Of all the great match-ups among tech’s Fantastic Four — Google, Apple, Facebook, Amazon — it’s Google versus Amazon that’s becoming the most fascinating, and not because of who has the better tablet.
Quietly, Google has been retooling in a bid to beat Amazon as the place to shop — and some early evidence suggests the search giant isn’t crazy to try.
In a survey released today, Google’s transition last fall to all-paid product listing display ads in search results is paying off. (These are the product photos that show up next to price and seller info at the top of “organic” Google search results for products, such as at the top of this search for “iPhone 5.”) Digital ad management provider Marin Software found that advertisers managing $4 billion annually in online ad campaigns through its platform spent 600 percent more on Google product listing ads after the change in October than before. That result alone doesn’t necessarily surprise: If Google says pay to play, advertisers have little choice.
But they may be paying gladly. Marin found that the paid product listings were turning up more in Google search results, especially around the holidays, which means advertisers’ products are getting seen more by potential buyers. And that visibility is translating into action: Marin says click-throughs on product listing ads have increased 210 percent since last year.
(Marin also is releasing a new product today to help advertisers manage Google paid product listing campaigns, though the company says it has no strong reason to show bias toward Google, since advertisers also use its software to manage campaigns on competing sites such as Yahoo, Bing and Facebook.)
When Google announced its plans to require companies to pay to be listed in product searches, critics and competitors complained the change would hurt consumers by tainting the objectivity of the search results. While the results may now be plainly biased, Marin vice president of marketing Matt Lawson says users are responding to the paid listings more because Google is putting more effort into them.
And so are advertisers, who had less incentive to care about the quality of listings they got for free. “As soon as it became clear they were going to be paying for them and contributing a significant amount of their budget to them, then they became interested in managing it,” Lawson says.
What does any of this have to do with Amazon? Lawson and Marin Software CEO Chris Lien say that online shoppers today tend to start in one of two places for product information: Google or Amazon. In effect, Amazon has become a “commerce search engine,” which cuts into Google’s core function. To compete, Google wants to give shoppers every reason not to go straight to Amazon by becoming as reliable a destination not just to learn about products, but to buy them.
“What you’re going to see them do is do everything they can to enable marketers to sell through their platform,” Lawson says.
Not that Google likely plans to set up its own warehouses, he says. But he adds that the days when merchants see Google as a conduit for clicks to their own sites is fading. If Google can package the sale from search to checkout, merchants can handle the inventory and shipping themselves. If Google and retailers — especially brick-and-mortar Amazon competitors — can come together in that way, suddenly online shoppers have another broad, deep Amazon alternative.
At the same time, Lien says, the competition between Google and Amazon isn’t all-or-nothing. Shoppers are too smart for that.
“Consumers are looking on Amazon and they’re looking on Google,” Lien says. “I think most thoughtful consumers are to take the best deal.”
Homepage photo: Halilgokdal/Flickr
