The recent European Commission ruling that Google must pay a record fine “by giving an illegal advantage to … its comparison shopping service” in search results poses some interesting questions. The tech giant is faced with a £2.1bn fine and 90 days to end what have been labelled as “anti-competitive” practices.
The evolution of Google Shopping came as a natural expansion of its paid advertising offering. The inclusion of product images in the SERPs was a no-brainer and clearly beneficial for retailers. After all, we’re visual creatures. From the early days of PLAs (Product Listing Ads, before being rebranded as Shopping) it was obvious this medium provided huge growth opportunities for advertisers. Paid strategies evolved to account for more effective performance on Shopping over traditional generic text ads.
On one side of the coin, you can argue this is Google’s platform and it is at its own discretion as to the services it offers. Google obviously will favour ads that will generate it revenue, anyone can spot that a mile away. However, Shopping ads do also provide a way for advertisers to promote their products in a more real-time fashion then Organic ads would.
Conversely, there is no knowing of how Google’s algorithm exactly works and ask as you might, you’ll never be told. Maybe it doesn’t even know. But it is possible that Google may not offer as level a playing field on Shopping for potential competitor portals such as Amazon and eBay.
Either way, the more pressing question is what could happen next? Here are some possible scenarios that may occur, assuming this ruling holds and/or Google doesn’t just decide to pay a fine of up to 10% of its annual revenue.
Mobile SERPs Evolve
One key argument is that Shopping ads dominate the space on mobile. And with mobile search volumes now in the majority, this is a key area for Google. Above the fold will be dominated by Shopping and Paid ads, with Organic at least a scroll away.
As a workaround, Google may look to reduce the size of its Shopping images. When PLAs first came out these were much smaller. While they were still at the top of the mobile SERP, they didn’t dominate the entire page. We may see a return to this past format, to allow for Organic results to be more prominent again.
The algorithm is updated
If the shopping results are being swayed by who the advertiser is, Google may have to be seen to play ball a little more. So, we may find listings for Amazon, eBay and similar Shopping portals appear more often. That would appease the perception of an equal playing field.
In turn, what impact would that have on regular retailers? They may find their impression share on Shopping drops relative to their current spend levels
The impact for advertisers
Any changes made that dilute Shopping’s presence in the SERPs will have a knock-on effect for advertisers. Retailers in particular should be prepared for a potential reduction in engagement in their Shopping ads relative to the current performance levels they are seeing. In particular, mobile would be hit hardest. So any retailers with a low AOV may find mobile revenue on Shopping drop.
It will be intriguing to see how Google responds to this announcement. An appeal could be imminent before it’s forced into making any changes to its product.
What are your views on what this could mean for the presence of Shopping ads?