Google to Test New Product Ads on Prize Real-Estate

For years, when people have searched Google.com, they’ve seen standard text ads with no frills attached. While Google sells other sorts of ads on other Web sites, the overall advertising experience on the search results page hasn’t moved beyond snippets like “Free running shoes” when you search for sneakers, for instance.

That may change. Google is launching a test that will show people who search Google.com for products, like shoes and televisions, an entirely different advertising format known as a “product ad,” the company confirmed Friday.

Unlike text ads, product ads will “feature product specific information directly in the ad such as price and product image,” according to the email Google sent some advertisers inviting them to try out the ads this week. Google said that it would continue to work on the most effective format for the ads and that the ads would “complement standard text ads on Google.com.”

A Google spokeswoman said in a statement that the “test will only be visible to a small number of U.S. users” and emphasized that the company was “constantly experimenting with new features.”

It’s an interesting move from the search giant, which is aggressively trying new ad formats as its core search business matures. Google has also been squeezing more ads in more places and on sites like Google Finance, which had once been ad-free.

The new ads also come as Google faces fresh competition from Microsoft’s new search engine Bing, particularly in the area of online shopping. Bing is going after online shoppers — and the advertisers trying to reach them — by surfacing more information for product related searches, like images and prices, than Google’s standard search. It also allows advertisers to participate in a program where Microsoft gives some of the revenue it gets from ads to consumers as cash back on their purchases, an incentive for shoppers to spend more with the retailer.

With the new ads, Google is mixing up its pricing model as well. Unlike Google’s standard search ads, where advertisers generally pay every time users click on their ads, Google will charge advertisers for product ads only when a user makes a purchase. Advertisers set the commission they are willing to pay, and Google decides which products ads to display based on the commission, how well the ad matches a query, and how often people click on the ads, among other things.

To participate in the service, retailers must submit a feed of their products through an existing service called Google Base, which is Google’s version of a classified listings service.