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Why Google is encouraging customers to use Comparison Shopping Services

By Hedley Aylott

If searching online for products can sometimes feel like looking for a needle in a haystack, imagine what it feels like to be the needle. Finding ways to stand out online can be frustrating and, without proper planning, expensive.

The fact is, unless your product is unique, there are likely to be many outlets selling the same product at similar prices. The skill is first in getting the customer to find you; the second is getting them to choose you.

Fortunately, Productcaster have researched the best methods retailers can use to get themselves noticed, as well as saving on costs along the way.

Overhauling Google’s monopoly

The go-to method of getting products in front of eyeballs in the search environment has been through Google Shopping. 72% of millennials research their purchasing options online. Handy, accessible information helps customers make quick choices based on their most important criteria – right product, right price, right delivery.

For retailers using Google Shopping, there have been pros and cons. The format is certainly user-friendly and by using the same bidding format as the rest of Google Ads, marketers can easily keep a handle on their budget.

The downsides with Google have long been, ironically, its popularity. Everyone and their dog is using the site, so competition for a good ad rank is high – along with the cost. In fact, as Google owns the whole Shopping ecosystem, advertisers were at the mercy of its price setting. With Shopping ads recently accounting for 76.4% of retailers search ad spend, it’s a large slice of budget to have had little control over.

Or at least that was the case until 2017, when the EU ruled that Google’s dominance over the Search and Shopping environment was anti-competitive. A large fine soon followed, alongside the demand that it open the platform up to other entrants and actively encourage its customers to switch. As a result, the era of the Comparison Shopping Service (CSS) is now in full swing.

woman shopping online

What does a Comparison Shopping Service do for me?

Google Shopping was already a CSS, showing products from competing merchants, ranked according to bid value and quality score. Competitors already existed in the space, but their ability to share the top spot alongside Google’s own ads was next to zero before the EU ruling.

Now, merchants can host their products with a choice of CSS partner, selected according to their traffic, ability to showcase products effectively and overall campaign management. These CSSs can then compete with Google on a more than equal footing, helping brands get in front of customers quickly and fairly.

We say compete on a more than equal footing because, in a bid to speed up the levelling of the playing field, Google issued two massive incentives to help brands get on board with CSS partners. The first is an ongoing up to 20% discount for advertisers using competing CSSs and the second is a limited-time-only special offer ad credit worth €32,000 every 30 days based on ad spend matching.

The most obvious win for users of competing CSS providers here is cost. Running ad campaigns just got a whole lot cheaper. But, as we all know, simply joining in on a price war does no-one any favours. It’s what retailers do with the windfall that counts.

Money growing out of the ground

Taking advantage of the financial boost

Even in the limited time this brave new ad world has been alive, there have been some fairly impressive proofs of concept. One high street sports equipment retailer cut costs and still maintained revenue by slowly reducing its cost targets. Click-throughs stayed the same, but cost went down 16%.

Productcaster graph 1

Of course, the alternative to hoarding the savings is to keep spend the same and try to generate further growth – an approach tried by a different merchant that Productcaster has worked with. In their case, they kept cost-per-click (CPC) the same, which upped traffic by 17% and garnered a 4% increase in share of impressions.

Productcaster graph 2

Increased cash availability presents retailers with a wealth – excuse the pun – of opportunity. But it’s important to evaluate what the knock-on effect of those opportunities might be.

Retail brands should consider the implications of increased online traffic and/or footfall in-store – is there adequate inventory to cope with a surge in interest? Will the customer experience stack up as store staff and service agents are stretched thinner? Will the cost of logistics that support delivery increase in line with profits or will the need to expedite wipe out margin? These are nice problems to have, but they must be factored into any altered Shopping strategy.

In the event that growth is desirable, where should that growth be directed? To benefit from increased exposure, retailers would be well-advised to focus on high-performing items – if they know which ones those are. Which increase is best – more ads on the same product or showcasing a wider variety of inventory? It may be that the ads drive extra traffic to your store but the number of dropped baskets also grows exponentially. You’ll have to increase the retargeting campaign to bring them back.

It’s also important to note that it’s not just ad buying clout that has the power to grow customer consideration. While Shopping ads may seem straightforward, the difference that strong, high-resolution imagery, well-chosen keywords and support in the form of free delivery, seasonal discounting, warranties or reviews can make is significant.

Stocks chart

Why reaction times matter?

Understanding how to respond to the challenges above comes down to a business’s ability to analyse and model how various actions will impact the end result. Fortunately, CSS is an agile platform through which retailers can test, learn and iterate live campaigns.

Testing is a critical aspect to finding success with Google’s new terms, particularly in the mid-term while the dual incentive stays in place. To take full advantage, retailers have to move fast and can’t rely on digesting reams of information to then build ponderous, meticulous campaigns.

Instead, it’s a bandwagon very much to be leapt on: an iterative process that allows you to evolve your strategy based on the data. Launch smaller test campaigns, add product lines, create AB tests, move on from the successful candidate, adding a new variable and start the process again. Keep an eye on returns, particularly the diminishing ones.

The immediate advantage of Google’s CSS discount windfall is clearly cost but behind it lies so much opportunity – and challenges. It’s vitally important retailers don’t think of Shopping campaigns as simply ad tactics or another media tool. Instead, take the long view and make sure a partially temporary boost has the potential to drive long term benefits that feed growth and ultimately the bottom line.

Hedley Aylott, Founder, Productcaster

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