Just last month, Google announced a major change to their online product listings through Google Product Search. Instead of providing a free feed for online retailers to showcase their goods, Google is moving to a strictly paid version of Google Shopping. This means that online retailers who previously used Google Merchant Center to advertise and list their items online through Google must now be prepared to play the AdWords game — bidding and keyword relevance will determine where items will be shown in the product lineup (or if they will be shown at all).

Without knowing precisely how the new algorithm will play out for Google Shopping, online merchants who want to stay in the game will need to make some tough choices when deciding how much of their marketing budget to devote to this new channel.

Areas to Assess

Google is adding some incentives for merchants to stay with the Google Shopping experience —  namely credits to Product Listing Ads. For those who get started by August 15, 2012, Google is offering credits based on total ad spend as well as additional credit if users fill out a form. Google also anticipates being able to ad special sales and other display options over time. However, the decision about whether it makes sense to continue using Google Shopping (with or without incentives) should be based on several areas:

Current Performance

Google Merchant Center offers several ways to track performance. If you haven’t set up conversion funnel testing based on your listings in Google Product Search, you can still take a look on the performance tab to see how many clicks you’ve gotten for each product listing. If you are seeing a solid response to your listings, then continuing with ads may make sense. You’ll also want to look at your current SEM performance to decide how well Google’s new Shopping experience will stack up.

Potential Competition

While competition plays a role in determining any marketing initiative, this area takes on new prominence when paid listings are involved. Now is the time to do the research on what your competitors are doing with their product listings. Also, expect big brands to spend money on Google Shopping from the very beginning, so if you are up against larger corporations, you’ll want to figure out a keyword strategy that will let you compete.

Ability to Improve

This is also the time to consider any weak spots in your own product listings and how much work it will be to bring your product listings and landing pages up to speed. Is your company going to have the resources to create, maintain, and optimize product search listings in a way that is cost effective? If the time spent developing your Google Shopping experience means that you’ll need to charge more in order to turn a profit, you’ll need to know sooner rather than later.

Estimated ROI

The bottom line is, you need to be able to turn a profit with these new features, even when the incentives run out. Careful planning and evaluations now will give you the edge over your competition when the time comes to implement. Be ready to test, evaluate, and make changes from the very start of the program, if you want the best results.

Sound Off: Do you use Google Merchant Center? If you do, are you willing to pay for your listings once Google Shopping is fully online?