11 Comments

Summary:

Google is transforming its formerly free Google Product Search listings into Google Shopping, a new vertical that will only be stocked with products that companies have paid to place there. That’s a big change for Google, which has never shifted an originally free product to all-paid.

googleshopping1

Google is transforming its formerly free Google Product Search listings into Google Shopping, a new vertical that will only be stocked with products that companies have paid to place there. That’s a big change for Google, which had previously took a stand against what’s called “paid inclusion” in which a company can pay to have its results mixed in with regular search listings.

Google is framing the move as a way to better serve shoppers and  get more accurate data from merchants, some of whom may have inadvertently listed out of date prices or were flat out pushing incorrect pricing to lure in customers. The changeover won’t happen fully until this fall and Google is providing some incentives like credits for product listing ads and AdWords to convince merchants to pony up. Google said that the rankings in Google Shopping will be based on a combination of relevance and bid price so merchants can have some control over how prominently their products appear. Here’s what Google said in a blog post:

We believe that having a commercial relationship with merchants will encourage them to keep their product information fresh and up to date. Higher quality data—whether it’s accurate prices, the latest offers or product availability—should mean better shopping results for users, which in turn should create higher quality traffic for merchants

Google is also experimenting with the way products appear in regular Google.com web searches with larger sponsored product ads that feature more information and larger pictures. Products will still appear for free in organic Google searches and the 10 links will not be affected; only Google Shopping will require paid ads to be listed.

I don’t know how much actual traffic merchants get from Google Product Search but I can imagine some mixed reactions to this change. Some might want to pay to get a shot at having their products appear more prominently and many probably already are paying for some ads. But a lot of other merchants might balk at having to pay for something that was formerly free. It could be seen as a pay-to-play proposition. Users could also lose out by not seeing the breadth of products if many merchants decline to advertise through Google Shopping. That could make Google Shopping less popular with price-comparing consumers because the universe of products it features could be much smaller.

As Danny Sullivan of Search Engine Land pointed out, this is the first time Google has put a price tag on an originally free product.  The company introduced new verticals such Google Hotel Finder and Google Flight Search last year but it only became apparent recently that those two services were serving up results from the beginning that reflected paid relationships. Google has historically said it wouldn’t resort to paid inclusion, even including language in its original IPO filing about its avoidance of the practice. But the company doesn’t seem to think this is paid inclusion because sponsored products will clearly be marked as such. That’s up for debate, though, because Google is essentially creating a place where only paying customers can display their wares.

Now, we’ll have to see if Google starts transforming other search products in the same way. Sullivan speculated that Google could be positioning Google Shopping as an eventual commerce destination where people can not just find products but buy them directly through the site. That would put it direct competition with Amazon and other online retailers.

Even if it doesn’t go that far, it shows that Google is taking more steps toward monetizing formerly free services. For example, it has moved to start charging developers for API access to Google Maps, which was largely free for most developers. I guess it shouldn’t be surprising that a big company wants to squeeze more revenue out of its properties. But Google has always been known for providing so many products for free. This move to monetize more broadly may take some adjustment but it shows that Google is increasingly looking at the bottom line.

  1. Wow, what an opportunity to change habit! I had started thinking about using Amazon for initial product search since Google’s results are so haphazard these days and maybe take a look at Bing after all these years of avoidance.

    I have never clicked the endorsed links anyway since I figured the cost would be pushed down to customers and so this move will not likely list the best items for the most bang for the buck.

    When that happens Google becomes an impediment to the way I search and buy! You may want to re-think Google.

    Share
  2. threetwelvedavid Thursday, May 31, 2012

    Now let’s see, where have we heard that paid links are low-quality? Hmmm…

    Share
  3. threetwelvedavid Thursday, May 31, 2012

    Let’s see, where have I been hearing so much lately about how paid links are spammy and low-quality? Hmmm.

    Share
  4. So the question is … will they use a freemium business model which they do quite successfully with other services. Giving something for free, just to charge for the same service later just alienates customers. But then again, changes to the privacy rules have the same effect.
    I suppose Google got to the point where it needs to choose who it wants to alienate: its customers or its shareholders.

    Share
  5. Google will be making huge revenue due to this drastic change and retailers will have to pay millions to fill in the sales gaps. There are also upside to it, as many retailers would list free products, making search results messy. Now that they will have to pay, the search results would be more refined.

    Share
  6. Google may list ads as sponsored, but it is doing so in a very misleading way in Google Hotel Finder. As I wrote http://www.tnooz.com/2012/06/01/news/google-hotel-finder-ota-advertisers-commandeer-hotel-pages/ Google is labeling hotel listings as “Ads,” but the only practical booking links in bold red letters largely are from online travel agencies. Very misleading because at first glance these look like they are ads from the hotels. The hotel industry hasn’t yet woken up to this latest Google experiment, but I think the hotel industry will be very angry, to say the least. Google also isn’t very transparent about the total cost of booking the room. So much for transparency.

    Share
  7. For everyone who is looking for a truly open, social, and real-time channel to search products or promote products, take a look at this startup http://bizspeaking.com/

    Share
  8. Shameful! We are a small online business, trying every day to get ORGANIC search results with Google with hard work. All the fairness out the window Google? Thank you! Only the money counts!

    Share
  9. Might be worthwhile checking out sell anywhere links which allow adding products to a shopping cart directly out of Google’s natural search results. Do a search for ‘rough orange flakes’ to see an example. Or test a sell anywhere link such as http://iPod.santu.com to add a sample product right here to a checkout. Most people use the Google natural search anyway.

    Share
  10. I think this is a terrible idea. Not only does it affect me personally as a small online retailer with a very low advertising budget, but it goes against the product search as being a search engine. How long before they roll out a new service where you have to pay to get in the first 10 pages or so of regular search results? It’s stupid. I use google product search a lot myself when I’m planning to buy something and the main advantage has always been that a lot of retailers are featured in it. Making it paid will most certainly reduce the number of products being displayed.

    Share

Comments have been disabled for this post