As you may have read in our previous post a few weeks ago, The EU recently hit Google with a $2.7bn fine for abuse of its dominant position in the search engine market and for what it considered to be violations of EU antitrust laws.
In short, regulators ordered Google to cease promotion of its own shopping results over competitors, as it was felt that they were monopolising the market in Europe for shopping comparison.
Off the back of this penalty, Google were given until today, Thursday 28th September, to comply with an EU antitrust order for it to provide equality in how it shows competitors’ comparison shopping sites within the search engine results pages (SERPs) – think Kelkoo, Price Runner, Shopzilla etc.
Taking it to the wire, Google announced some changes on their AdWords blog on Wednesday that may or may not placate the powers that be in Europe.
Shopping is a hugely utilised channel and a big revenue driver for Google, following massive growth in the last five years. This, combined with the fact that Google wants to avoid losing revenue, facing a big fine or impacting user experience, means that Google has been working away in the background for the last couple of months on a proposal that should help avoid the above and appease the EU regulators.
The main element of said proposal will be to allow price comparison sites to advertise within Google Shopping. This is a pretty big step in some respects but you can possibly think of this as just opening up the auction to further advertisers and in the case of these advertisers, adding an extra step into the purchase funnel in some cases.
What do the changes look like?
To the everyday shopper and Google user, the changes will likely be fairly inconspicuous. You can expect to see (if you’re not seeing it already) an additional line of text to appear with a shopping ad saying “By Google” to illustrate that the ad is a Google merchant result. It’s important to note that currently this only appears on the carousel or right-hand ads on the main SERP and not on the specific shopping page.
What’s the potential impact?
It’s difficult to predict anything at this stage, but from the consumer’s point of view these changes should ultimately lead to a greater choice of products and pricing, so in that respect the impact should be pretty positive.
For advertisers and agencies though it may be a less positive story as ultimately this change could lead to greater competition in the auctions. This, therefore, has the potential – in theory – to increase cost-per-click (CPC) in Shopping campaigns. Only time will tell.
And what about the big G? Well… as I’ve already said, increased levels of competition may push CPCs up. Coupled with additional, new advertisers in the mix, this has the potential to boost revenue levels further for Google. All of this is also reliant on the EU regulators accepting these changes as rectification of the monopolisation that they see, with worst case scenario for Google being rejection of these changes and further huge fines.