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Google Adds Merchant Ratings to AdWords

Yesterday, Google announced a new feature to AdWords that could have a big impact on both e-retail and brand advertisers.

Merchant star ratings from Google Products will now be displayed under the advertiser’s URL.  Here is an example:

[1]

Clicking on the link to the 1,967 reviews takes the user to the merchant’s page on Google Products:

[2]

Google has given Sierra Trading Post a merchant rating of 4.7 out of 5.  Google calculates a merchant’s rating based on an aggregated collection of reviews from a variety of sources including re-sellers, product comparison sites, review aggregators, and Google checkout.

Merchant ratings could become an important differentiator on non-brand keywords or searches for popular items.  For example, this search for [computers] puts Dell and HP at the top and both have a rating of four stars.  Could a consumer be influenced by the fact that Dell has 6,000 reviews compared to 760 for HP?:

[3]

Some important points about this new feature which Google is referring to as “seller rating extensions [4]” as outlined in the AdWords blog announcement:

This could be a great opportunity for online retailers to leverage their positive customer sentiment and stand out from the crowd.  Beyond what Google outlined in their blog post, there are some subtle nuances to be aware of:

Since this a very new product that we have little control over, we are still developing our best practices and, most importantly, we are monitoring our data to gauge the impact.  Here are some tips to consider in evaluating it for your campaigns:

While this is an exciting change with great potential, we do have some concerns:

My first thought was that this new feature would improve CTR for retailers with high ratings and lots of reviews.  But it could end up reducing CTR by diverting traffic to the review page rather than our landing page.  Will those customers ever come back?

What effect do you think this will have on your accounts?  For online retailers with positive ratings, do you think this will improve CTR and conversion rate? Or just get lost in the even-more cluttered search results page.