Google Acquires Channel Intelligence: PLAs will never be the same

On June 12th, Elite SEM search experts attended the Google New York hosted Agency Roundtable to discuss Google’s acquisition of Channel Intelligence (CI).  CI manages online product content for retailers by optimizing data feeds for the Google Merchant Center as well as managing bids and budgets for PLAs.  Representatives from leading agencies, Google’s advertising department, and the heads of CI gathered to discuss how this acquisition would benefit agencies and the retailers they market products for.  Here’s what we gleaned from the Agency Roundtable:

New Google Product: The Knowledge Graph

The knowledge graph is a database of over 18 billion facts Google has collected that will be organized and presented on “knowledge cards”.  A knowledge card will typically contain an image, map, specs, etc. of whatever the user searched and will be the first thing that appears on the SERP.  Product knowledge cards will contain shopping results based directly on data feeds provided by retailers, with just one image of the product searched and listings from multiple retailers below.  For more information on the knowledge graph, visit http://www.google.com/insidesearch/features/search/knowledge.html

Another new search feature will allow you to browse and buy multiple products offered from one retailer right on the SERP, rather than having to direct to the retailer’s website.  Also mentioned at the Agency Roundtable was Google Shopping Express, a new delivery service in which couriers will pick up products directly from the store and deliver them to the customer.

In order to provide the best product content in these different formats, retailers must optimize their data feeds, and that’s where CI comes in.

Channel Intelligence: “Content Should Be Your New Strategy”

This motto describes CI’s role in a nutshell.  By optimizing product content in data feeds, CI provides the best experience for users on all platforms that utilize data feeds.  CI improves data feeds using a three-step process:

1)     Analysis of retailer’s file

2)     Rules-based optimization

3)     Fill the gaps

In total, CI uses 35 different processes to clean up retailers’ feeds.  Here are a few examples:

  • Product titles: Often retailers submit product titles that are vague, misleading, or contain terms with a low search volume.  For example, “bulldozer” has a much higher search volume than “tractor”, so CI will replace all instances of “tractor” with “bulldozer” in the product title
  • Colors: Many retailers will provide data feeds with highly specific colors than no one really searches.  CI will streamline the colors, for instance replacing “elephant” with “gray”, “mocha” with “brown”, etc.
  • Missing categories: Many retailers leave out entire columns in the data feed.  CI will fill in the gaps to ensure the best possible product targeting

In total, it takes CI around 15 days to clean up a data feed before it is ready for launch.  In addition to optimizing data feeds, CI also manages bids and budgets for retailers’ PLA campaigns.  Dynamic SKU-level bidding is used to maximize ROAS while staying within budget, bidding higher on individual products which have historically performed better and lower on products which haven’t been performing well.  Now that Google has acquired CI, agencies will have easier access to these services. Google even discussed the possibility of integrating CI’s bidding strategies into DoubleClick Search.

How Should Google Offer CI’s Services?

Google is considering three different ways to offer CI’s services to agencies:

1) Data optimization service

  • CI will only optimize the data feed
  • The agency will manage bids and budgets, and communicate with the client

2) Full white-label service

  • CI will optimize the data feed and manage bids and budgets
  • The agency will communicate with the client

3) Referral service

  • CI will optimize the data feed, manage bids and budgets, and communicate with the client
  • The agency will only refer the client to CI

Everyone at the roundtable agreed that either option 1 or 2 would be the best option.  While some agencies felt more comfortable having control over bids and budgets, others were okay with the idea of CI managing bids and budgets for their clients’ PLAs.  What do you think? Which option for using CI’s services would your agency prefer?  Please let us know in the comments section below!

Whichever way Google decides to offer CI’s services, it is clear that agencies will see a marked increase in PLA performance with CI’s data feed expertise.  Google plans to roll out CI’s services to agencies within the next 6 weeks, so stay tuned to find out how this acquisition pans out!

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