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Jet.com Takes Off In Google Shopping, Impression Share Climbs

Freshly launched e-tailer Jet.com is poised to make waves this holiday season with a mammoth marketing budget and ambitions to challenge Amazon’s online marketplace model.

Jet emerged in late July, but according to a recent ChannelAdvisor report, they already rank as the fourth largest marketplace in terms of sales. Jet’s $100 million year one marketing budget has also been widely circulated.

Worrisome for advertisers though as the holiday season inches closer is Jet’s willingness to play in the Google Product Listing Ad (PLA) space, a historical safe haven with higher conversion rates, lower costs per click, and perhaps most importantly, no competition from Amazon.com, which has steadily increased its text ad presence over the past couple of years.

Jet Taking Off

Google Shopping Auction Insights data, which is easily accessible in the AdWords UI, for Merkle|RKG advertisers show the members-only startup moving up the page indiscriminately across many verticals since launch.

Looking at PLA search impression share -- the estimated number of impressions received divided by the estimated number eligible -- across a handful of industries for the month of September, we see the following results:

Jet Auction Insights Industry Impression Share

Jet's PLA impression share in each of these verticals has steadily increased since their late summer launch. Jet appears to have concentrated a majority of their early paid search spend in PLAs, though they do serve brand and non-brand text ads as well. For each of the retailers in the sample set, Jet did not appear in the search Auction Insights report for text ad impression share.

Whether increased text ad spend will follow in subsequent months remains to be seen. Nonetheless, early Merkle|RKG data reveals Jet impression share increasing significantly across many different verticals for PLAs.

In surveying month-to-month performance and traffic volume for several of our own larger advertisers, Jet’s market entry has not been particularly adverse. However, the opposite has held true for our smaller advertisers, who are beginning to lose traffic as Jet moves up the search page.

Though the number of impressions served by Google on a given query varies, search impression share is a zero-sum game. As Jet spends more on PLAs and incrementally increases visibility, smaller advertisers with tighter margins and smaller budgets will see fewer impressions and falling impression share.

One Merkle|RKG advertiser saw Jet impression share surpass 20% in August, their first full month post-launch.

Jet Auction Insights Impression Share by Week
For this particular advertiser, impression volume declined 10% in the same month-over-month period. To be sure, this correlation is imperfect and does not imply causation, but Jet’s entry into the competitive landscape remains disconcerting.

Consider too the timing of Jet’s market entry and expansion into the paid search sphere. We’re just weeks away from the 2015 holiday season, allowing Jet enough time to gather necessary data and implement campaign and bid optimizations in advance of a substantial holiday push.

What Can You Do?

Fortunately, advertiser’s hands aren’t completely tied. For starters, optimizing the feed to provide complete data, title testing with various attributes, and ensuring detailed and concise product descriptions and titles can directly correlate to click through rate and conversion rate growth. These improvements to relevancy directly relate to quality score, and ultimately improve ad rank and reduce click costs.

Campaign structures are equally critical to playing in an increasingly competitive landscape. We recommend segmenting campaigns to funnel search traffic at varying levels of specificity, using priority settings and negative lists to allocate queries.

It’s a foregone conclusion that advertisers should bid higher for searches which are more likely to convert. Customers who include manufacturer or product-specific information in their search, for example, are inherently further down the purchase funnel than those who search for more general terms. Advertisers should serve on generic queries as well, but these audiences likely carry different value and bidding should reflect that.

Campaign segmentation and traffic funneling enable cost savings on lower converting queries, revenue growth on higher converting queries, and generally improved bidding. Item ID product targets for more granular bidding is also a worthwhile test.

To put this into a Jet-specific context -- more precisely targeting specific types of searches enables advertisers with tight ROI targets to increase bids for searches with higher expected returns, allowing the best performing products to better compete with Jet’s growing PLA presence.

Conclusion

It’s too early for doom and gloom, and it’s definitely too early to deem Jet an Amazon “killer” -- after all, Jet.com founder Marc Lore estimates first breaking even in 2020 with $20 billion in annual sales and 15 million paying customers.

Regardless, Jet will certainly be a major paid search player this holiday season. Advertisers previously comforted by Amazon’s aversion to PLAs will be forced to battle this ecommerce newcomer during the year’s biggest shopping season.

With just two months remaining before peak holiday volume, it’s more important than ever to make sure Shopping campaigns and product feeds are fully optimized. Jet will be a powerful player in the coming months, but online retailers should remain focused on what’s within their control.

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