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Anytime Google changes its processes, big changes occur elsewhere on the web. Now, there are big changes for companies that sell their products on the web.

Earlier this month, Sameer Samat, vice president of product management at Google Shopping, announced that the search engine, the most-used in the world, would be changing its “Product Search” function to “a purely commercial model” in an article published by Reuters.

The Old: Product Search

Previously, when a person searched for a product on Google, a page of results would appear. The top of the page listed product search results, which were shown based on the relevance of the product. Essentially, Google provided  merchants with free access to online shoppers.

The New: Google Shopping

“Today, that model goes away,” said Eric Best, CEO of Mercent, an ecommerce marketing company. “It’s a very big deal.”

Instead of being based purely on relevance, “ranking in Google Shopping will be based on a combination of relevance and bid price—just like Product Listing Ads today,” Samat says in an article published by Internet Retailer, an Internet and ecommerce news site.

Similar to Google’s pay-per-click advertising program, AdWords, Google Shopping will make it easier for online retailers to sell their products … at a price.

Ecommerce companies can choose two ways to pay for their products’ results:

  1. Cost-Per-Click: online retailers bid on the amount they will pay if their product listings in Google’s search results attract a click
  2. Cost-Per-Acquisition: online retailers bid on the amount they will pay if their product listings in Google’s search results cause a purchase

According to Google, Product Listing advertisements  will include an image, the product’s price, and the name of the retailer selling it.

Why It Matters:

  1. Online retailers will have to learn this new tool in order to optimize their results. Potentially, this new function could prove advantageous for ecommerce–for both small and large businesses alike.
  2. Google will make more money: “Pay-for-placement to some degree is an alternative to purely organic relevancy results,” he said. “The fact that shopping results will be more closely tied to bid-for-placement will not sit well with all advertisers.”
  3. Some internet marketing companies claim that this takes Google further down the path towards eliminating organic search. “That’s a slippery slope because this could apply to websites, not just product listings,” Scot Wingo, CEO of ChannelAdvisor,  said. “Why have organic search at all?”

It’s too early to tell exactly what effect Google Shopping will really have on the web. One thing’s for certain though: something will change.

Written by: Daniel Griffith on July 6, 2012

Daniel is an Author, Designer, and Entrepreneur. With over 10 years of industry experience, Daniel utilizes his unique blend of mathematics and poetry, engineering and creative thinking to solve both technical and business challenges.

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