How Google Is Upgrading Its Retail Experience


With a host of new innovative features, Google is personalizing the search experience and delivering optimization tools for retail brands.

At this year's Google Marketing Live (GML) event, the tech behemoth presented its strategic roadmap for Google Ads. As expected, AI was a hot topic--but the most interesting development was Google’s focus on a single vertical: retail. With an expanded array of ad formats, AI-driven adjustments, and new data management platforms, Google is poised to elevate shopping ads to the next level.

Retail media, the fastest growing marketing channel
Retail media has exploded over the last few years, becoming one of the fastest growing marketing channels both globally and in the U.S. It’s a key part of the marketing media mix for many advertisers, especially retailers, and it’s clear Google is trying to get in on the action.

Years for Search, Social, and Retail Media Advertising Markets to Grow from $1 Billion to Over $30 Billion
Source: eMarketer

Given Google’s shopping-ad innovations presented during GML, it’s possible it could succeed in convincing brands to move their dollars from retail media to Google Shopping. Retail contributes nearly 30% of total digital ad spend and is forecast to reach almost $90 billion in 2024. With such an optimistic outlook, it’s no surprise that retail is a top priority for Google.

Retail Continues to Increase Its Massive Share of Digital Ad Spend
Source: eMarketer

Google’s revamped search experience
Google unveiled a series of exciting enhancements to shopping ads that users and retailers will find valuable.

Loyalty promotions: Retailers now have the option to offer fenced prices for select customers.

New Shopping ad features: Leveraging AI, Automated Product Highlights will automatically generate selected product snippets, reviews, and pictures. Other new features include: video highlights, providing an immersive experience in shopping ads; a 3D spin effect to showcase products like footwear; and virtual try-on, allowing retailers to display their apparel on a diverse set of body types.

In another game-changing move for retailers, Google will also show visual assets in organic search listings.

Elf Cosmetics Google Search

All the above enhancements are expected to boost user engagement with shopping ads. However, with increased traffic and engagement, optimization is key. Google already has robust technology to optimize auctions in real time to meet business needs, but now it’s raising the bar.

Marketers will have an additional tool at their disposal to drive greater profits for their brands: Called Profit Optimization Goal, the new automated bidding strategy, available in PMax and Shopping Ads, will allow brands to prioritize products with higher margins when more than one product matches a search query.

Lastly, Google announced the Google Ads Data Manager. Since first-party data is considered the most valuable asset in digital marketing, Google has developed a new data manager to supplement Google Ads and Audience Manager. The primary objective of the Google Ads Data Manager is to create, consolidate, and manage first-party data. It also aims to streamline the integration of first-party data with Google Ads for both targeting and measurement.

What this means for marketers.
Google consistently prioritizes users and continually refines its search platform to make it more engaging, accurate, and efficient in delivering results. With a recent emphasis on the retail vertical, Google is trying to give advertisers exclusive new tools while improving the consumer experience to pull people away from some of the other platforms gaining share. Agility is key to success, so marketers should quickly pivot and review their strategy focusing on three main aspects of the business:

  • Engagement: implement new and enhanced ad formats. More attractive ads will bring higher user engagement, and late adopters will see decreased traffic.
  • Profits: The option to optimize digital media toward margin vs. top-line revenue in real time is a game changer that can’t be omitted in strategy planning.
  • Targeting: Google is not a new player in the market, but its new experience is going to shake up the digital media landscape. Therefore, a careful review of the marketing mix model is critical to account for demand growth in new Google Search Experience.

Google’s innovations will challenge other platforms to use AI for customer experience improvement and margin optimization for profitability. Ultimately, brands should invest where their audiences are and where they see the highest return on investment. However, brands should also use all the accessible tools and features to improve performance. This includes making sure to test Performance Max and other AI-powered ad products designed to reach people with more engaging and personalized ad formats.

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