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The decision by Google to open up Shopping to free listings has been widely reported. But what are the actual implications for brands and retailers already running campaigns on Shopping Ads on Google, as well as those businesses who are now motivated to try it for the first time?

And does it reveal details of long-term plans by Google to change their strategy to tackle competition from Amazon and other eCommerce platforms. Will it have a positive or negative effect on existing Shopping CSS partners, including our work at RedBrain?

The initial access to free listings for retailers was limited to the Google Shopping tab within search results. It was announced by Google Commerce President, Bill Ready, in April 2020 with a rollout starting for U.S merchants. The free listings will then become available to retailers around the world “before the end of the year”.

“For retailers, this change means free exposure to millions of people who come to Google every day for their shopping needs. For shoppers, it means more products from more stores, discoverable through the Google Shopping tab. For advertisers, this means paid campaigns can now be augmented with free listings.”

The global coronavirus pandemic has brought new challenges for both retailers and consumers. But plans to allow free access to Shopping Ads on Google were in progress even before lockdowns around the world forced retailers to close physical shops and outlets. This explains why Google has quickly followed up with a further announcement at the end of June. 

The latest change is that free listings will now appear on the main search results page, within a product knowledge panel. These will replace the current sponsored product links, and will start rolling out in the U.S initially for mobile search results, and later followed by the desktop version.

There’s no specific mention of free access to product listings on the main search results page becoming available in other countries yet, but it’s likely to happen during 2020. Especially given the initial success of free listings in the Shopping Tab

“This change has already produced a significant increase in user engagement, with both clicks and impressions up substantially for merchants, meaning consumers are finding more of the products they’re looking for from a wider range of options... 

“And we already see that these changes will help generate billions of dollars in sales for retailers and brands in the U.S., on an annual basis.”

Alongside the increasing levels of free exposure available with Shopping Ads on Google, a new partnership with Paypal was announced, making it easier for new merchants to gain approval to advertise. And Google is also ramping up existing links with eCommerce platforms including Shopify, WooCommerce and BigCommerce “to make digital commerce more accessible for businesses of all sizes”

“It’s great to see Google responding in a positive way to help brands and retailers increase eCommerce sales during a challenging time. And looking at the changes in detail shows that it will also benefit RedBrain and our clients going forwards” said Alastair Campbell, Chief Growth Officer at RedBrain. 

How do the free Shopping Ads on Google work?

Currently the free product listings for Shopping Ads on Google are limited to the Shopping Tab for UK and European retailers. Even if the ability to appear on the main search results page for free is rolled out beyond the U.S, it’s unlikely we’ll see Google forego all of their current revenue from paid promotions. Especially as European and UK retailers have the option to work with a CSS partner on a CPA basis, which isn’t the case in America.

Looking at what you can do right now as a retailer in the UK and Europe, the free product listings will appear only within the Shopping Tab on a relevant search results page. Paid shopping campaigns will still power the Sponsored Product Listing Ad Carousel, and other Shopping advert placements on the main search results.

Within the Shopping Tab, paid advertising will also continue to appear at the top and bottom of each page, in addition to any appearances within the body of the product lists.

If your business is an existing user of Google Merchant Centre and Shopping Ads on Google, then you may be already eligible as the free options roll out across the UK and Europe. You simply need to opt in by choosing the ‘surfaces across Google’ programme card in your Merchant Centre account. You’ll find it located under ‘Growth’ in the left hand menu.

New users can add opt in during the Merchant Centre signup process. And Google has rolled out a new partnership which allows retailers using PayPal to link their accounts for supply business details more easily and allow for quicker verification.

The free Shopping Ads on Google will mainly benefit smaller businesses which aren’t already advertising, and those which don’t realise CSS partners, including RedBrain, already offer a CSS service with no upfront fees. Adding free listings won’t harm existing paid shopping campaigns, but aren’t likely to contribute more than marginal sales results.

Why has Google launched the free Shopping Ads ahead of schedule?

The obvious reason for Google accelerating their plans has been the impact of the Covid 19 pandemic and global lockdowns on consumer habits and eCommerce. Online shopping in the UK has taken a highest ever share of total retail expenditure as lockdown closures restricted high street shopping.

Our own data insights research has shown how online demand for specific products radically shifted as the pandemic progressed.

All eCommerce platforms are naturally limited by the overall size of the market. So, it’s logical to try to act fast when the sector expands rapidly for any reason. Retailers of all sizes have been forced to put a higher priority on internet sales and revenue. And UK consumers wanting anything offered by a non-essential retailer have been shopping online through necessity as well as choice. Global eCommerce was predicted to rise by 20.7% in 2020 even before the impact of the global pandemic was realised, with the UK already leading Europe with online sales totalling $141.93 billion in 2019, topped only by China and the U.S.

But alongside huge customer demand, most retail brands and businesses have needed to re-evaluate and reduce their advertising and marketing expenditure to survive the challenges of the pandemic.

So, Google has rolled out a range of measures aimed at supporting businesses, including the reintroduction of free Shopping Ads.

These measures will mostly help new advertisers and those currently paying for Shopping Ads on a CPC basis either in-house or via their agency or CSS partners. As RedBrain offers a service with no upfront fees and CPA-based payments, our merchants only pay a commission based on sales.

What is Google’s long-term plan for reintroducing free Product Listing Ads?

At launch in 2002, Shopping Ads on Google (formerly Froogle) was based on merchants submitting products to the search inventory for free. The switch to a paid model was announced a decade later, alongside a rebrand to “Google Shopping”.

Internet retail has changed hugely since 2012. The majority of merchants have vastly improved their eCommerce sites and information, which means the quality of data now available to Google is significantly better than at the turn of the millennium. This means that free listings will be a much higher standard than you would experience back in 2011, offering a better experience for customers.

Better retailer data also means Google benefits from vastly increasing the number of products listed. It means far more search results, particularly in niche areas, will result in relevant listings under the Shopping tab.

This also means far more brands will be represented in the Shopping results. There are benefits for consumers who will now see a wider range of options. But it also allows Google to share more impressive numbers of retailers and products to their investors and analysts. And lowers the chance of future rulings echoing the 2017 European Commission judgement which forced Google to give equal treatment to Comparison Shopping Services.

Google has often used free platforms to gain users and market share in a variety of online sectors, either before, or alongside, paid options. It’s a logical approach to use for Shopping Ads, encouraging businesses to benefit from the free product listings as a method to encourage them onto paid options, or a hybrid mixture of the two, in the future.

Are Google going after Amazon with free Shopping Ads?

Google continues to dominate the UK market share for search engines, and digital advertising. But the continued growth of Amazon has seen it grow to secure around 30% of all UK eCommerce, and become an increasingly important starting point for consumers looking to purchase products.

Although Google has a 32% share of global online ad sales in comparison to the 4% of Amazon in 2019, it’s led to news reports claiming there is a co-ordinated internal effort at Google to counter the rising threat.

The timing of the announcement was both a response to the pandemic, and potentially Amazon, which focused on delivering essential items in the midst of challenges on pricing, stock levels and fulfilment on behalf of its merchants.

Shortages of stock and delays in delivery on Amazon led consumers back to searching the internet to research and compare products before buying directly from retailers. And this obviously helps Google in terms of an 85% share of search in the UK, and for Shopping Ads on Google with paid advertising appearing directly on search results pages, along with the listings under the Shopping tab.

This reflects the different strategies of the two companies up to this point. Amazon provides a retail outlet for merchants who don’t necessarily care about building their own brand or website as much as securing immediate sales.

Shopping Ads by Google is more effective as a way for businesses to build their name and reputation alongside making sales on a major platform. Due to the fact Shopping Ads drive customers to complete their purchase via the brand’s eCommerce website, it allows the merchants to have a far greater presence in the transaction. And to offer greater scope to obtain customer data, build loyalty, and encourage repeat purchases.

With some retailers still underestimating the scale and reach of Shopping Ads by Google, there’s a large opportunity to promote the brand and awareness benefits in addition to the sales opportunities offered by both.

What’s the impact on retailers already advertising, or starting out, with Shopping ads?

For businesses encouraged to try Shopping Ads by Google due to the free listings, there will be a number of benefits.

Although the free product listings will currently only appear within the Shopping tab, obviously retailers will benefit from any sales that are made as a result. This is likely to have a bigger impact for smaller retailers operating in particular niche areas with less competition.

But all eCommerce merchants will have an added incentive to ensure they have accurate and optimised product feeds, and to improve the product information and assets on their websites. This will improve the chances of sales driven by Shopping Ads, but should also improve the conversion rates for customers arriving directly or by other promotional channels.

It also provides a new source of relevant commercial search data and feedback on areas to improve. This crosses over with other marketing areas, such as search engine optimisation, in driving improvements to content, product scheme mark-up, and competitor analysis.

The combined effect is likely to be that Shopping Ads by Google become an essential free marketing channel, rather than an optional add-on which many businesses have yet to try.

Brands paying for existing campaigns may also see a benefit from the introduction of free listings. The increased awareness and larger available product choice should lead to an increased volume of shopping traffic, creating a halo effect for the more prominent paid advertising inventory (and additional promotional options offered by working with CSS partners).

If free listings do succeed in driving large numbers of new businesses to not only add their products to Shopping Ads on Google, but convert a reasonable percentage to investing in paid campaigns, then there may be an increase in CPC bidding costs due to higher competition.

This could increase the advertising budget required for Shopping Ads for existing campaigns which aren’t run via CSS partners able to offer a CPA model (such as RedBrain).

What does it mean for RedBrain?

As the biggest European CSS platform and a Google Premium CSS partner, we forecast free listings are likely to have a small but positive impact on RedBrain and our clients.

Our existing campaigns operate on a CPA basis with no upfront fees, so our business model already offers an essentially free route to the most prominent paid Shopping Ad promotion, without costing a retailer until sales have been made.

And our AI machine learning platform allows us to optimise and manage product data feeds, and Shopping ad bidding at scale. Which will mean that we can minimise the impact of small price increases in the CPC bidding by continually improving our approach.

The benefits we predict will come from thousands of new retailers adding and optimising a massive range of products for Shopping Ads by Google. The increases in consumer awareness and traffic volumes should provide a noticeable uptick in results for our partners. And when retailers wish to move from free listings to explore the paid options, our AI Shopping Service allows them to make the change with no upfront costs or risks.

So, we expect to see better awareness of the opportunities Shopping Ads on Google provides across the retail sector, a potential for new partners to join us with higher levels of optimisation already in place for their products and data feeds, and ultimately more customers for both our existing and new merchants and networks.

If you’d like more information on how we can help your business benefit from the reintroduction of free Product Listing Ads and other Shopping announcements by Google. Or how we deliver £1 billion in sales per year, and 3 million clicks every day, then we’d love for you to contact us today.

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