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How the Shopping Ad Auctions Work (EEA+CH)

How the Shopping Ad Auctions Work (EEA+CH)

[MUSIC PLAYING] SPEAKER: When shoppers search
for products on Google, they can see
relevant shopping ads for offers from many stores. To participate in shopping ads
in the European economic area and in Switzerland,
a merchant must be represented by a Comparison
Shopping Service, a CSS, or several CSSes. There are many to choose from. Each CSS offers different
services and different pricing models. They may charge if a
shopper clicks on your ad, or they may charge if
that shopper actually buys your product. All comparison shopping
services compete for ad space equally, including
Google Shopping. The placement of the ad
depends on a few factors. Ads need to follow the
same basic rules designed to make them helpful to users. Each CSS bids in
an auction how much they would be willing to
pay to place a shopping ad on your behalf. Who wins the auction depends
on both the bid, quality, and relevance of the ad. Let’s look at a
couple of examples. For simplicity, we’ll assume
all ads have the same relevance and quality, and the bid
is the decisive factor. Mary runs a large
online shoe store. She works with Super CSS
to place shopping ads. Joe runs a shoe store in Madrid. He works with All Shoes
CSS to tailor shopping ads to his needs. The next time a shopper looks
for a new pair of sneakers, both Mary and Joe hope
to get their attention with their shopping ad. The auction begins. Super CSS bids $0.25
to place Mary’s ad, while All Shoes CSS bids
$0.20 on Joe’s behalf. Assuming all other
factors were equal, since Mary’s CSS bids more,
she gets the best ad placement, but super CSS only pays $0.20
which is the amount of the next highest bid. Mary decides to work
with additional CSSes. She hires Google
Shopping and Impact CSS for the different pricing models
and features that they offer. Joe also adds Apparel CSS,
because they will only charge him if his ad
turns into a purchase. They all participate
in the next auction. Impact CSS bids $0.30,
Super CSS bids $0.25, and Google Shopping bids
$0.15 on behalf of Mary, while All Shoes CSS bids $0.20
and Apparel CSS bids $0.10 on behalf of Joe. Since the Impact CSS
bid is the highest, Mary wins the auction
again, but Impact CSS still only pays the $.020 that All
Shoes bid on behalf of Joe. The price paid to
maintain a position is never determined
based on bids from other CSSes for
the same merchant. What matters is the next best
bid for a different merchant. What Impact CSS charges
Mary for the click depends on the
agreement they have. For example, Impact CSS may
charge a fixed CPC of $0.30 for each click, or they may
only charge Mary a commission if the click indeed
led to a sale. For more tips on participating
in the shopping ad auction, visit the Help Center.

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