Google adopt CPA model with new Product Ads

Net Media Planet is the first company in the UK to beta test Google’s new Product Ads ad format. In a very interesting move, this new product will be made available to advertisers on a CPA basis.

A screenshot showing an example of Product Ads in the US

What are Product Ads?

It’s a new Google AdWords ad format displaying information including price, images, and product descriptions. It’s the big brother to the existing Product Extensions feature in that it pulls data from the Google Merchant Centre, but, crucially, it comes with an automated element that does away with the need to bid on specific keywords and write ad copy.
To use Product Ads, brands have to upload their product inventory to the Google Merchant Centre and to connect that data feed to their AdWords account.
The CPC model will be the main model of remuneration, but we were told CPA would be made available to select advertisers (who have Google conversion tracking in place) in spring 2012. I think this is a very exciting development – we at Net Media Planet have been working on a performance-based remuneration model for seven years, and it’s great to see that Google have discovered the value of this model.

What do Product Ads mean for brands?

1 – Higher PPC conversion rate
We’ve already observed that Product Extensions attract a higher conversion rate due to the richer information provided (e.g. compared to standard text ads), and we think that Product Ads are another step in that direction and will improve return on investment in ad spend.
2 – Simplifying inventory based on PPC
Product Ads go a long way towards simplifying the integration of brands’ inventories in PPC, as advertisers no longer have to worry about keywords or ad copy. All that is needed is a good product image, a short description and a price.
3 – Be ahead of the curve
Brands should take the opportunity to start testing this new ad format as soon as is possible so as to be ahead of the curve. CPA will be implemented early next year, and advertisers who get to grips with Product Ads sooner rather than later will be hit the ground running once that time comes.
You can watch a video introducing the Product Ads below.