Google makes product listings free on its Shopping service as it takes on Amazon
Google will allow brands to post product listings on its shopping service for free starting next week, as the search giant bids to become more competitive with e-commerce juggernaut Amazon. Previously, the search giant required brands to pay for the listings per click.
The move, announced Tuesday, does not mean paid ads on the service are going away, however. Google will still charge for ads that appear above and below the listings, which are shown under Google's “Shopping” tab. Brands can also buy product ads that appear on the main Google search page.
Google does not provide revenue breakouts for Shopping, but earlier this year, it said search was a $98 billion business in 2019. Digital agency Merkle, which specializes in search marketing, estimates that Goolge's shopping ads business accounts for $20 billion annually.
Google’s decision arrives as retailers struggle to move merchandise and as marketers scale back ad spend on search during the coronavirus outbreak. In a corporate blog post, Bill Ready, Google's president for commerce, positioned the move as a way to help merchants that are depending more on ecommerce with their physical stores shut down during the pandemic.
But the move is also aimed at boosting Google's competitiveness with Amazon, suggests Matthew Mierzejewski, senior VP of search capability lead at Merkle, a digital agency specializing in search. "Amazon’s marketplace dominates product-based search because of their abundance of sellers and product variations,” Mierzejewski says. “With Google’s addition of free product listings, it now has the ability to increase product and seller assortment, which is advantageous to the consumer.”
Two-thirds of consumers start their search for products on Amazon, and nearly all (95 percent) are satisfied with the results, according to a 2019 report from Feedvisor.
Mierzejewski adds that Google’s move to make product listings free makes its search engine results more shoppable, which allows it to better compete with Amazon for bottom-of-funnel buyers, meaning those who are close to making purchase decisions. “If Google succeeds at increasing the value of its Shopping product, a byproduct would be greater traffic and queries on Google, pulling product-based query share directly away from Amazon,” he says.
It remains unclear how Google will prioritize the display of the product listings in search results in the Google Shopping tab now that they are free. But it's likely the company will adhere to its ethos of making its search experience both fast and efficient, says Kevin Lee, exec chairman and co-founder of Didit, a full-service digital agency that specializes in search.
“This move allows for the best results to live in the Shopping tab, not just the most active advertisers,” Lee says. “Consumers want the best results, unbiased by payment for ads. It’s quite possible [the changes] resulted in a superior user experience when engaging with Shopping.”
Google on Tuesday also announced it is working with PayPal so merchants can more easily sell and manage goods through Shopping. Lee suggests the move may result in a future deal between the two. “The key to great relevance and great ad targeting long term is knowing the purchase behavior,” Lee says. “And Google never made the inroads in their payment group that provides that rich data stream.”