3 Reasons Google’s New Shopping Listings Are Really About Amazon

Sure, Google wants to help retailers—but it also wants market share

google shopping screens
Free organic listings are coming to Google Shopping, but it's not just to help retailers during the pandemic.
Google

Key insights:

When Google announced it is adding organic listings to its Shopping site and other properties, the platform said it wanted to help retailers connect with consumers regardless of advertising spend.

Bill Ready, Google’s president of Commerce, painted it as a win-win-win: The new results give retailers exposure to hundreds of millions of daily shopping searches, consumers a wider range of purchase options, and advertisers the means to augment their paid campaigns.

“Solutions during this crisis will not be fast or easy, but we hope to provide a measure of relief for businesses and lay the groundwork for a healthier retail ecosystem in the future,” Ready wrote.

Search marketers, however, say the truth is more nuanced.

In fact, even Google itself stands to benefit, as it will likely gain users and market share along with advertising dollars.

“Those incremental advertising dollars will come from advertisers who sign up to do shopping via Google’s free shopping ads, who then see the amazing ROI and begin spending dollars on paid ads on Google,” said David Dweck, head of paid search at digital marketing agency Wpromote.

And while consumers and retailers do indeed stand to win, it’s a mixed bag for advertisers.

“It’s a loss for advertisers who have paid to play on Google and now will have increased competition from those who weren’t running paid shopping campaigns on Google,” Dweck said. “It’s a win because it gives those advertisers who were spending money additional free exposure, free sales and speed to market as current paid shopping advertisers on Google will be first movers due to being auto-opted into the program.”

So why rock the boat now?

Google wants to reclaim product searches

According to Rachel Bucey, vice president of earned media at Wpromote, the global pandemic has exposed a chink in Amazon’s armor.

“Consumers’ need to bring all shopping behaviors online has unveiled gaps in Amazon’s offering and infrastructure,” she said. “Shoppers that previously valued the simple convenience of quickly buying the basics are now craving variety as well. Google’s timely release of a no-barriers breadth of products may represent the competitive edge needed to challenge Amazon as a one-stop online shopping solution.”

The evolution of Google’s shopping ads can be traced back almost 20 years. When shopping results first came to Google in 2002, it was through an SEO technique called Froogle. But, over time, the platform realized how much it could increase advertising revenue if it switched to an auction-based model, said Gregg Manias, vice president of strategy at search marketing agency Acronym.

Google rebranded Froogle as Google Product Search in 2007—Marissa Mayer, who was then vice president of search and user experience, made the announcement. And, in 2012, it evolved into the commercial model known as Google Shopping.

“We believe that having a commercial relationship with merchants will encourage them to keep their product information fresh and up to date,” the search platform said in a blog post at the time. “Higher quality data—whether it’s accurate prices, the latest offers or product availability—should mean better shopping results for users, which in turn should create higher quality traffic for merchants.”

But part of the problem, Bucey said, is consumers prefer organic results—only 9% of clicks are generated from paid ads. This hampered Google Shopping over the years. And then the darnedest thing happened: Consumers started bypassing Google for product searches and heading straight to Amazon.

Now Google is trying to fix a problem of its own creation.

“Google made a huge mistake years ago by going from both free and paid shopping ads to only paid shopping ads. At the time, it was a greedy move designed to fully monetize the shopping real estate on Google search engine results,” Dweck said. “This move has 100% backfired on Google as it allowed Amazon to grab a foothold in ecommerce search, resulting in over 50% of product searches starting on Amazon versus Google.”


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