Google Shopping – the beginning of the end or a new opportunity for retailers

Posted: Friday 20th July 2012 in Paid Media, Thought Leadership.

Google Shopping

Google’s VP of Product Management in the USA recently announced that clients will soon have to pay to have their products listed on Google Shopping, where it had previously been free. 

This will be based upon Product Listing Ads, which are already a promotional option within Google Adwords. There is no firm date at the moment as to when this will be launched in the US but Google are persuading users in the USA to set up Product Listings Ads by 15th August 2012 with a 10% monthly credit incentive, with launch scheduled for the Autumn. It is unknown as to when this will be rolled out to UK, but if trends are anything to go by UK will be one of the first markets outside of USA where this will take place.  We believe this will be in early 2013 following retails peak period. As stated above, Google are initially using credit incentives to persuade Merchants to move to the new model and providing step-by-step guides on setting up Product Listing Ads.

There are some clear positives and negatives regarding this change. On the plus side it will give more visibility into what factors will increase a retailers market share, thereby increasing the chance of driving sales and revenue through the channel. This however comes at a cost. Currently comparison shopping on Google is often being used to offset retailers overall Return on Investment targets, meaning more budget can be allocated to other channels including paid search. The move to a paid for inclusion model will no doubt see retailers reappraising their position, with budgets being decreased from Google Adwords paid search activity or retailers ceasing Google Shopping activity.

Summit will work closely with our retail clients and Google to ensure that there is a smooth transition, whilst developing a management approach to Google Shopping in line with our best practices for paid search and product feed management. Summit will also be providing clear strategic direction as to how this move will impact on how clients should spend their marketing budgets. We will also be actively monitoring the changes to the USA market, to understand how this affects our USA counterparts.