How you can reduce your Google Shopping costs by 20%

As an online retailer that advertises its offers via Google Shopping Ads, you can reduce your advertising costs by around 20 percent. This is made possible by a restructuring of the Google Shopping price search engine, which Google had to implement as a result of a competition fine imposed by the EU Commission.

What was the ruling against Google about?

The European Commission has fined Google € 2.42 billion for violating EU antitrust rules. Google has abused its market dominance as a search engine by giving another Google product, its shopping comparison service, an illegal advantage.

As a consequence, Google spun off the Google Shopping price search engine and opened it up to other price comparison portals (Comparison Shopping Service, CSS for short). Since then, Google Price Comparison has had to book advertising space on Google Shopping itself and is therefore in competition with the other price comparison portals.

In Google Shopping ads, this change can now also be seen directly visually. In addition to the product information at the top of the ad, there is now also information in the form of a link at the bottom about the portal from which the ad was placed. If the ad is from Google itself, the text will read „from Google“; if the ad is from a Comparison Shopping Service (CSS), its name will be there. By clicking on the text, interested parties are taken directly from the web search to the advertiser’s portal.

How can online retailers save on Google Shopping now?

For you as an online retailer, the visual aspects are less interesting than the changes to the auction for the ad spaces. As is usual with Google Ads, the available ad spaces in Google Shopping are auctioned off to the highest bidder using a bidding process.

As it is no longer just Google itself, but also other price comparison portals (CSS) in the European Economic Area that can post Google Shopping ads, there is now open competition in the auctioning of ad spaces. There is a considerable cost difference when online shop operators have their ads displayed via Comparison Shopping Services (CSS).

If the ads are placed directly via Google Shopping Europe (GSE), i.e. „via Google“, the search engine takes a margin of around 20 percent. Finally, the remaining 80 percent of the amount is used to bid for the advertising space. This margin to Google does not apply if you place your ads via other price comparison portals.

In concrete terms, this means that an online retailer provides Google with 1 euro per click for the placement of advertisements in Google Shopping Ads. Google retains 20 cents of this amount and uses the remaining 80 cents to bid on the available ad spaces. Another online retailer also provides a Comparison Shopping Service (CSS) with 1 euro per click for the placement of advertisements in Google Shopping Ads. The price comparison portal does not deduct a margin from this amount, but bids the full amount of 1 euro on the available ad spaces. This results in a price advantage or cost saving of 20 cents for the online shop operator.

All other parameters remain completely unchanged. You place your ads as before via your Google Ads account. Your Merchant Center will not be changed either. You simply save 20% per click.

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