it?
Clearly it’d be better for Google to display prices that are inclusive of delivery charges so that buyers can make a more informed decision. Failing that, they could always distinguish those sellers offering free shipping with a little rosette or similar on their Product Listing Ads. I’m not really an ideas guy, but there are plenty of boffins at Google who could most likely come up with a simple solution to this primitive problem.
You’re probably shouting at your screen “Why the heck don’t you just start charging customers for shipping then?” – and that’s a very good question. The problem is a lot of our offline marketing trumpets the fact we offer free first class delivery, so we can’t just go and switch to a paid shipping model. We’d have lots of upset customers and thousands of pounds worth of irrelevant, inaccurate marketing materials.
When it’s all said and done, the benefits of offering free shipping do outweigh the disadvantage of being completely uncompetitive on Google’s PLAs platform. That said, having tasted the riches of Google PLAs before our competitors pitched up, it’s quite galling to know how many sales we’re losing over something so trivial.
Why should you care?
If you’re in the planning stages of an ecommerce website whether it’s for your own business or for a client, take my advice and think long and hard about the pricing and shipping models you’re going to employ. If you’re only advertising using Google AdWords (like so many ecommerce businesses do nowadays) then you’d probably be better off charging customers separately for shipping – that way your overall prices will remain competitive on PLAs.
Whilst I would be reluctant to try and put an exact value on the sales we’ve lost as a result of this, the figure is large enough to have made a noticeable impact on our website’s turnover as sales from PLAs have gradually declined. It’s not something you can wave away – if you offer free shipping this will affect you.
To conclude, Product Listing Ads work really well – we made lots of sales before our competitors cottoned on to them. At one point our PLA conversion rates were double that of our search network text ads – our CPCs were half the price too! Now though if people do a general search and glance at the PLAs Google churns out, our prices look significantly higher than the rest. Who in their right mind would click a PLA when the price is so much higher than everywhere else for the same product?
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