Tag Archives: google shopping

Google Shopping Is Effective

A few months ago Google announced that it would be changing Google Shopping into a pay to play service. Many brands decided to pay and many opted out. The ones that stayed are seeing their money’s worth. Google Shopping ads are out performing text ads by 47% on clickthrough rates and conversion rates are 38% higher with the new vertical service.

One of the reasons for the improved performance is a universal lesson for the social media agency. Vertical searches (a search that has a global filter installed, think of all the Google options at the top of the screen such as ‘image’ or ‘shopping’) are better able to ascertain user intent. Searches are almost guaranteed to be more in line with what the customer is looking for and so clicks and conversions will also be more efficiently delivered to the user.

Another advantage of these engines is the lack of the big box retailers. While there are some, Wal-Mart is an example of a business that withdrew when Google changed to a pay to play system. Wal-Mart has the ability to offer up semantic searches within its own internet presence. That makes Google Shopping and other verticals more competitive for the smaller businesses. The social media agency would be wise to advise clients to take advantage of this.

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Google Shopping Changes Its Business Model

Google Shopping is the world’s largest price comparison service for consumers to investigate products they want to purchase. The service had been free, but Google has announced that business model will soon be changing. The new model will require vendors to bid on clicks in the comparison. So far some of the bids are up to 40 cents, so a small business garnering 500 clicks a year will owe Google around $2000. This change may drive vendors away from Google Shopping, but may keep some around as they compete for the vacuum of services left in the wake of those leaving the service. It seems unlikely that the larger vendors like Amazon will stick around and pay Google a 7-digit sum.

This change is interpreted by some as Google’s attempt to compete with Amazon. The space that Google excels at is local and Google Shopping is an attempt to capitalize on this strength and show up the national vendors. This new change seems to help the smaller business and the social media agency that represents it by driving out the large competitors and focusing on local-availability. However, the bidding right now seems too high for the small business—with an already tight margin thanks to the large vendors—to stick around. In time the price of the clicks may drop to more manageable levels, but for now agencies and their brands need to do some careful consideration of their involvement with Google Shopping.

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