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With searchers choosing Amazon over Google for product searches and eBay resurgent, will Google have to launch its own marketplace to keep up?

Online retailers are a major source of advertising revenue for Google but shoppers are increasingly turning to Amazon as their shopping first port of call.  

In 2010 24% of shoppers began researching on Google verses 18% on Amazon, however in 2012 this had almost completely reversed with 30% on Amazon and only 13% on Google.

Google is clearly aiming to be the destination for product searches with the launch of Product Listing Ads (PLA). However, some industry experts are wondering whether to win in this space Google will need to go beyond simply advertising products and launch a fully-fledged marketplace.  

Here’s why...

According to Channel Advisor’s CEO Scott Wingo:

We've long been believers they would need to go there to counter the momentum that Amazon has.

Too complicated for SMEs

The cost-per-click (CPC) structure which Google uses is much more complex than the commission model which is used by marketplaces.  

On both eBay and Amazon it is effectively free for sellers to advertise their products with a fee only being paid on when an item is sold. This makes it risk free for retailers to list all their inventory and simple to calculate margins.  

Google misses out on a massive market by not having a simple to use offering for SMEs.

Marketplaces work better internationally

Amazon and eBay make it extremely easy for retailers to sell internationally and they have been aggressively pushing their customers to sell overseas.  

Using Adwords to advertise products overseas requires complicated setup i.e. multi-currency website and a separate Google merchant feed for each country.  

Cross border trade is a huge growth area and Google does not have a compelling offering in this space.

Mobile shopping works better on marketplaces than on Google

Mobile is growing fast but conversion rates are approximately a third of desktop. This is worrying for Google as lower conversion rates mean retailers will be prepared to pay less for their CPC traffic.  

Mobile shopping online via Google is also a disjointed experience compared to the all in experience of buying through Amazon and eBay high successful marketplace apps.  

Low value products don’t lend themselves to CPC

As Google charges on a CPC basis, lower value items are often not economic to advertise unless a site has a very high conversion rate.  

On marketplaces, fees are charged on a commission basis and so there is no barrier to listing inventory.  

Marketplaces are multiplying

The success of Amazon’s fixed price market has caused other major retailers to set up marketplaces of their own. In the UK Tesco has its own marketplace and in the US, Walmart and Sears. Overall, marketplaces are only going to grow in importance.

Perhaps Google is already heading in this direction

Finally, there are some pointers that Google is already testing the water for a marketplace style solution.  

In San Francisco it has launched a trial service called Google Shopping Express which allows customers to receive items on same day delivery from a range of major retailers such as ToysRus and Whole Foods.  

The offering is basically a fixed price marketplace with the whole experience taking place on Google’s site.

Google’s Trusted Store programme certifies stores which offer a good customer experience and gives a level of order guarantee. This is not dissimilar in many ways to the guarantees, metrics and feedback system provided by the major online marketplaces.  

The scheme is live in the USA and is currently in beta in the UK.

Trevor Ginn

Published 21 January, 2014 by Trevor Ginn

Trevor Ginn runs the online baby and nursery retailer Hello Baby and blogs at www.trevorginn.com.  You can follow him on Twitter

3 more posts from this author

Comments (4)

dan barker

dan barker, E-Business Consultant at Dan Barker

hi, Trevor, thanks for writing the article. I enjoyed reading it.

Oddly, Google already has an enormous marketplace: The Play Store.

I wonder if they'll ever link it up with their comparison shopping stuff & PLAs?

I suppose it would cause a customer service nightmare initially, much of which would be out of their control, but an interesting thought nonetheless.


almost 3 years ago


Dan W, Digital Marketing / Ecommerce / Optimisation Professional at Personal

UX issue: Play Store is brilliant, but I'd love to know how many people click the Play Store button / app (white square with a big play triangle) when they really to hit the Play Music app (yellow headphones) on their phone? I bet the bounce rate for Play Store is really high.

Source query: Which report is this from out of interest?: "In 2010 24% of shoppers began researching on Google verses 18% on Amazon, however in 2012 this had almost completely reversed with 30% on Amazon and only 13% on Google."

almost 3 years ago

Simon Dunant

Simon Dunant, Owner at NewRise Digital

One of the biggest factors for marketplaces is that they have to have a good customer service back end to manage the after sales experience.

Google have never been strong in this area. When it was around did you ever try getting support after an erroneous Google Checkout transaction, have you as a smaller advertiser ever tried reaching out to an AdWords rep? Quite amusing considering user experience is now a major factor in Google's SEO algorithm (does Google rank Google ;-D?)

Google don't do support well and the success of a marketplace's reputation is heavily tied up on after sales service, that's why I don't think you'll see a Google product marketplace anytime soon.

almost 3 years ago


Trevor Ginn

@ dan


@ Simon

Whilst I agree that Google checkout was rubbish, I'm sure that Google can improve at customer service if needs must. The problems outlined above aren't going to go away

almost 3 years ago

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