Do you remember all that fuss about Google Shopping being anti-competitive?

For those of you who don’t, roughly a year ago the European Commission fined Google €2.4bn for favouring its own shopping comparison service ahead of competitors, and asked it to find a way of levelling the playing field. 

12 months later, and we have Google’s answer. And it’s great news for advertisers!

 To make Shopping more competitive, Google is opening up the auction to more Comparison Shopping Services (CSS). To make sure that they can actually appear in the auction, Google is running a discounted auction for non-Google properties. From our testing to date at Brainlabs, CPCs are coming in at an average of 20% less - for exactly the same traffic.

That’s twenty per cent.

Seriously: if you’re an ecommerce brand with any kind of budget for search advertising, this is a hell of a deal, and a rare gift from Google. We can all thank the European Commission for their commitment to market competition.

In this post, I’m just going to tell you as simply as possible how to take advantage of this opportunity. Nothing too complex, but definitely worth considering if you’re into retail search advertising.

How it works

Merchants who are interested in placing Shopping Ads have to work with a CSS. This is a website that collects product offers from online retailers, and sends users who click on ads on Google to the retailers' websites to make a purchase.

Each CSS bids to place Shopping ads on Google's search engine results page (SERP) on behalf of merchants. Only a CSS can place product ads, and merchants can work with more than one. According to Google, all CSSs have the same opportunities to place ads on the SERP.

The only difference will be the label at the bottom of the ad not saying "By Google" (as Google Shopping functions as a CSS too), but linking to another site instead. The thing is, even though there is a small link to the CSS in the ad, 99.9% of the clicks are on the product itself, which takes you straight to the site rather than the CSS.

shop black shoes 

Disclaimer: image for the purpose of illustration only.

A CSS can become certified by Google in order to become a Comparison Shopping Partner. This is where the promotional incentive comes into play: under the partner programme, merchants get around 20% cheaper CPCs.

And the EU seems to be pleased with Google's answer so far. Margrethe Vestager, the EU's Commissioner for Competition, said that the presence of rival products in shopping slots has increased from 15% to a third, and the share of clicks on rival products has increased from 2.5% to 6.1%.

Getting started

So, signing up with a partner means working with a certified CSS that has the experience and resources to help brands with both strategy and optimisation. And, you get a pretty significant reduction in cost per click, which you don't get from bidding directly on Google.

Sounds good? To get in on the deal, you'll need to pick a CSS to host your shopping ads. Google has a convenient list of partners to choose from (disclaimer: my company Brainlabs is one of them). The CSS will create a separate Merchant Center account for you to upload inventory to, and will run the Shopping campaign on your behalf.

If you have an existing Merchant Center account, it can be migrated to the CSS account. After that, partners can help with anything from creating campaigns to feed management. A good CSS will of course offer total transparency and access. 

Google's Shopping Ads is the best place for retail search advertising, but ad space is becoming more and more competitive. The game has always been about optimising your practice and being ready to adapt to change, and this is especially true when pretty spectacular opportunities like this one come along. We're going to be experimenting with this new setup and doing more tests to measure impact. Watch this space!

ppc training 

Daniel Gilbert

Published 24 July, 2018 by Daniel Gilbert

Daniel Gilbert is CEO at Brainlabs Digital and a contributor to Econsultancy. You can connect with Daniel on LinkedIn

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Pete Austin

Pete Austin, Founder and Author at Fresh Relevance

Fascinating report. Let's consider just the numbers from Margrethe Vestager (above). She says there's at least one rival product in 33% of slots. Could be more than one of course. Doing the math on this suggests that rival products have about 10% of the screen space. (I'm assuming that the average slot has 5 products - the percentage is bigger than 10% if slots are smaller.) Yet their share of clicks is only 6.1% from this 10% of slot space.

This suggests that shoppers are about 40% less likely to click on products from other CSS vendors, compared to Google, possibly because they are deterred by the unfamiliar brand. If so, that "20% cheaper" discount is not enough to make up for the reduced performance.

22 days ago

Pete Austin

Pete Austin, Founder and Author at Fresh Relevance

Damn. My apologies, let's roll-back on that final sentence. I forgot we're talking Pay-per-Click advertising here, so the 40% reduced performance doesn't really affect the advertiser and may even be a positive, because when those shoppers next see an advert for the same brand, without an unfamilar CSS to deter them, they may be primed to click.

But someone's losing a ton of money, and I'm gonna bet it's mainly the European publisher of the website which hosts the adverts. So congratulations Google!

22 days ago

Chris Attewell

Chris Attewell, SVP Global Sales at Search Laboratory

What's your view on how long this will last? The shopping comparison companies that originally brought the case against Google to the EU Commission believe that this isn't in line with what Google was required to do to avoid the fine (http://www.foundem.co.uk/The_Google_SpendMatch_Debacle.pdf) and will surely press the Commissioner to clamp down on the new CSS partner program.

22 days ago

Daniel Gilbert

Daniel Gilbert, CEO at Brainlabs

@Chris - there are so many factors at play from a regulatory perspective that it's hard to say. However - there is clearly a first-mover advantage for the actual discount. i.e. I would expect that to diminish over time as more people move onto CSS... thus returning the auction to it's previous level.

22 days ago

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Magnus Jørgensen, Performance Marketing Manager at Unisport A/S

Been thinking about moving our Google Shopping spend to a CSS instead of Google or maybe starting our own, but how does the CSS' compete against Google when we talk bidding strategies? Google has a huge advantage in the Target ROAS strategy and data that they have available to feed that bidding strategy. What's your take on that, Daniel?

21 days ago

Brian Roizen

Brian Roizen, Founder at Feedonomics

Great article Daniel - also awesome to see some competition in the UK. At Feedonomics, we're already seeing feed-based clients in the UK to send their optimized product data to more CSS websites!

20 days ago

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