Google converts paid ads into free listings on home page
Google is converting paid ads from its search results page to free product listings, a move that takes direct aim at other e-commerce juggernauts such as Amazon. Previously, retailers had to pay for the listings per click.
The free listings will appear in a product knowledge panel that shows buying options for a particular item, such as the tea kettle example below. Previously, these listings were all paid. Paid advertisements on Google’s home page—such as Product Listing Ads—aren’t going away, either. The company says the switch will take place this summer on mobile, adding that it will later apply the changes to desktop.
Bill Ready, president of commerce at Google, told Ad Age that the company's decision is aimed at “democratizing access” for online merchants.
“We want to make sure we’re helping expand access to digital commerce to merchants of all sizes,” says Ready, who previously served as PayPal's chief operating officer. “Larger merchants can make valuable inventory that was previously sitting on their shelves more accessible. And small businesses can better compete in the world of e-commerce.”
Offering free listings on Google’s most popular web page will attract more merchants, which in turn will increase its product and seller assortment, says Ready. It will also provide Google with equal footing in competing with other e-commerce powerhouses such as Amazon—which is where two-thirds of consumers start their searches for products, according to a 2019 report from Feedvisor.
The company says it will make similar announcements to other parts of its platform in the near future. “As a merchant provides their listings, we want to give them one integration in our merchant center and with that one integration they can access different surfaces across Google,” Ready says. “We think there is more opportunity for those sellers to access all the surfaces of Google. That is where we are headed directionally.”
The search giant’s decision builds on a previous effort to make product listings on the Google Shopping tab mostly free. Ready says that decision led to a 70 percent increase in clicks and a 130 percent increase in impressions across both free listings and ads on the Shopping tab. “It boils down to more people finding more of the things they need, from a broader set of sellers and a broader set of inventory that’s available to them,” Ready says in regards to the figures.
Google earlier this year said search was a $98 billion business in 2019 and of that, roughly $20 billion is the result of shopping ads, according to estimates from digital agency Merkle.