The free ride is over. Google Product Search, the free product listings that show up on Google SERPs and under the Google Shopping tab in the US, will be replaced by the paid format called Product Listing Ads by Fall of this year. Sameer Samat, Google VP of Product Management, wrote earlier this month: “Today we’re announcing a new initiative to improve our shopping experience over time — so that shoppers (your customers) can easily research purchases, compare different products, their features and prices, and then connect directly with merchants to make their purchase.”

This new format creates unique ads that visually display a product’s image, price, business name, and other pertinent information. This format is for promoting specific products for sale alongside other advertisers’ products. You can include information like a product image, title, price, and your store or business name. These Product Listing ads will appear in both Google search results, as well as Google Shopping whenever someone enters a search query relevant to a particular item.

The Benefits

The perceived benefits (ostensibly to offset the fact they are no longer free) are:

  • More leads: According to Google’s data, a sizable percentage of businesses experience significantly higher click-through rates with product listing ads versus standard text ads.
  • Better qualified leads: Typically, the more information you feature directly in an ad, the more likely a potential customer is to complete the purchase on your site.
  • Easier management: No keywords necessary. Your product listing ads are automatically matched with the most relevant searches using the targets you specify in your Google Merchant Center account.
  • Broader reach: depending on search relevancy, your product reach could double since multiple product listing ads, or a combination of those and standard text ads, can be shown at the same time.

Note: According to Google, the ads may appear on their other Search Network sites such as Image Search. Also, Product Listing ads will appear in their own box on search results pages, separated from the standard text ads, but they may appear on the same search results page as these text ads.

The Cost

Clicks on product listing ads are charged on a CPC (cost-per-click) basis, or the more conversion-centric CPA (cost-per-acquisition) percentage basis. The latter is currently only available for select merchants in the US. Since product listings don’t use keywords, users must use certain relevant attributes in their Google Merchant Center product feed to define product targets. Basically, these are groups of products specified by brand, product type, and other criteria. Once this is determined, bids can be set for product targets.

How to Create a New Product Listings Campaign

  • Sign into your AdWords account
  • Click the Campaigns tab
  • Click the New Campaign button
  • Name your campaign
  • Select your targeting options
  • Enter your budget and CPC or CPA bid
  • Under Ad Extensions click “Extend my ads with relevant product details from Google Merchant Center”
  • You should see your previously created Merchant Center account listed under extension choices
  • Click Save and Continue
  • Give your new Ad Group a name and select “Create Products Listing Ad”
  • Click Save

The Transition

The new version of Google Shopping will debut this fall, so merchants have the next few months to transition to this new model. Google is offering a few incentives to encourage merchants to begin using the new ads earlier, including a monthly credit for 10 percent of a merchant’s total product listings if they create an ad by August 15th. Existing Google Product Search users will receive $100 in AdWords credit toward new ads if they complete a form before the same date.

Lastly, for merchants that want to stand out among other sellers, they can participate in the new Google Trusted Stores. This program will provide special badges to merchants that add company information to their profiles, such as ratings for on-time shipping and exemplary customer service.