The €280 Million Blind Spot in European Google Shopping

Despite the maturity of the CSS ecosystem across the European Economic Area (EEA), Switzerland and the UK, an estimated 10% of all European Google Shopping ad spend still runs through Google’s own CSS, Google Shopping Europe (GSE).

Run the numbers on the European ad market and that 10% translates into roughly €280 million a year in avoidable margin: money that retailers hand over without getting a single extra click or impression in return.

How the GSE margin works

To see why this money is effectively wasted, it helps to look at how the European Google Shopping auction works.

After the EU’s 2017 antitrust decision, Google’s own comparison shopping service has to run as a separate unit, Google Shopping Europe, and compete on equal terms with independent CSS providers. To make a profit like any other CSS, Google Shopping deducts a fixed percentage margin from every merchant bid before that bid enters the auction. Google does not publish the percentage; it is commonly put at 20%, and the examples in this article use 20%.

If you bid €1.00 through GSE, only €0.80 goes into the auction to compete against other retailers.

When your Merchant Center runs through an independent CSS partner instead, which typically charges a flat monthly fee rather than a share of your ad spend, your full €1.00 bid enters the auction. Put another way: to match a €1.00 auction bid from a CSS advertiser, a merchant on GSE has to bid €1.25. That is a 25% bidding power advantage for the CSS advertiser.

Source for the deduction: Google Merchant Center Help

Breaking down the numbers: the €280 million calculation

How much does the margin cost European e-commerce in total? A simple model built from the size of the European search and retail advertising market gives an order of magnitude.

1. Sizing the European Google Shopping market (about €14 billion)

European digital ad spend reached about €131 billion in 2025, according to IAB Europe’s AdEx Benchmark. Within that market:

Paid search: about €56 billion, around 43% of digital ad spend (IAB Europe).
Retail’s slice of search: e-commerce and retail are estimated at 28% to 32% of paid search investment, roughly €16 to €18 billion.
Shopping ads within retail search: product ads, in Standard Shopping and in Performance Max retail campaigns, are estimated at 76% to 85% of that spend.

Together, that puts European Google Shopping ad spend in CSS markets at roughly €14 billion a year.

2. The 10% still on GSE (about €1.4 billion)

Most large retailers and specialised PPC agencies moved to CSS partners years ago. But many small and medium-sized online shops, newly launched brands and in-house marketing teams still run on the default setup with Google Shopping.

If 10% of European Shopping spend remains on GSE, about €1.4 billion of ad budget a year is still subject to Google’s margin.

3. The cost of not switching (about €280 million)

Applying a 20% margin to about €1.4 billion gives the cost of doing nothing: across Europe, merchants give up an estimated roughly €280 million in auction value a year simply because they have not switched their CSS.

This is a model, not a measurement: apart from the IAB Europe figures, every input is an estimate. It shows the order of magnitude, not an exact amount.

Why are retailers still leaving money on the table?

If switching to a CSS partner is one of the closest things to a free lunch in performance marketing, why hasn’t the remaining 10% switched? In practice, it usually comes down to three misconceptions:

1The “set and forget” Performance Max trap: many advertisers who launched Performance Max campaigns assume that Google’s AI optimises every lever. Performance Max automates bidding and placements, but it still runs on your Merchant Center feed. If that feed runs through GSE, your bids on Shopping placements still lose the margin.
2Fear of data loss or downtime: some merchants worry that a new CSS will reset their campaigns’ learning phase, get products disapproved or mean rebuilding their feeds. In practice, a CSS switch only changes which CSS your Merchant Center is linked to: your account, feed, campaigns and their history stay as they are, with no downtime.
3Lack of visibility: the margin is deducted inside the auction instead of appearing as a separate line on the Google Ads invoice, so many finance and marketing leads don’t realise they are paying it.

How to check if you’re part of the 10%

Checking whether your shop is part of that €280 million takes less than thirty seconds:

1Look at one of your live Shopping ads on Google Search.
2At the bottom of the ad, below the price and shipping details, find the “By …” link.
3If it says “By Google”, your ads run through Google Shopping Europe and lose the margin on every bid. If it shows the name of an independent CSS, your full bid goes into the auction.

For any European online shop whose ads still show “By Google”, switching to an independent CSS is the fastest, lowest-risk way to put the full bid back into the auction, without changing feeds or campaigns.

The €280 Million Blind Spot: European Retailers Are Still Overpaying for Google Shopping