Hello Google Shopping, Part 3: The Analysis

In Part 1, we covered the old Google Product Shopping, and in Part 2, we reviewed the changes that are taking place in the new Google Shopping. Now, it’s time for some analysis.

So what will come of the new paid inclusion model? Let’s take a look.

The Good and the Bad

Google Shopping pros:

• Better and more trusted product search information — paying for listings gives a merchant a vested interest in providing clean, current, high-quality data.
• Access to timely information such as special deals, sales, or offers, updated within the merchant’s feed.
• Reduced “search fatigue” — fewer merchants will be able to pay to appear in Shopping, which means fewer listings for the consumer to wade through.

Google Shopping cons:

• Merchants will have to find extra room in their advertising budgets to be listed in Google Shopping — collectively, they might have to shell out an additional $130 million per year in the U.S., which puts a strain on big and small companies alike.
• Small e-commerce companies, in particular, could be at a serious disadvantage. For some, the loss of free traffic could mean the difference between staying in business and shuttering (virtual) doors.
• Google says that the new changes will help protect integrity of product data, but how well will paying merchants’ products really be policed? Will the data quality really be that good?

Hmm, something seems funny here

If you’re getting the feeling that the new search model seems like a sudden 180 from the Google you used to know, you’d be correct. For a long period of time, Google was against a commerce-based system, arguing that the very nature of such a thing presented skewed search results. In fact, in a 2004 IPO filing, Google wrote:

“Because we do not charge merchants for inclusion … our users can browse product categories or conduct product searches with confidence that the results we provide are relevant and unbiased.”

They’re singing a different tune now, aren’t they?

In truth, the change is not that unusual — paid inclusion for price comparison shopping has long been the industry standard. But the fact that Google is now adopting it after a decade of free inclusion comes as a surprise for some.

The bottom line

Google wants to change shopping experiences for the benefit of merchant and customer alike. Google believes that the new paid inclusion model will:

“… empower businesses of all sizes to compete effectively–and it will help shoppers turn their intentions into actions lightning fast. Today’s changes are a first step toward providing technology, tools and traffic to help power the retail ecosystem.”

It certainly sounds promising. If Shopping ends up being the experience consumers are looking for — as Google is positioning it as — it certainly has the potential to improve e-commerce.

Going forward

You have to wonder about the response of giant sites like Amazon and eBay, who currently get a lot of traffic from free listings. Well, Amazon gave us a hint during the first half of September when it announced that it had no intention of paying for listings for its own products (such as the Kindle). Amazon is making a move to establish itself as clear competition to Google Shopping.

You have to wonder, too, how this will change the landscape of Google search results over time. Will we ultimately see more variety of results? Less? Will the number of merchants who participate dwindle? Will fewer product listings have the unintended consequence of turning consumers away from Google in search of more comprehensive comparison engines?

Only time will tell.

What do you think? Do you plan to participate in the new Google Shopping?

Check back for the final part of our series, in which we discuss strategy!