The online advertising arena is just about to get a lot more interesting.
In an announcement made Thursday on the Inside AdWords blog, Google says it is launching a new type of online advertising that will appear in its search results – called Product Listing Ads.
States Dan Friedman, Google spokesperson: “We wanted to introduce a basic ad format that makes it easy for (advertisers) to promote (their) entire product inventory while still providing potential customers with high-quality, relevant results.”
While Google’s text-only search ads – AdWords – have served as its bread and butter for awhile now, Product Listing Ads work slightly differently. First, they’re a lot more visual: advertisers can now list specific products with accompanying images/pictures, instead of just lines of text (“Sponsored Links”) that are placed next to the search results that are based on the keywords that people enter into their search queries.

According to Google, people are twice as likely to click on these image-based ads as they are to click on the usual text ads in the same location of a results page. Product Listing Ads can also include merchant name and price of the product.
Moreover, for the first time ever, advertisers won’t have to “pay per click” (PPC). They will have to pay only when a person buys the search-advertised product. We can call this new scheme “pay-per-purchase” or “cost-per-action”.
Another significant difference of Google’s new Product Listing Ads from standard text ads is that these new advertisements automatically show up whenever a person’s search query matches an item in the advertiser’s Merchant Center account. This means that Product Listing Ads do not require keywords or ad text (research for which, one must admit, can be downright painful); Google will instead be the one to choose which ads are shown based on the advertiser’s product inventory and on its relevance to the search query.
Observed Michael Manta, marketing manager of Diapers.com, “You do give up some control in terms of the targeting, but you also gain a lot and eliminate some of the risk of playing in AdWords, where you might get 100 clicks a month and no conversion. Here we get 100 clicks but we don’t pay for them.”
Google says that Product Listing Ads are still a beta feature, available only to a limited number of retail advertisers. Over time, however, the company will increase the number of users who see Product Listing Ads as well as the number of advertisers who are able to participate.
Here’s Google’s introductory video on the AdWords Product Listing Ads: