Sabina Warren, Sr. Product Marketing Manager @ Kenshoo
Recently, Google announced on its blog that it is opening up the doors to Google Shopping for U.S. retailers to list products for free.
In the post, It’s now free to sell on Google, Google’s Commerce President, Bill Ready explains:
“For retailers, this change means free exposure to millions of people who come to Google every day for their shopping needs. For shoppers, it means more products from more stores, discoverable through the Google Shopping tab. For advertisers, this means paid campaigns can now be augmented with free listings. If you’re an existing user of Merchant Center and Shopping ads, you don’t have to do anything to take advantage of the free listings, and for new users of Merchant Center, we’ll continue working to streamline the onboarding process over the coming weeks and months.”’
The post continues to position this huge change as a way for struggling retailers to reach consumers who are increasingly shopping online.
So what does this mean for paid Shopping ads? In the Google Merchant help section article linked to from the post, Google clarifies that paid listings will remain.
“Just as we don’t charge sites to be part of the Google Search index, listings for participating retailers are eligible to appear in these results at no cost to them. Paid listings will continue to appear in ad slots and will operate in the same way as Shopping Ads do today.”
No one can see the future, but there are a few potential outcomes that seem very likely from this move.
Whenever a marketplace offers more selection, the supply/demand rules swing in favor of consumers. Free Shopping listings will bring in more retailers, more retailers mean more selection, and more selection means more competitive pricing. With competitive pricing and more selection, more consumers will begin using Google Shopping.
The main outcome of this move will be that the Google Shopping ecosystem will grow as a “first-stop” marketplace with more retailers and more consumers. This will drive up the value of Google Shopping and that will attract even more retailers and consumers.
If there’s one area that Google has proven to be the best in the world, it’s “organizing the world’s information.” Google Shopping should become one of the premier shopping channels online for U.S. shoppers in a relatively short period of time.
Certainly, non-essential businesses with physical locations are in a very tough spot right now. Not only could Google Shopping help to drive the immediate bottom-line but as more businesses get comfortable with the ins and outs of online commerce, it could lower the barrier for them to continue on to digital advertising such as Google Ads. This could lead to even more sales and usher in a new era of SMB marketing for the vast majority who have yet to adopt online marketing channels.
For smaller retailers with smaller marketing budgets, Google Shopping’s pay-to-play model might have been just too expensive for them. With Google Shopping listings free, there might be millions of small and medium businesses in the U.S. that could take advantage of this opportunity.
Chances are, the Google Shopping free listing engine will rank products in a similar fashion as Google Search ranks pages. There will be an emphasis on quality, domain authority, and a long list of organic ranking factors that make up the algorithm. It might even take some cues from Amazon’s book to include factors such as reviews, shipping speed, % of in-stock items, etc.
Search marketers generally need to balance the mix between organic and paid search, so this approach will most likely spill over to Shopping. Just as a new flavor of SEO was borne from YouTube and getting videos to the top of that search engine, SEOers will have a new discipline to figure out. In the short term, that means gaps which the savviest will be able to exploit to their advantage. Over time, the best practices will become democratized and then things will normalize.
While this move will help SMBs, larger advertisers that have been leveraging paid shopping ads for years will suddenly have more market rivals. The price point to entry as well as the complexity of online advertising created enough friction to keep the smaller fish away. Lured in by free Shopping listings, SMBs will flood this online destination hoping to compete with market leaders.
For big advertisers, this will mean they have to raise their game a bit more and really work the channel. Remember, Google said in its statement that Google Shopping will “primarily” be comprised of free listings. That means there will still be ads and those ads will be competing with free listings for consumer attention.
If you are a marketer that has been relying on Google Shopping Ads and have seen great results, chances are that you will need to work a little harder and a little smarter to maintain that level of success.
While Google has always been a goto search engine for product purchases, according to some research, Amazon is fast becoming a popular destination to start product research.
The more upper-funnel product research searches it can facilitate on any of its properties—i.e. Google Search, YouTube, Google Shopping—the more valuable the Google Ads stack is for product companies. By expanding its platform, it may become a more valuable resource for consumers. If it becomes a more valuable resource for consumers, then more consumers will use the platform to research products.
Google is all about signals. With more consumer signals, it can better match ads to consumers. So, in essence, by giving away Shopping for free, it may secure a bigger dataset that it can use to enhance its value proposition as an advertising powerhouse.
Chances are that if you are a major product company, you’ve already been using Google Shopping Ads for some time. On one hand, this move to offering free listings will make Google’s Shopping tab more valuable and draw in more consumers, but on the other, it will mean that you might have to completely restructure your Shopping Ads approach to compete in a busier marketplace.
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