Smart merchants factor their promotion calendar into their retail marketing efforts. In an online shopping landscape where consumers rapidly hunt for the best deals, surfacing compelling and timely promotional offers matters more than ever.
Consumers trust Google to present the most appealing, relevant products and offers when entering a shopping query. Mercent recognized Google’s Merchant Promotions as a great opportunity to help our retail clients stand out and align their Google Shopping programs with promotional calendars.
We expected that the new program would yield performance benefits for our return-focused retail clients–the ‘special offer’ badge combined with the added value of the promotion itself would help the promoted product listing ads stand out above others on the SERP, both visually and from a value standpoint.
What We Found
With a substantial group of clients actively participating in Merchant Promotions during holiday 2013, the data supports our initial theory: adoption of the program not only improved click-through rate, it also lifted ROAS, boosted Average Order Value, and yielded a lower cost-per-click. Our findings were resoundingly positive in favor of Merchant Promotions: by all metrics considered, the presence of a merchant promotion vastly improved performance of product listing ads:
Promotions improved PLA ad click through rate by 12.9%
- All retailers in the sample showed improvement in CTR
- CTR improved by as much as 40% for one Clothing & Accessories retailer
Promotions improved Average Order Value by 9.4%
Promotions improved Return on Ad Spend by 6.6%
- 5 of the 7 retailers in the data set realized double digit gains on ROAS for ads with a promotion associated
- ROAS improved by as much as 36% for one apparel retailer
Promotions decreased PLA CPC by 19.6%
- CPC dropped from $0.83 to $0.67
- CPC fell by as much as 23% for one clearance-focused apparel retailer
In order to best capture the performance benefits brought about by use of Merchant Promotions, we analyzed Google PLA activity across 7 large clients who generated over 16 million impressions between Black Friday 2013 and the end of the year (11/24/2013-12/31/2013). In the interest of analyzing unbiased data, we compared PLA ads that generated promotion impressions versus those that did not confined to this sampling of clients. To isolate the immediate impact of the merchant promotion, we analyzed sales tracked through Mercent’s tagging solution, and only initial customer orders occurring within 1 day after a click were considered.
We recommend that all merchants who have an active promotional calendar make use of Google Merchant Promotions whenever possible. Participation is free–though merchants must still pay the CPC normally associated with a product ad–so there’s no downside to adopting the program. When evaluating the efficacy of your Google Merchant Promotions, be sure to consider not only the click performance of the promotions themselves, but of all associated product listing ads.