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Google Announces Major Changes Coming to Showcase Ads

Ahead of the 2020 holiday shopping season, Google is rolling out notable format changes to Showcase Shopping ads that have the potential to significantly impact performance.

The SERP will immediately show individual products to shoppers instead of grouped retailer-focused units.

                                                    New Experience                       Current Experience

                                        Image from Google’s blog             Image from Search Engine Roundtable

 

In its current format, Showcase ads provide users with a group of relevant products from several retailers, which can then be expanded to see lifestyle imagery and a few, advertiser-curated products. From there, shoppers can navigate to the retailer’s website. In its new iteration, Google nixes the expansion step and shows the shopper products immediately. This also introduces a significant change to how different advertisers are showcased. The advertisers are listed at the top of the unit, and the first retailer is whose products you’ll see immediately on the SERP.

From a user standpoint, this update reduces the number of clicks required to ultimately reach the advertiser’s site. From a choice standpoint, it might not be as ideal. Showcase ads are billed as serving on more upper-funnel queries (and our data suggests that’s true). In the case where a shopper’s search could yield tens of thousands of relevant products across the web, a clearer option for checking out the wares of multiple sellers might actually be preferred. Yes, the ability to toggle across retailers still exists. However, the relative size and prominence of the images versus the advertiser names is likely to quickly draw eyeballs straight down to the image, leaving us wondering whether searchers will even notice that they can toggle to other brands.

It also makes us wonder how much volume advertisers will see if they’re not in the first position. In the current format, there are at least two retailers visible without any scrolling, and it’s clear that there are multiple retailers to check out with products relevant to your query. With the first-place retailer getting all the ad space now, we suspect that retailers in spot two and beyond will receive little attention from shoppers. The only potential redemption for advertisers in those positions is if the carousel automatically scrolls to the next retailer at the end of the first one’s product list.

Other changes include removal of lifestyle image, addition of copy on SERP

We expect the other updates to Showcase, quite frankly, to have limited impact on performance. With no expansion step and products showing on the SERP immediately, the lifestyle image disappears. This was more of a branding opportunity than anything, and its loss should not impact performance. It does remove a barrier, however, with advertisers no longer needing to rely on internal teams to generate creative.

Additionally, the copy that is currently shown on the “expanded” view will live on the main SERP instead. In the side chairs screenshot above, the text above the products is sourced from the Description field in the Showcase ad assets. Again, unlikely to have a major impact on performance, though retailers with promotions or unique value props (ie, “Fast & Free Two-Day Shipping”) could benefit.

Our take: Showcase will be become lower volume and more expensive for most individual advertisers

This is how we expect these changes to shake out:

  1. Showcase traffic for most advertisers will immediately decrease, with the retailers with the most aggressive advertising goals being the few that benefit.
  2. Other advertisers will realize that, in order to compete, they’ll need to snag that coveted first slot by getting more aggressive with bids.
  3. The lower barriers to entry may mean new retailers participating in Showcase auctions, potentially leading to greater assortment and variety for shoppers. But are the retailers that could not get creative made for ads going to have the budgets to compete with the Wayfairs and Targets of the world? Unlikely. Showcase participation may increase, but it won’t be noticeable to shoppers.

The big unknown is on the auction volume side. Will Google start to use Showcase more frequently on a wider range of searches? We’ll be keeping a close eye on what happens. In Q2, this format made up 8% of shopping traffic for Merkle retailers participating in Showcase. As the holiday shopping season peeks over the horizon, advertisers will need to react quickly should traffic indeed drop off with the transition to the new format.

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