Google unveiled a revamped shopping service, Google Shopping, in the fall that ranks product listings in part by the amount vendors bid for them to be listed.
This recent change to increase revenue seems to call into question Google’s strong reputation as an unbiased source of online information, however, and some of Google’s competitors have wasted no time in pointing out the shift to favoring paid inclusion over free opt-in results.
To clarify some of the confusion over the Google Shopping tool and recent criticism, we’ve decided to take a closer look at Google Shopping and its positives and negatives for shoppers and sellers alike.
What Exactly Did Google Do?
After announcing in May that it would be retooling its old shopping marketplace, known as Google Product Search or simply Google Products, to transform it from a free, all-access, all-inclusive forum into a pay-to-be-listed shopping site, the switch officially took place in October. Where merchants could once list their wares under the “Product Search” section of Google for free, with sponsored and labeled ads adjacent to them, all vendors must now pay to have their goods included in the Google Shopping engine, with Google ranking these listings by how much a vendor has paid to be there.
While products can still be listed for free under a general Google Web search, vendors must now pay a fee to become a part of the Google Shopping marketplace. As Reuters states, the new structure may ultimately prove much more profitable for Google, whose retail advertisers make up around 40% of its advertising base.
Some in the industry, particularly competing search engine Bing, have been quick to criticize what appears to be a break from Google’s previous unbiased search standards, with Bing launching a campaign against the new tool last month.
Bing’s “Scroogled” campaign claims that Google Shopping doesn’t necessarily offer consumers the best deals, but rather showcases whatever merchant was willing to pay big bucks to be listed first.
The campaign’s site even lists quotes from Google’s founders over the years explaining how payment had not been a factor in their search results (from 2004), followed by their announcement this year of the new Shopping model – seemingly contradictory quotes taken from nearly a decade apart.
As a CNN Tech report points out, however, Bing also accepts paid listings from vendors in its Shopping section, although it does not rank items by how much vendors paid. The report also reveals that shoppers on Google can get past the paid rankings by choosing to sort items by price or review score, rather than by “relevance,” for a more unbiased search.
Though the shift from free service to ranked ad forum has been a main focal point of the Google Shopping transition, the addition of new features and “shopping tools” is what Google hopes will set their service apart from those of other retail aggregators.
For the holiday season, Google Shopping features a spread of various retail catalogs for visitors to peruse, as well as listing some “must-have gifts” near the bottom of the screen. Google Offers is another new feature – a Groupon-esque deals forum available on-site that can also be customized and sent to subscribers’ inboxes. According to ECommerceBytes.com, shoppers can also view special deals or promotions being offered by retailers while shopping on Google. Offers can then be redeemed on retailers’ websites.
3-D has come into play for the holidays as well, with a new 360-degree swivel feature giving shoppers an all-around view of featured toys. Google plans to expand this tool to more items in the near future, so expect this tool to stick around through the after-Christmas sales and beyond.
The site is also banking heavily on the power of connectivity to entice shoppers, with features like shared reviews and “shortlists” enlisting shoppers’ friends to make the experience more social, all the while increasing exposure to its ads. ECommerceBytes explains that users who are signed in to their Google accounts can find reviews on products written by people they know, as well as write their own reviews, which can then be posted on a user’s Google Plus stream, essentially serving as free advertising.
The new “shortlist” tool acts as a bookmark of sorts for shoppers, who can save items directly in their Google Shopping accounts, make notes about the products while deciding whether to purchase, and then share their lists with friends. Products found outside of the Google Shopping forum can also be bookmarked within a user’s shortlist.
Google as an Online Retailer
With the implementation of all these changes, Google has partially transformed itself from a search engine with some ads to a viable online retail aggregator in the vein of longtime retail giant Amazon. The jump into e-commerce may come as a reaction to increased use of sites like Amazon by shoppers looking to start their product searches, rather than starting with search engines.
According to the New York Times, as of last year, nearly a third of online shoppers started their research with Amazon, compared with just 13% starting with a search engine like Google. The impetus for Google to alter its shopping forum is clear, but the move may alienate some retailers, particularly smaller ones who cannot afford high enough bids to stay competitive on Google Shopping.
But it’s still somewhat unclear exactly how Google’s new feature will affect other e-commerce sites. As theorized on Reuters, some smaller retailers choose not to list their products on Google Shopping because of the prices, and may instead list on Amazon, where listings are automatically sorted by the price of the product rather than by the price of the listing. Amazon, which once used Google Product Search for its listings, has pulled out of Google Shopping.
At present, however, there is some significant industry sentiment that while paying for inclusion is aggravating, the alternative – being left out – is worse. “Merchants who market via (Google Shopping) know that consumers using Google Shopping are generally looking for specific items that are often supplied by many retailers,” says Nate Lipton, owner of Growers House, a family-owned and -operated indoor gardening center and hydroponics supplier.
While comparison shopping makes for tough competition among retailers, exclusion from Google Shopping might mean ceding sales to rival stores. While Amazon may have enough of a stand-alone reputation to ignore Google Shopping, many other small businesses cannot.
So What Should Small Online Businesses Do?
Immediately discounting paying for listing on Google Shopping may be a mistake. “The Google audience has demonstrated their willingness to buy online, Google is the most visited website in the world, and targeting can let you manage Google Shopping marketing profitably,” says Mike Effle, CEO of SingleFeed, a Google Shopping partner for data feed management.
Ted Sindzinski, co-founder of Giftery.me, a gift list sharing website, agrees that smart targeting makes all the difference. “Being included means paying but with less stores in the mix now and only paying when a click actually happens, savvy marketers can increase their reach at a very profitable rate that can be scaled up, and down, quickly. This requires keeping a close eye on return, both immediate and long-term, to insure the costs add up but it’s a sure fire way to get seen,” says Sindzinski.
Good targeting also allows online retailers to adjust quickly in response to changing customer attitudes toward Google Shopping. If shoppers increasingly turn away from Google Shopping, as Bing hopes, marketers can adjust core strategy appropriately and spend less time and energy devoted to keeping up Google feeds.
But if Google’s reputation, vaunted position in the industry and tech edge with tools such as shortlists allow it to win the comparison-shopping battle, small businesses that have been paying attention will be better-positioned to pour resources into Google Shopping and take advantage of Google’s insights into consumer behavior.
More Expert Opinions
We turned to some more experts in the field to answer a few more questions. Here’s what they had to say:
George Fox, Marketing coordinator for MainMerch, a company that operates websites that sell branded merchandises such as WearYourBeer.com, on why paid inclusion makes more sense for shopping than regular search results:
“For searchers that are looking for information or some other piece of content/media, the organic results are typically the best results, but when thinking about shopping, there’s a lot more than the contents of a page and the external links pointing to that page that factor into deciding the best result for the searcher. There’s still a fair amount of reluctance in some areas of the country, and likely other places around the world, to purchase things online. By requiring merchants to pay for the ads, Google is taking another step to make sure that when a searcher appears to be making a transactional search, the results they get are made up of the most legitimate businesses. This is of course assuming that businesses that have fair sized advertising budgets are also responsible and, therefore, legitimate. This is pretty important when you’re looking to put your credit card number into an unknown website.”
Tony Ellison, CEO of Shoplet.com, an e-commerce seller of office and business supplies, on what other factors besides fees affect inclusion rankings and what this means for businesses with quality listings:
“The new Google Shopping experience functions like traditional CSEs (comparison shopping engines) such as Nextag, and continues to provide consumers with opt-in merchant results based on merchant popularity and keyword relevance, but has added a monetary component, which influences, to an undisclosed degree, the placement of merchant listings within query results. This means that merchants with a high “quality score” (a combination of product feed quality, number of products submitted to Google in the feed, how frequently the merchant’s listings are clicked on, and how often these clicks lead to a purchase) could, hypothetically, bid less money for a higher listing position. This motivates merchants to enhance the quality of their product feeds in order to compete with one another’s quality score, but does not eliminate the possibility for new players to pay in order to be competitive within the CSE.”
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