You may remember that in late June it was announced that Google had been hit with a £2.1bn fine from the European Commission. This was after ruling that the firm was abusing its position by promoting Google Shopping results exclusively at the top of search results pages, and ignoring other product comparison sites such as Shopzilla & Kelkoo.
At the time, Google swiftly announced it was considering an appeal, but ultimately was given 90 days to end this ‘anti-competitive’ practice or face further penalties.
This week marked the end of that 90-day period and with it came an announcement from Google that, moving forward, other comparison sites would be eligible to show shopping ads alongside Google’s own on the search results page. This applies only to searches within EEA countries - which of course includes the UK.
The first live example we came across was a search for ‘toasters’, and below you can see a product ad from Kelkoo sitting alongside ads from Google Shopping.
There is a further behind-the-scenes change that will see Google Shopping operate as its own business, separate to Google itself. In effect, Google Shopping will operate on a level playing field with other product comparison sites when it comes to accessing the available product ad space on Google search results pages.
What does it mean for users?
Users may in theory begin to see a wider range of retailers on the search results page.
If there are retailers that currently do not advertise through Google Shopping but do advertise on other product comparison sites then they will move from a position of never showing on Google searches to one where they are eligible to show a product ad on the main page.
With that said, being that Google Shopping was already so big compared to other product comparison sites it seems likely that most retailers who advertise through other sites already had a presence on Google Shopping anyway.
In this respect, although the company supplying the ad may change, it is likely users will largely see the products in the Shopping ad space.
It’s worth noting at this point that any product comparison sites signing up to show ads through Google searches will need to comply with all the usual Shopping ads policies and product data specifications. This should ensure that any non-Google Shopping ads will still be of suitable quality for the user.
In addition, this will make site user experience and CRO become more important. If visitors hit a brand's website via a shopping ad, and the experience is poor, they may flick back to the shopping results, pick a Kelkoo ad for example, and then purchase through there. This is harmful to the brand as direct sales will be lost.
What does it mean for advertisers?
It is tempting at first to suggest that Google Shopping impressions will decrease to make way for other comparison site’s listings, and we can certainly see this happening in the short term. However, Shopping impressions have consistently been on the rise as Google dedicates more space to the ad format on both desktop and mobile.
This increase is set to continue in to 2018 and so in the medium to long term we don’t anticipate that Google Shopping impressions will decrease at all, but perhaps the rate of increase will slow as more of these ‘new’ impressions are handed to other product comparison sites.
In addition, any move that adds more competition into the market is likely to mean higher top-end CPCs, and we expect this to be the case. With that said, if advertisers are bidding appropriately they should not be paying CPCs above the profitable amount and, so while we may see some increase, we shouldn’t expect those CPCs to inflate to an outrageous level.
So, for current Google Shopping campaigns, perhaps after seeing some initial unpredictable performance in terms of impressions and CPCs, we should then see this level out in the coming months.
Whilst we’re pretty confident that Google Shopping campaigns will perform similarly in the long term, what this does create is an obvious opportunity for retailers who have never used any other product comparison site to begin to do so and see how this performs for them.
If you’d like to learn more about this change, please get in touch.