Google was fined 2.42 billion euros by the EU for allegedly prioritizing its Google Shopping price comparison service over its competitors in search results. Google responded by opening up Shopping advertisements in Google Search to product ads of other price comparison services (or Comparison Shopping Services or CSS).
Google introduced Comparison Shopping Services to meet European market legislation. Google Shopping offers serious financial incentives to encourage competition. This has led to an increase of price comparison service providers. Advertisers are more than happy switching. CSS has become a fad. Don’t let a temporary benefit fool you. You can also switch now to increase your sales margins in the long-term. You must continue to bid intelligently if you want to make a profit.
What exactly are Comparison Shopping Services (CSS)?
Advertisers can now purchase product ads in Google SERP, just as before. You can either use Google Shopping or a different comparison shopping site like Beslist.nl. These links can be easily identified by the consumer, as they are displayed beneath each product. Clicking on a product will take the user to the advertiser.
Like other Google search ads, product advertising spots are sold via auction. The position and CPC of your advertisements is determined by the bid, quality (read: expected CTR), and the CPC that you pay. This CPC is split into the CPC that you pay Google in Europe and a margin to Google Shopping (estimated at 20%). This margin of 20% for Google Shopping is not applicable if you advertise through a CSS partner. Advertisers could experience a 20% reduction in their advertising costs, or maintain their CPCs to increase visibility and convert more customers.
Why the Hype?
Google reimburses click costs under the SpendMatch incentive program, in addition to the 20% margin advantage. This could be up to 32,000 euros per 30 days. Although the end date is unknown, the sooner you switch, the greater the benefits. This incentive is partly responsible for the explosion in certified CSS partners. Dept became a CSS Partner to help customers. The EU seems satisfied with these developments. Margrethe Vestager, EU Commissioner stated that there had been a noticeable increase in clicks and competitors. CSS seems like a great idea, but it is only a first impression.
Google Shopping CSS is the new Standard
Google was open about this from the beginning. SpendMatch can be ended at any time. This is a temporary offer that aims to attract more price comparison services for Google Shopping. SpendMatch will not be available next year, despite its enormous success.
Be aware: If everyone switches to CSS without the 20% CPC margin, then the auction will automatically correct. This will be the first time we see it in competitive markets. This is why early adopters of Google Shopping will choose to allow the higher CPC to continue in order to secure a better place in the auction. Lowering your bids in calm markets will yield better results. However, even in calmer markets, increasing advertising through CPC partners will eventually ensure that the CPC is consistent with the current values. All advertisers will be encouraged by the auction principle to pay the visitor what they are worth.
Is the hype only for those advertisers who jump first? It is not. However, the sooner you sign up the better. Advertisers who continue to only advertise via Google Shopping are the ones that will lose. They will continue paying 20 percent more to display their products in Google Shopping than their competition.
Is it necessary to completely switch to CSS? No. You don’t have to abandon Google Shopping completely. Shopping.google.com is used by some consumers. CSS partners are not shown here, contrary to the search results page. It is best to wait for the Google Shopping as CSS option so that your shopping campaigns can only be bid on shopping.google.com. The best way to avoid this is to duplicate shopping campaigns and let them run side-by side with your bidding strategies. Google will ensure that the same product is never shown twice.
Competitive long-term Advantage on Google Shopping
These hypes can lead to advertisers losing sight of the larger picture. Bidding intelligently is key, so management and data are crucial. These two factors are crucial because everyone wants a healthy Return on Advertising Spend (ROAS). Advertising space on Google is becoming more expensive every year. It is important to bid more intelligently on the Google Ads auction (previously AdWords) than your competitors. It is crucial to optimize the potential value of a customer. Many advertisers have the opportunity to use their own data such as margin or return. You can focus your attention on actual profit by making this data accessible in Google Ads.
You can also briefly review a policy to help you convert data in Google Ads. You can optimize your ads by spreading your advertising budget over multiple Ads accounts or partners. This will result in less revenue per account and lower insight. Your CSS partners can share information such as conversions and negative keywords. The question asks you which insights you are unwilling to share with the CSS partner. Google distinguishes between comparison shopping partners and premium comparison partners because of this distinction. Although it is easy to become a Comparison Shopping Partner, premium partners require more work. A minimum of 100 advertisers are required, along with additional technical certification. You must also support conversion tracking. You will notice a significant difference in the quality of your work. Switching to another CSS partner should also be transparent and ensure that your data is properly protected.
Focus on your Goals
It’s doubtful that CSS has been heard the last. Although EU Commissioner Vestager acknowledges the progress made, she added: “We have not taken any decision, neither on one hand to say that it is fine nor on the other side to say, no, no, it’s never’.” It remains to be seen if CSS will satisfy the EU in its current form.
In the short-term, advertisers who respond well to the CSS hype will definitely benefit financially. But, you should not only be focusing on a shorter-term lower CPC and increased traffic with the same budget. It is the profit margin per sale that falls below the line. For example, if you incorporate your margin and return opportunity into your bidding strategy, you can make a bigger difference. This will also ensure that your data is sustainable over the long-term. You should develop a shopping strategy that is based on your long-term goals. Do not blindly follow the hype.
Interested in Google Shopping CSS & How It Can Benefit Your Business?
Are you interested in learning how to get the most from CSS for your brand? csspartner.io is an official Google CSS partner and can help you get better shopping results, hassle-free testing, and many other benefits.