How Google’s Product Listing Ads Are Hurting Home Remodelers

Google giveth. And Google taketh away. This is especially true for local remodelers and home improvement companies trying to drive leads on the Internet. Unfortunately, these small businesses have been on the wrong end of Google innovation, particularly when it comes to the Search Results Pages (SERPs) and Google’s Product Listing Ads (PLAs).

Less than 18 months ago, paid search ads dominated the SERPs for home improvement companies who remodel kitchens, install bath tub units, hang new gutters and the like. These local and regional businesses make their living by going into the home, selling the homeowner, then installing their particular product or service.

Anyone advertising on the AdWords side could expect a reasonable volume of click-throughs, then calls and leads.

At least until PLAs started to get significant placement on the SERPs. See an example below on the term “walk in tubs”. This is an “Above the Fold” screenshot from my laptop:

In this particular instance, the PLAs have replaced what would have been AdWords positions 4-7 on the results page – all ads that would have appeared before a user had to scroll further down. This placement has serious consequences for local home improvement and remodeling companies — and doesn’t really honor the true intent of a search query.

Local Remodelers Can’t Participate in PLAs
Most remodelers can’t participate in PLAs because their products and services have custom pricing – based on the individual home that a new walk-in tub would have to be installed in. There are dozens of factors that would alter price: tub configuration, plumbing considerations, bathroom layout, ease of delivering the tub and so on.

In the case of home improvement companies, the true nature of their services — and the true nature of the product itself — doesn’t allow for simple black-and-white pricing.

But without a price, local remodelers are squeezed out of PLAs – leaving that valuable real estate to e-tailers and national brands. The old paid search positions 4-7 that used to be so productive for remodelers have to be conceded to national players with ecommerce capabilities.

PLAs Don’t Tell the Whole Story
Then there’s consequence number two for the home improvement company: unreasonable pricing that plagues PLAs in the home improvement space. Again, let’s go to the walk-in tubs example.

You can see prices anywhere from $1,999-$5,383 for a walk-in tub. And while anyone can price their product as they see fit, PLAs don’t give homeowners a true picture of what the final installed product will cost.

For instance, you can go online and buy a tub directly for the listed price. But that’s only half the story. A tub needs to be shipped — for several hundred dollars at minimum. And that only gets the tub to the front lawn. Then it needs to be brought into the home. Existing plumbing has to be reconfigured. A tub or shower may need to be removed or renovated to make space. The unit needs to be assembled. Building permits may need to be pulled. The final product may need to be inspected. And a warranty needs to be in place.

Even a budget walk-in tub job from a reputable remodeler can cost more than $10,000. Yet PLAs are telling consumers that these tubs can be had for a fraction of that cost. It has the net effect of price conditioning the homeowner to expect the lowest cost tub – while hiding all of the work and expense that is critical to using the product properly.

Now, I don’t consider Google to have bad intentions with its PLAs. But, at best, its positioning of many popular home improvement products is misleading. At worst, it’s misinforming the all-important users, generating poor outcomes all around.

I recently brought this issue to the Google PLA team and asked for their thoughts. To paraphrase, their response was, “Our algorithm decides which searches will show PLAs. If users respond, the PLAs will continue to show.”

I’m a big believer in most algorithmic decision-making, but this is a bit disheartening for small businesses who advertise on Google already, who can’t possibly compete against what is ultimately fictional pricing.

Effective Paid Ads Cost More
The final consequence for remodelers is that the importance of the top three paid search ads skyrockets when PLAs show up in the SERP. With paid search ads in the old 4-7 slots now pushed down the page, below the fold, click-through rates on those ads have plummeted.

It’s simple on-page geography. When a PLA shows, the user has to scroll down past the initial screen to see ads 4-7. In reality, ads 4-7 are in what used to be ad slots 8-11. Their click-through rates are often significantly less than one percent. For most advertisers, that kind of attention is meaningless.

This leaves only the prime, most expensive 1-3 AdWords spots at the top of the page for local remodelers. PLAs are having the (perhaps) not-so-ancillary effect of increasing the cost per click for those top-of-the-page advertisers.

For most remodelers, who are small business owners often operating in a 25-50 mile radius of their offices, this doesn’t leave much room for error. There are only two to three spots at the top of any search results page, where the largest percentage of active buyers click. Being able to capitalize in that space is expensive, and even small mistakes can blow a budget out of the water – while handing leads to competitors.

To be clear, I’m not saying that Google should eliminate PLAs from their SERPs for all home improvement products. And Google has done tremendous work for local businesses through its local 8 packs further down in the organic listings.

But in the name of a strong user experience and a better advertiser experience, Google’s PLA algorithm could be adjusted to better reflect the reality of the homeowner, their search query’s intent, and the local remodeling company who is best suited to help Google’s users.

Todd Bairstow is the Founder and a Partner at Keyword Connects, which specializes in online lead generation for remodelers and home services companies across the country. He is a popular writer and speaker for the home improvement industry and writes a blog that speaks to all things internet- and home improvement-related.