SEO Positive considers the impact of Google’s new shopping model

Online businesses worldwide are currently reeling from the recent news that Google’s Shopping search engine will no longer allow retailers to list their products free of charge.

Sameer Samat, VP of Product Management for Google Shopping, announced the news via the official Google blog at the end of May this year, striking fear into the hearts of paid search advertisers everywhere as the prospect of losing yet another source of free search engine exposure hits home.

Businesses will soon need to create official Product Listing Ads, most likely within their Google Adwords accounts, to ensure their products appear in shopping search results. There’s no knowing exactly when the changes will come into place outside of the US and further details are sketchy at best, news which concerns marketers eager to stay one step ahead of the game.

Announced in 2002 and first known to users as Froogle, Google’s shopping platform was then renamed ‘Google Product Search’ in 2007 in a bid to rebrand the concept and avoid translational issues. Used by millions of merchants worldwide, the service was an undeniable hit with online businesses looking to advertise to mass audiences for free (aside from labour costs incurred from creating and uploading products and their descriptions).

Around 96% of Google’s revenue is generated from advertising, so unsurprisingly many industry insiders are questioning the motives behind the announcement. The monetisation of another of Google’s well-worn advertising platforms has led to much discussion and debate amongst UK PPC marketing professionals, most of which are considering whether this will have a largely negative impact on the relevancy of the returned results and the actual choice of products presented to users.

In response, Google representatives insist that ranking results will be based on a ‘combination of relevance and bid price’, which could potentially mean it could also push down lower priced products in favour of ads that have been paid for. The question is, does this in turn compromise the representation of each company’s offerings?

Developments such as these are seen by many to dramatically influence the historical purpose of a search engine; ie, to return the most relevant and the most useful results without the inevitable bias generated by a largely undisclosed paid advertising concept. Many SEO and PPC experts have criticised the move for potentially allowing larger Ecommerce corporations to push smaller online stores out of the equation, as these companies can typically allocate less of their budget towards online marketing. Do these businesses have the time and resources to trawl through their existing listings and update them so they fall in line with the criteria of Product Listings ads? They will need to delegate staff to this task on an on-going basis if they are to continue to see worthwhile conversions from the platform. They will also need to reassess several crucial budgeting factors to make sure they’re generating a strong ROI – something many SMEs simply aren’t in a position to do in the current economic climate.

Ben Austin, Managing Director at Essex-based digital marketing agency SEO Positive, believes that businesses and consumers alike should not underestimate the impact of the changes on the buying process online.

“Fundamentally, the original concept is being transformed into a comparison shopping engine, which is going to hit many advertisers hard, especially smaller companies. We’d highly suggest that businesses start preparing for the changes well in advance, as the transition is expected to disrupt retail budgets considerably.”

According to Samat, new ad formats will be clearly displayed as ‘sponsored’ to avoid any confusion, but many believe this simply won’t be the case. One established SEO journalist has even written a letter of complaint to the Federal Trade Commission referring to the shady way in which Google discloses its paid listings. In his text, Danny Sullivan, the editor of renowned blogging hub Search Engine Land, points out Google’s attempts to re-write the standard definition of paid inclusion, a practice that allows companies to pay for their listing to appear alongside the organic search results.       

It must be noted, however, that some Pay Per Click marketers are placing a more positive spin on the news and remain of the opinion that the model will allow them to better monitor the effectiveness of their ads within certain categories and create accurate reports detailing their conversion rates. These can then be used to fuel future optimisation strategies to improve the performance of their campaigns overall. Our verdict? As with any development from Google, only time will really tell whether Shopping will pave the way for a better retail experience. All we can hope is that the platform is managed ethically and responsibly and results in higher quality data for all involved.