Google granted external product searchers access to prominent ad space in Google Search after the EU competition fine of billions in September 2017. Our Google Shopping specialists report on the current role of CSS Shopping.
Google Shopping continues its rise in popularity as an ecommerce channel. Search engine results pages display shopping ads that show users products that match their search query. Google is working feverishly to develop the feature in order to compete with Amazon as a sales channel. Initial tests of “Shopping Actions” in the U.S. showed that Google allows direct purchases to be included in search results.
Google made it possible to compete for popular Shopping ads that were linked to external product searches. This was done under pressure from the European Commission in 2017. It was previously possible to only book ads through Google’s “Google Shopping” service. Things have settled down after an initial uproar within the industry.
Let’s take a closer look at the evolution of CSS shopping.
GSE vs. CSS: The opening of the shopping monopoly
It was a drumbeat for price comparators, agencies and advertisers: Google is decoupling its Google Shopping service, which was previously integrated into web search, and opening up the auction for Shopping ads (formerly Product Lising Ads) to external product searches. Because “Google Shopping Europe” (GSE) charges a margin on the click prices, advertisers can save massively if they look for another CSS partner. The GSE margin does not appear on any Google invoice and therefore cannot be determined with one hundred percent certainty. However, it is an open secret in the industry that Google retains up to 20 percent of the click price as margin.
Through an incentivization program called SpendMatch, Google also offered financial rebates in Ads accounts when advertisers deployed certain media budgets through external CSS. In combination, the two measures offered advertisers enormous potential savings. Advertisers could collect a monthly credit of up to 32,000 euros.
Google discontinues SpendMatch and tightens the CSS reins
As many experts predicted, Google discontinued its expensive SpendMatch startup program at the end of 2018. Boosting competition had taken its toll: The “Comparison Shopping Partners” page was bustling with countless CSS providers, and in the search results, instead of “From Google,” the name of a CSS provider was increasingly displayed under a shopping ad.
To keep the proliferation of CSSs in check, Google quickly tightened the requirements for CSS partners. Since September, a CSS must have at least 50 merchants on its platform who deliver to a target country in order to be approved for CSS shopping in that country. Google may soon also tighten the reins on filtering and navigation features on product searches to further push the quality of CSS Shopping approved price comparisons.
On the CSS partner side it became again clearer. While there were over 100 CSS partners on the site, there are currently 46. To be a designated CSS partner, a product search must now have over 100 merchants under contract who display shopping ads via CSS. For premium partners, there is even a limit of over 500 merchants.
Is CSS shopping still worthwhile for advertisers?
Even though SpendMatch is now history, the GSE margin still exists. So theoretically, advertisers have to pay up to 20 percent more per click if they place a shopping ad via GSE instead of via a CSS partner. In practice, of course, CSS operators also get paid for their services. After all, operating a product search, programming costs and the service provided to retailers on the platform are not a matter of course. Depending on the provider’s billing model, there may be an agreed, fixed fee per month. Percentage models are also common, in which an agreed share of the media spend flows to the CSS operator.
The costs charged, as well as the quality of the CSS providers, differ greatly in some cases, especially with regard to support. However, compared to the margin charged by GSE, the costs for external CSS use are lower in most cases. For advertisers with a manageable budget, it is nevertheless important to check carefully whether working with a CSS partner is worthwhile, or whether fixed fees might eat up the savings on the GSE margin.
Linking accounts: Full Switch vs. Association
To play Google Shopping ads through a CSS partner, there are two ways to switch a previous GSE account to CSS. Advertisers must choose between Full Switch and the Association model.
With the Full Switch, an advertiser’s Merchant Center Account (MCA) is fully integrated with the CSS partner’s Multi Client Merchant Center (MCC). There are some technical aspects to consider when making this move. For example, if only a sub-account is moved rather than the full MCA, access rights may be lost during the move. A positive aspect of the full switch is that the CSS partner has insight into the product data, can identify the causes of problems himself, and there is transparency with a percentage-based payment model. However, the dependency of the advertiser on the CSS partner is higher than with the simple linking according to the association model and requires trust between both parties.
If an advertiser chooses the Association Model, its MCA is linked to the CSS partner in a relatively straightforward manner. In this case, the advertiser’s setting can remain unchanged, and the effort required to move is minimal – in fact, all that is needed is an email from the CSS partner to Google requesting the switch. If only a sub-account from an MCA is switched, the same risks of loss of access rights apply as with the Full Switch. The advantages of the full switch method just mentioned (full access and insight into the product data by the CSS partner) do not come into play here straight away. However, the CSS partner can be given access to the customer account or data feed via appropriate user invitations or by setting up an API interface.
In terms of handling and cooperation, Full Switch and Association hardly differ. It is more a question of trust, control and flexibility whether an advertiser moves its entire account to the CSS partner’s MCC or “docks” via Association. Another method is to create a CSS subaccount: Opening a subaccount directly with a CSS price comparator is a good idea if you want to work with more than one CSS price comparator. This does not require any verification from Google. Nevertheless, the product links must lead to the target address in the web store stored in the subaccount.
Which strategy is better: GSE, CSS or both?
CSS shopping opened up new strategic playgrounds for advertisers. Companies were faced with the decision to shift their entire budget to CSS Shopping, to use GSE and CSS in parallel, or to do without CSS altogether. CSSs have clearly picked up speed, but they are still by no means dominant compared to GSE.
This is probably mainly due to the many smaller merchants for whom CSS use is not worthwhile because CSS fixed costs exceed the savings that depend on the mediaspend. However, some advertisers also run parallel campaigns via CSS and GSE. The disadvantage of this hybrid strategy is that the identical campaigns have to be maintained in two different Google Ads accounts.
There is no generally valid recommendation. The benefit of CSS Shopping depends not only on the amount of money involved, but also on the advertiser’s strategy. For example, those who want to displace their competitors can feed their ads into the auction via GSE and several CSS at the same time, thus generating high advertising pressure. On the other hand, those who are driven by efficiency should rely exclusively on CSS.
CSS Shopping is here to stay
While the lifespan of CSS Shopping was unclear at the outset, there is now much to suggest that its future is secure. The pressure from the EU on Google continues to increase. The fact that GSE is still represented significantly more often in search results than CSS partners shows that there is still room for improvement. Google is therefore well advised to continue to motivate third-party product searches to be present in the Shopping ads. Google is doing this, for example, by developing formats such as Comparison Listing Ads (CLA), which are specifically intended for CSS partners.
Those who are still relying on GSE due to uncertainty should look into CSS now at the latest. Because the topic is here to stay. What remains challenging is the short notice with which Google informs about changes. CSS providers and advertisers need to be proactive and far-sighted in order to remain successful in the CSS jungle in the future.