It certainly looks good. Google is getting a TON of great press on this. They might even try to portray themselves as heroes to the layman reporter who just willingly and gladly spouts Google’s propaganda without researching or understanding it. We’re going to break it down for you and answer:
- Is it going to help current advertisers?
- Is it going to reduce costs?
- Is Google Shopping Free?
Come On Google – What’s the Catch?
But come on Google, the Pro’s know better 😉 we won’t tell anyone how this benefits you or your bottom line. Your revenues are down, so your move is to give even more away for free? We’ll all just play along with the narrative or will we?
Let’s start with the communication we sent out
This went to our white label PPC partners and clients the day after Google made their announcement:
Did you catch that? Google Shopping Ads are not FREE? What? Say it ain’t so!
But Google said, “It’s now Free to Sell on Google.”
So, who’s telling the truth here?
Well like all “truths” there are a few sides, and I’m going to try to unpack all of this for you so you can understand what you get, why it’s a good deal for you (if you don’t advertise now), and why it’s NOT a good deal for current advertisers, and why it’s a REALLY GOOD deal for Google.
First, what do you get?
Well you might think that your product will be shown on a Google Search like this: Search for Tennis Shoes
That’s Google Shopping Right?
Well, yes… But it’s NOT what they are giving away for free.
A Little Google Shopping History – How it Came From Froogle to Google Product Search
When Google Shopping was really free, it was known as Froogle. Here’s a little history (source Wikipedia). It was created by Craig Nevill-Manning and launched in December 2002, Froogle was different from most other price comparison services in that it used Google’s web crawler to index product data from the websites of vendors instead of using paid submissions. As with Google Search, Froogle was instead monetized using Google’s AdWords keyword advertising platform.
With its re-branding as Google Product Search, the service was modified to emphasize integration with Google Search; listings from the service could now appear alongside web search results.
Change to paid listings
Alongside the announcement of an immediate re-brand to Google Shopping on May 31, 2012, Google also announced that in late 2012, it would change the service to use a “pay-to-play” model, where merchants would have to pay Google to list their products on the service, with results influenced by both relevance and the bid amounts they pay. Google justified the move by stating that it would allow the service to “deliver the best answers for people searching for products and help connect merchants with the right customers
So you can see that Froogle (standalone), became Google Product Search (integrated with Google Search) and then Google Shopping (Pay to Play Google Product Search).
So It’s going to be Free Google Shopping Right?
Wrong. What Google is now offering is to include products in the Google Shopping “Tab.” While yes, it’s free, it’s not quite the same as Google Shopping results that appear directly in Google Search results. It’s more like what Froogle used to be. But not really. The ONLY way to be in the Search Result Pages will be by PAID inclusion. It’s a little well, misleading? confusing? maybe we’ll just say it intentionally looks good but not the whole story. There’s a word for that. What is it? It’s a word that means: an act or statement which misleads, hides the truth, or promotes a belief, concept, or idea that is not true. It is often done for personal gain or advantage, I’m not sure what the word is, maybe you should Google it.
You see there will be a MIX of paid advertisers and Free Listings. Note this is NOT in Google Search Results Pages – Just in the Shopping Tab See The following Image.
Well, It’s still Free Google Shopping (kinda) That’s Good For Advertisers Right?
Again, Wrong. Why isn’t it good for advertisers? Simple Supply and Demand. You see right now demand for Google Advertising is dropping. Understandably advertisers that are having difficulty shipping or staying open during the COVID-19 pandemic are pulling back their budgets. So while it might “seem” like a charitable thing for Google to offer free Google Shopping, it’s not. It’s really just self-serving greed to get more out of the advertisers that remain.
With a drop in competition, the remaining advertisers don’t have to “fight” as much to see their products get traffic, so naturally, they lower their bids. This is a double whammy for Google. Not only has Google lost advertisers that have pulled out, but they are also actually getting lower CPC (Cost per Click) from the advertisers that remain.
Free Google Shopping: The Solution to Google’s Falling Revenue – How?
The Solution? Fill up the platform with free listings. In other words, increase the competition. Increased competition (even free listings) will naturally increase the costs for advertisers who want to be seen. Their only option? Increase their bids to be seen above free listings. It’s a simple move to get CPC to rise from the advertisers that have been loyally staying with Google. Hey, I don’t blame Google. It’s a shrewd move to increase revenue. It’s reminiscent of when Google cut the ad space in SERPs in half. That move in 2016 sent their revenue skyrocketing forcing advertisers to bid more for less ad space. Brilliant! The part I don’t like is that this time they’re “spinning” it as though it is some kind of charitable move to better the world. It’s working! The press is “eating it up” right from the palm of the Google PR hand. Google the savior of the small business! Nicely played.Increased competition (even free listings) will naturally increase the costs for advertisers who want to be seen. Click To Tweet
Google, if you really want to help small business e-commerce customers (that’s what Google shopping is for) then make Google Shopping Entirely free. Search Engine Results and ALL! Don’t pit advertisers against free listings.
What should advertisers do?
The best that you can in any everchanging environment. Stick to the basics. Hyper Manage your campaigns, focus on ROAS, and do the best you can. Take the “free” listings just like everyone else. But keep your ad budgets concentrated on what’s working. But don’t drink the Kool-aid just yet. Nothings free, and nothing is as it seems, from the mighty Public Relations Machine of Google. Because at the end of the day, it’s all about getting your ad spend.
Author – Ken Knorr CEO