Retailers will soon have to start paying to use the Google Shopping platform - but is it worth it?
This month, Google has announced it is to change its Google Shopping platform to a commercial model, meaning retailers will need to pay for product listings.
With the change scheduled to take place in June, many businesses are now investigating the worth of this platform to them and the potential impact of not being on it. Hedley Aylott, chief executive and co-founder of multichannel retail consultancy Summit, explains how this change will affect retailers: “For the retailer, all of the free traffic currently received through Google Shopping will stop, and only continue if their product data feed is linked to a Google AdWords account. Retailers will now need to purchase Product Listing Ads, which are search ads that include more information than normal, such as a product image, price, and the merchant’s name.”
Aylott says the aim of this new initiative is to improve the shopping experience, product search, and the ability to compare different products. However, James Gurd, owner of etail agency Digital Juggler, thinks that while the move makes sense for Google from a commercial perspective, it might not be providing the best service to the consumer: “The PR pitch is that it encourages the highest-quality retailers to shine as they will invest to make the data feeds and product placement as good as possible. I don’t buy that. What it does is put merchants who have large media budgets in a more powerful position as they can aggressively bid for key products and price out businesses with lower budgets.”
As Gurd highlights, Google Shopping now risks becoming a platform for the big retailers, making it impossible for smaller businesses to compete.
Footwear retailer Schuh has campaigns set up on the platform and is currently testing the new feature. Clair Masson, digital marketing manager at Schuh, says: “In this climate, can we really afford to walk away from sales?”
Martin Newman, chief executive of etail consultancy Practicology, agrees that the change targets the “big boys”. He says: “As with many of Google’s recent moves, it favours established brands with deep pockets over small online shops.”
Businesses of all sizes will need to weigh up the importance of yet another paid platform to their traffic and sales figures. Newman says: “It comes down to the retailer’s strategy and whether they are optimising for profit or for volume. Just like having a storefront on Amazon or running an affiliate programme, a decision has to be made (backed up by data) that the sacrificed margin is justified by the increased sales.”
For retailers wanting to test this platform, Google is offering a £75 credit for all new accounts set up in AdWords before April 15 and a 10% monthly credit until the end of June. This will give businesses a chance to test the platform and the traffic and sales it drives.
However, Gurd says this should only be done if a retailer has the resources to fully analyse results: “It pays to test the waters, learn from results, optimise the bidding strategy, then scale to drive revenue.
“If you don’t have the skills or time to manage this properly, then your return on investment is compromised and your time is better spent driving performance through other core channels,” he says.