Google Shopping – 2015 and Beyond

(See also Advanced Optimization Of Google Shopping Campaigns)

As of September 15th 2015, the change to the Products Feed Specification started to take effect, including amongst other markets the US, UK and Germany. This required advertisers to include a GTIN for these designated 50 brands into their feed.

To understand the implications for advertisers, the launch of the Google Manufacturer Center has to be taken into account. It allows manufacturers to transmit structured data about their products – such as images and specifications of their products. Martin Röttgerding describes the product data in more detail.

The rationale is, of course, to connect advertised inventory with centralized product data. As a consequence, retailers will theoretically just need to provide GTINs, prices and availability in their product feeds taking away a lot of the hustle associated with product feed optimization.

But: what looks like a change to make retailers’ lives easier has by far wider implications. And will be – in the long run –mostly beneficial to Google and shoppers. Let’s take a look into the crystal ball.

Shoppers to Benefit from Even More Market Transparency

Shoppers will get – in addition to relevant Product Ads – more information about the products. The SEM Post gives a sneak preview what the Knowledge Panel may look like. The 50 designated brands unveil the currently favoured product categories by Google: consumer electronics, (luxury) fashion, as well as sports and accessories.

Google Product Listing Ad(Source: The SEM Post)

Google to Possibly Become Price Comparison Engine, Market Place or Both

Google benefits in many ways. By using standardised product data, it can start to fight Amazon’s predominant position as a product research and discovery portal. It will be able to aggregate product ratings and reviews across retailers – and hence compete with one of Amazon`s biggest assets. And it opens Google to a whole new range of business model options – allowing to position itself more and more as a price comparison engine, as recently seen ads already suggest.

Google price comparison(Source: http://techcrunch.com/2015/07/01/google-is-testing-price-comparisons-in-its-product-ads/)

Combine that with the mobile buy button. With Google allowing shoppers to do a product checkout without even leaving the site, it is giving birth to a “Google Marketplace“ – as a sneak-in to improve mobile conversion rates. The checkout and payment transaction allow Google to switch between CPC-based monetization models to commission – or revenue sharing models – without ever having to build an inventory warehouse. While Amazon decided to shut down its product ads as a whole, Google can experiment with hybrid variants, seeking to maximize returns for different industries or offering retailers the model they favour.

Buy Now Button(Source: http://adwords.blogspot.de/2015/07/winning-shopping-micro-moments.html)

Let a few years pass and add on top of that Google’s self-driving cars into the game: instead of incurring cost for central warehouses, the company may benefit by building its own logistics fleet. Retailers could just put the goods into a self-driving delivery car – creating a lightweight, flexible and distributed same day delivery network.

Retailers Benefit in the Short Term But Are Exposed to Even More Increased Market Transparency

Technically, Google and advertisers will have to struggle less with feed data. The biggest question is what will happen to the product title, which is currently very important for two reasons:

  1. Google uses it to match search queries with products. Research conducted by crealytics shows the huge impression uplift that can be achieved by factoring real search queries – or parts of it – into product titles. That competitive advantage might likely be gone in a few years’ time.
  2. The title is also used as ad text. Probably both advertiser specific and general product data will show up in ads.

In a nutshell: product titles in the feed will very likely become more and more irrelevant. Retailers will compete mainly by price and delivery speed – which could even replace Bid Management as we know it in a not so distant future. In the long term, pure online retailers will need new strategies to profitably run their businesses – or incur the risk of becoming logistical partners for Google.

What do you expect? Leave us a comment or two.


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Alexander Paluch

Alexander has several years of experience as an IT consultant and Product Owner in the e-commerce industry. Today he works as a Senior Product Manager for crealytics.

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