Is Google Shopping Good For Your Business?By: Chris Crum - September 29, 2012
Google Product Search officially becomes Google Shopping starting in October (which begins Monday), as Google completes the transition it announced in May. This means Google will move to a full paid inclusion model for product results. Merchants will no longer be able to have their products listed for free. This has been the subject of a great deal of controversy in the ecommerce world.
Some opponents claim it will hurt consumers. Some claim it will hurt businesses and competition. Google thinks it’s best for everybody.
Where do you come down on the argument? Is this a good move by Google or a bad one? Share your thoughts in the comments.
There’s a good chance you’re already seeing the new Google Shopping results in action, but we’ve also seen the old style appearing here and there.
This week, we received some comments from TheFind.com, a member of the FairSearch Coalition, which is a group of competitors who frequently speak out against Google’s business practices in order to paint the company in an uncompetitive light.
“As you may know, this Tuesday, October 1, Google will switch to an all-paid search model for shopping and product listings,” a spokesperson for TheFind said in an email. “This is uncharted territory, and at the recent Shop.org conference, it was the #1 topic of conversation among retailers. Now, only retailers who pay for paid listings will turn up in Google’s product search results. Leading marketplaces like Amazon will now be eliminated from product search results — a big blow to consumers.”
This is what TheFind CEO Siva Kumar had to say:
Google’s switch to an all-paid model is likely to confuse many consumers who will no longer see every product for their search, but will instead only see paid placements. It will be interesting to see how Google communicates this change to consumers who have come to trust that search results are a combination of ads and organic results.
This change means that using Google, consumers are no longer able to find the lowest price, nor do an exhaustive search for availability of a product among all retailers. Instead, they will only see the results from the small group of retailers who are paying to be on Google and will likely miss out on deals and availability from other retailers who are not participating.
With this move by Google, consumers lose most because they will end up paying higher prices across the board as retailers are forced to pay higher ad rates to Google. Smaller retailers also lose out when they cannot afford to participate in the pay-to-play model to have product appear.
Regarding how Google “communicates” the change, Google does disclose that it receives compensation for the listings on product search results pages, and includes “sponsored’ when they appear in regular search results.
“I hate to put it like this, but Google is acting kind of like a drug dealer,” Scarpitta said. “They let you try it free, then get people hooked and dependent upon it, and then you are forced to pay in order to survive as normal.”
“It’s a very sad thing,” he added. “Even here at DasCheap! we had to raise some prices in order to compensate for these costs. As so many web users use Google for accurate and instant shopping information, it has become a second nature to search there so we had no choice but to pay if we want to show our discounted items to the masses, otherwise we wouldn’t be able to show our discounted products to online users if we don’t pay. Essentially this forces us to raise prices across the board. So in essence, the finger points back to Google for the raise in retail prices. And even more unfortunate for other online retailers that can’t afford the extra expense will now lose an important revenue stream, that may put some companies in a bad state.”
As I said at the time, I’m not sure about the part about not having a choice. As sites who have relied on Google for the bulk of their traffic in the past have learned upon being hit by algorithm updates, it’s best not to put all of your eggs in one basket, and there are other ways to generate traffic to your site. Of course, that’s not to say that it isn’t a good idea to be found in Google.
Not everyone sees Google’s move as a bad thing for ecommerce. We recently had a conversation with Amit Kumar, CEO of marketing app provider Lexity, who has quite the contrary view.
“We think this is the right direction for merchants and Google,” he said. “While the free Google Product Search program was great for some SMB retailers, in general the results were hit or miss – there was very little predictability on whether products would show up in search results, how often, and detailed statistics were not available.”
“On the other hand, our customers that participated in paid advertising through the Product Listing Ads program have much more visibility into how their products are faring, and have much more control (for instance, the ability to control which products get promoted more aggressively, which products should not be shown in Google’s search results, etc),” he continued.
“In addition, having multiple potential display units showing essentially the same kind of products was very confusing to the users, and also to merchants who were trying to manage their presence on search results,” he said. “Having all of these consolidated into one helps brands manage their presence better, and users get a better shopping experience.”
As you might imagine, Google has a similar stance.
“We believe that having a commercial relationship with merchants will encourage them to keep their product information fresh and up to date,” Sameer Samat, Vice President of Product Management, Google Shopping said when the transition was announced. “Higher quality data—whether it’s accurate prices, the latest offers or product availability—should mean better shopping results for users, which in turn should create higher quality traffic for merchants.”
“When searching for great local restaurants, people want places to eat right there on the results page, not another click or two away. It’s the same with hotels, flight options, directions and shopping,” Samat said.
Either way, the transition will be complete very soon, and merchants who want to appear in Google’s product results will have little choice but to comply with the paid inclusion/product ads model. That’s not to say they do not have a choice in seeking visibility elsewhere.
For those interested in playing by Google’s new rules, you might want to check out these five videos Google has put out about Google Shopping, if you haven’t already done so.
Google recently launched a new set-up flow for Product Listing Ad creation, simplifying the process of those getting started. I’m guessing there will be a fair amount of merchants new to the process.
“The new setup flow provides a step-by-step guide on how to create an AdWords account and set up a Product Listing Ad campaign, as well as how to control when and where your products appear in Google Shopping with bids,” explained Google Shopping product manager Mayuresh Saoji. “You can also view basic campaign reporting through your Merchant Center account.”
A couple weeks ago, Google announced some changes it made for merchants. For one, Trusted Stores annotations now appear on product pages within Google Shopping. Google says this provides merchants with “greater ability to attract new customers” and helps shoppers make more informed decisions. Google also added campaign tracking URL templates that decrease the number of steps required to set up tracking in AdWords.
Are you listing in Google Shopping? Do you plan to? Let us know in the comments.