Google Shopping Ad Extensions & its Impact on Ads Campaign Performance

August 18, 2020
Google Shopping Ad Extensions & its Impact on Ads Campaign Performance Download PDF

Google’s shopping ad extensions are not only some of the most important components in its Ad Ranking algorithm, but they also make your ads stand out. These extensions are easy to implement with no additional cost and boost overall click-through rates (CTRs). Over the years, these ad extensions have become very popular on search ads but are comparatively rare in Google Shopping Ads. Most ad specialists would like to implement them right away, which is increasing their popularity.

However, to make the most of these powerful tools, it’s important to proactively analyze impactful ad extensions by industry and keywords, rather than reactively analyzing and experimenting on winning combinations. That’s where the Ad-Intelligence comes in handy and gives you an edge over your competitors.

Ad-Intelligence can collect Ads impression data from various regions, multiple times a day. The ad content analysis is an important feature of this solution that gives you insight into which kinds of extensions are not only popular but are also playing an important role in the ad’s position.

With GrowByData Online Advertising Intelligence, we have collected and analyzed the characteristics of the top five google shopping ads data, focusing on ads extensions on over 7,000 keywords across consumer goods verticals — like Musical, Sports and Outdoor, Apparel Accessories, Health and Beauty and more — from January 2020 to May 2020.

Here are the Ad extension insights we found from the 2.3 million shopping Ads on Google:

1. Google Merchant Promotions

This feature allows advertisers to include special offers and promotions[1] such as discounts, free gifts, and free shipping on Google Search and Google Shopping. After price, Merchant Promotions are the best way to make your shopping ads stand out from competitors. They make the ad/product even more persuasive for enticing prospective clients to visit their sites.

Figure #1

Google Shopping Extensions & its Impact on Campaign Performance - Image 1

According to Google, Merchant Promotions helped Office Depot improve:

  • Click-Through Rate (CTR) by 8.1% in the UK and 9.8% in Germany
  • Conversion Rate (CVR) by 18.1% in the UK
  • Return on Investment (ROI) by 9.3% in Germany

This shows that the impact of Google Merchant Promotions is very high on CTR and CVR.

It is a free ad feature from Google that all businesses advertising products on Google should implement. If you want to add promotions to your product ads, Google Merchant Promotions setup provides you a step-by-step guide to get started right away.

We looked at five months of data to see which shipping labels were most popular among the top five google shopping ads from January 2020 through the end of May 2020. One-day and two-day free shipping was used more often in January and February. But free three-day shipping was the most popular choice in the last few months, as indicated in Graph #1 below. This could be due to the limitation on the number of people working and the increase in online shopping caused by the COVID-19 pandemic. The takeaway, however, is that there isn’t always one shipping label that remains consistently popular. Preference is constantly changing, and it is crucial for retailers to stay on top of popular trends.

Graph #1

shipping label trend 2020

Looking at the sales and price drop data over the same period, we found that a higher percentage of ads ranked No. 1 used the ‘sale’ and ‘price drop’ tags versus ads ranked No. 5, as seen on Graph #2 below.

Graph #2

ad rank by sale & price drop

2. Google Local Inventory Ads

Google Local Inventory Ads allows retailers to reach both local and nearby customers. They provide retailers an opportunity to showcase real-time local inventory information, such as in-store availability and pricing, alongside their Shopping Campaign ads. This feature allows local storefronts the opportunity to leverage their proximity to shoppers to increase traffic and sales.

Figure #2

slippers google shopping ads

According to Google, 76% of people who search for something nearby on their smartphone visit a related business within a day, and 28% of those searches result in a purchase. Additionally, “near me” or “close by” type searches grew by more than 900% over two years. Therefore, making sure to show up on local searches is extremely valuable.

To set up your shopping campaign to promote local inventory ads, you will need to follow Google’s Local Inventory Ads implementation guide.

Per our analysis, the most popular tag used by the top five ranked ads were ‘in-store’ and ‘pick up today,’ as seen in Graph #3 below.

Graph #3

local inventory tag usage by rank

We looked at the five months of data to see what local inventory tags were most popular among the top 5 google shopping ads from January to May 2020. Graph #4 below shows that the ‘in-store’ tag was extremely popular in January and February, but it seems to have dropped completely in March. This drop was most likely caused by the lockdown/quarantine in place with the rise in COVID-19 cases.

Since mid-May, tags like ‘pick-up today’ and ‘in-store’ have started to increase again. This most likely is due to the lockdown ending and retail stores reopening. Once again, the data indicates that there isn’t one tag that is always popular. Retailers need to provide consumers with the right tags at the right moment.

Graph #4

local inventory tag trends 2020

3. Google Shopping Ads: Product Ratings and Reviews

This new extension aggregates your product’s reviews from across the web and presents a “star rating” based on a five-star scale below your ads. The numbers next to the stars show the number of reviews for the product. Figure #3 is an example of what ratings and reviews look like on the ads.

Figure #3

Rating extension in blenders ads

These days, consumers are increasingly looking at reviews to help make their online purchase decisions. According to a survey by Dimensional Research, around 90% of customers said their buying decisions were influenced by online product reviews. [2] This tells us how reviews are not only important but crucial for online retailers.

Graph #5 below shows that over 58% of google shopping ads ranked No. 1 included reviews. We can also see that the percentage of ads that have reviews slowly declines as we move from No. 1 (58%) rank to No. 5 (54%).

We see a similar trend or pattern in the ratings as well. 54% of ads ranked No. 1 have a rating score, and that percentage gradually drops to 50% at ads ranked No. 5.

Google product reviews and ratings give consumers a sense of trust and credibility about the product. While having reviews and ratings does not automatically put you in the top ranks; the data indicate that you have a better chance of getting a higher ad rank with reviews and ratings than without.

Graph #5

ad rank by reviews & ratings

When we break down the google shopping ads that have ratings into ranges of ratings (Graph #6 below), we see that over 90% of the ads in the top five have ratings of 4 or higher. This shows that a higher rating can help you increase your ad rank because those ratings indicate product trustworthiness and credibility.

Graph #6

ad rank by ratings

Google has a step by step guide on how to sign up if you would like to add Reviews & Ratings to your product ads.

At GrowByData, we suggest you really focus on these Google Ad extension features — ratings and reviews, shipping labels, and local inventory tags with your shopping ads — to increase your expected click-through-rate (CTR). As a result, you can improve your quality score and ad rank without increasing your ad spend. Our Ad Intelligence solution collects ad details as outlined above to provide insights into ad gaps that advertisers can act on to improve your Ads Campaign Performance. Google has made it simple and easy to set up all of these ad extensions.

Learn more about the Marketing Intelligence.

Talk to an Expert

GrowByData Content Team

Team of Data Analyst, Business Analyst, and Project Managers with years of experience in data analysis and online retail industry

Don't Forget to share what you have learned

Like Our Content?

Receive Latest Insights In Your Inbox