• Laney124

    Hmmm, so my client who is not allowed to advertise in Adwords but successfully uses Merchant will now have to run Shopping through AdWords – I’m thinking that this will no longer work in his favor.

  • Laney124

    Any observations in regards to this would be greatly appreciated.

  • robthespy

    I don’t pay for garbage!

    The end.

  • Shant Melkonian

    You want a prime example of how this is going to be bad for the merchant and bad for the consumer?  Search for a product on Yahoo Shopping (which is a paid inclusion service).  9 out of 10 products search results only show Amazon.com…  And that is because it’s too expensive for the smaller guys to pay for those clicks.  This change will force merchants to raise their prices to cover this new expense and in turn that means higher prices for consumers.

  • http://twitter.com/bizwatchlaura Laura Thieme

    Danny, remember when we had these conference sessions on Froogle? I was on the panels, and yes, I remember the days Google said “they’d NEVER charge for Google shopping”.  I also understand the need for companies to monetize, and to cover the costs for providing services that were previously provided for free.  

    Recently, Google’s SERPS for retails product listings have become cluttered.  Between PLAs, Product Extensions, text ads with site extensions, Google Product Search/Google Shopping, the page has become busy, and from a retail perspective it’s hard to stand out except on price, selection.  

    Knowing the resources that must go into managing tens of thousands of merchants feeds with thousands of SKUs, daily updates, sometimes more often, I understand the need to monetize Google Shopping.  
    What I don’t like? Paid inclusion.  Never liked it.  Paid inclusion previously offered no keyword data, just URLS and clicks.  That was it, maybe average rank.  Remember the days of Jim Stob’s PositionTech and paid inclusion for then MSN and Yahoo.  If you wanted to optimize paid inclusion, you just couldn’t because there was no keyword optimization.  You often showed up for keywords you didn’t want to show up for, but retailers couldn’t really control it, or fix it.  Thus, paid inclusion became less profitable, and eventually companies went away from that model.

    I see a bigger problem here – I see four ways Google is going AWAY from keyword detail. First it was SEO and Google Analytics (not provided).  Then it was by offering Product Extensions & Product Listing Ads, that if they showed conversion data, they lacked keyword detail.  This is for PPC, not organic/Google Shopping.  

    Lack of keyword detail, high costs, and not being able to replicate or determine why the costs are so high in PPC/Google PLAs and poor revenue, means retailers may have to pause or get rid of PLAs.  

    Recently, a Google rep led us where to find the obscure keyword data on PLAs, which had incurred very HIGH ad costs, horrible conversion rates, we realized Google was showing our client for non-relevant keywords.  YEP – that’s right NON-RELEVANT.  The king of relevancy was showing a PLA campaign with 5 keywords, on unrelated products.  We couldn’t replicate the problem either which was odd.  I’m preparing the data for a refund request, and perhaps to present at SMX this Fall if possible.  If Google Shopping, PLAs, Product Extensions does get consolidated in some way, so that it could all be part of PPC/Adwords, and keyword detail can be provided in the regular text ad format, then retailers can optimize their paid feeds for a profitable ROAS, so it could be an improvement.  But, without keyword and cost of conversion detail, not only is paid inclusion wrong, but it presents one more challenge for retailers to figure out.

    Of course, it’s not a surprise regarding their timing.  They updated the Google Merchant feed requirements last fall, around late September.  This was too late for many retailers to respond, as they were neck-deep in preparation for holiday season, updating their platforms.

    The latest this should be launched is July 1st, that gives retailers time to prepare,update and potentially re-allocate their budgets, not to mention update their feed requirements.  

  • http://searchengineland.com/ Danny Sullivan

    Paid Inclusion doesn’t mean that there’s no disclosure. Disclosure is required by FTC rules, and Yahoo had it in the way that was required. Paid inclusion means exactly what I described and quoted the FTC on above in the story.

  • wanowrie

    But they are clear that those listings are ads (written next to listing). And they have visually different background. Thats enough for anyone with more than 50 IQ to see its paid content. I don’t see anything evil here.

  • http://twitter.com/rajesh_bansal Rajesh Bansal

    any connection with Junglee.com?

  • Alan

    Google crossed that Do no Evil line a long time ago!

  • http://www.kaushalam.com/search-engine-optimization.html Kaushalam

    So, what about the existing products listed in Google Merchant Centre, it couldn’t been shown now on Google product search?

  • http://twitter.com/_asheridan Andy Sheridan

     You really think Google would have trouble funding the service?

  • http://twitter.com/nguyen_nico Nicolas Nguyen

    This is a very bad move for small industries :(.

  • David Rothwell

    This has *always* been on the cards, always. Anyone who couldn’t see it coming has been blind.

    This is all about value.

    Clicks have value. Google know the value of a click better than any organisation on the planet.

    If you don’t want clicks, don’t bother having a website, or an AdWords account.

    If you don’t want to sell stuff online, forget about Google.

    You too, absolutely have to *know* the value of your clicks.

    They are absolutely right that a commercial relationship is critical to this – too long has there been so much junk around that people can’t be bothered clearing it up because “it’s free” (well, actually, that’s misguided anyway, nothing on the Internet is “free”).

    Why do you think G gave us Conversion Optimizer?? So *you* could call the financial shots, not them. What did they get in return? Commercial DATA. The value of clicks and Sales.

    I call it “Follow the Money” – earn more than you spend, then spend it all.

    In Jerry Maguire, it was “Show Me The Money!”
    http://www.davidnrothwell.com/commission-only-adwords-management-show-me-the-money-4021/

  • http://www.alexseo.se/ Alexander Edbom

    It’s not about the profit, read the comments again..

    It’s about Google doing just anything to become number one and earn more money instead of providing great userfriendly services as they used to.

    They now fight about the first place with:
    Apple
    Amazon
    Microsoft
    Facebook
    + more

    Trying to become best at everything, letting organic searches become less relevant. Searches should not need to scroll down to page 2 to find what they are searching for if they don’t want to see what Google advertisers want them to.

  • http://twitter.com/markadoi84 Mark Hughes

    Hi Danny, thanks for the write up.  Noticed that there is a broken link about half way down:

    “Google provides more details about this and the forthcoming transition here.”

  • http://twitter.com/IanLockwood Ian Lockwood

    I totally agree with Dave’s analogy of the high street – the cost of listing in GPS will now be too high for many small businesses because the CPC model favours big brands. Not just because they have the budget and the margin through their buying power/supplier abuse/price-fixing (delete as appropriate for your moral viewpoint), but because they have better conversion rates thanks to the budget for development and testing and more importantly, the recognition of the brand as “trustworthy”.

    A small retailer unheard of by the consumer until they click through a GPS ad sells the product for the same price delivered as Amazon/Tesco etc. I’m willing to bet a significant majority of consumers buy from the big brand regardless. Lots of data exists to suggest consumers are willing to pay a (slight) premium from big brands because of the perceived trust/customer service. Combined with the likely ability of the big brands to discount/buy cheaper, what chance does a small retailer have once they start paying for low-converting traffic!?

    Cue the Walmartisation of of e-commerce…

  • http://twitter.com/dergal Gerry White

    Google has been all about the money for 5+ years, I can’t easily tell the difference between the PPC and the organic on a page (same colour) Google have gone from being the do no evil company to actually quite a slimy corporation that have done some quite nasty things from vandalizing competitors maps (open map project) to mis-representing partners. the confusing thing is that geeky Joe Bloggs on the street sees them as still being whiter than white, whereas Microsoft and Facebook are somehow the enemy… 

  • Jonathan Elder

    Totally agree. We will see smaller companies disappearing, as well as lower value products. I work with one company that sell automotive bulbs. Average sale and margin are low, so adding an additional cost to get traffic they currently get for free will probably force an increase in prices.

  • brad

     http://jcwhelan.com

    really good post keep updating all  the search engine updates.

  • http://blog.karlribas.com Karl Ribas

    This will certainly make it very difficult for true small businesses to compete. Aside from having to contend with a second pay-to-play model, there is very little real estate left above the fold to justify the spend on SEO initiatives.

  • Thomas Meyers

    FaceBook thought they were the greatest thing ever, I quit that waste of time when they added that stupid timeline and so did millions and millions of others. Maybe a search engine will come along that only caters to small business and only has organic listings. If so I would use it. Google is getting greedy and pushy the highest bidder on us, maybe Bing is better?

  • Durant Imboden

    A search engine that caters only to small business? I wonder how successful that would be. Google’s success comes from catering to users, and I can’t imagine that the average user cares whether a little product photo with a price next to it is a freebie or an ad. 

  • http://twitter.com/devdotcom Devin Poole

     The point here is that Google is the hypocrite.

  • andrekibbe

     @pdxuser:disqus You’re comparing a commission structure to paid inclusion. With Amazon, you’re getting a sale before you pay a cut. There’s no grey area whatsoever. With Google Shopping, you’re paying for inclusion into search results where, as Danny indicated, your visibility isn’t guaranteed—unlike AdWords. It’s the worst of both worlds: the cost liability of AdWords and the indeterminacy of the organic listings. This is clearly designed to nudge merchants towards buying AdWords.

  • b_double_u

    This is awesome. Now Amazon will either have to pay  a huge sum of money or stop advertising! This will reduce the cannibalization of the smaller companies that have made the poor poor decision to align themselves with the giant. I am sure that everyone’s market share will increase, as will their sales and profit margins. For them it will be simply diverting the 15% Amazon fee to Google, through the paid platform. It will also greatly increase their brand recognition.

  • http://twitter.com/Winooski Winooski

    Solid analysis Danny, per yoozsh. And yes, all publishers should feel a chill wind blowing on their necks.

    Issues of hypocrisy aside, I’m thinking this is a classic supply and demand curve issue. At this late stage in the game, the quantity (along the X axis) of the supply of the listings has become so huge that the equilibrium point where it meets Google’s demand for the listings has fallen into the negative side of the price (along the Y axis). 

    With this new “negative Y axis” equilibrium point, instead of there being a price that Google would be willing to pay for these listings (“pay” meaning “host & serve for free”), there’s now a *negative* price that Google’s willing to pay…i.e., the overwhelming supply of the listings has naturally flipped things around so that Google would be crazy not to charge for them.

    Musicians in big markets such as LA are quite familiar with this phenomenon. In the old days, you might be able to make a living from the gig money clubs would pay. Now that there’s such a glut of new bands in these markets, it’s becoming more the norm for the bands to have to *pay* the clubs for the privilege of playing. As with Google Product Search, it’s a case of the supply and demand curves at work.

  • http://twitter.com/devdotcom Devin Poole

     How is Google catering to users here? That doesn’t make sense. Google is catering to their wallet.

  • http://twitter.com/devdotcom Devin Poole

     No. Amazon can afford to pay. So can other big businesses. This will not help smaller companies.

  • David Christian

    Another aspect of this which has not been discussed is how it will affect merchants that sell products that Google doesn’t like – namely products such as tobacco, firearms, ammo etc…  These products are all 100% legal yet Google discriminates against them with their Adwords and now they will be, I assume, excluded from Google Shopping.  I would gladly pay Google for running my shopping feed but now is it going to be a constant battle with them rejecting every item in my catalog that some reviewer at Google finds “offensive”, but is on display at every Bass Pro Shop in the country?

  • b_double_u

     I disagree with you. Amazon has been stealing sales form the little guy for years. Simply by listing the merchants content, images and price in the same exact place as they were submitting to themselves (Froogle). Now, Amazon will be forced to make a decision on whether or not to advertise that particular item using PLA. With their larger than normal catalog, it will be more difficult for them to maintain at a profitable level and therefore their ads will be pushed down or turned off.

    The smaller company will get the sale directly and bypass the amazon fees and it will help grow their email marketing channel as they will now have the addresses and direct contact information. It will also help the “AOL Users” who only use Amazon “because they were told to do so by their 15 year old nephew” to understand the internet more and they will become more savvy and maybe a little more understanding with how the real world operates.

  • http://www.facebook.com/people/Prasad-Kongara/100001591732563 Prasad Kongara

    Proper ‘disclosure’ is at the heart of whether such ‘paid inclusion’ is ‘evil’ or not. From the consumer point of view, the ‘evil’ kind of paid inclusions were
    those that were served in-distinguished from natural
    search results. I don’t see any problem with Google serving these paid
    entities clearly marking them as ‘sponsored’.

    In fact, to me the phrase ‘paid inclusion’ makes no sense at all in this context. It implies that there is a ‘free inclusion’ which is not the case here.

  • http://searchengineland.com/ Danny Sullivan

    No. Google was opposed to paid inclusion and considered it evil, at the time it made its statements, because it didn’t think it fairly allowed for all businesses to be comprehensively represented. They labelled it that way, as I explained and as I remember from having documented all this at that time. It was not an issue of disclosure.

    Separately from the “is paid inclusion evil” debate that Google itself started, paid inclusion is not defined by a lack of disclosure. It’s defined by whether you pay to be listed without a guarantee of ranking well. Again, see the article above.

    There is free inclusion, which is how many other Google products work, including web search. It was a principle that Google had previously lobbied that all its products should have and criticized its competitors when they had paid inclusion. It clearly no longer has those criticisms.

  • http://twitter.com/devdotcom Devin Poole

     I hear what you’re saying. You made valid points.

    But… even if Amazon turns off ads, can the little guys afford to pay for those slots?

  • http://searchengineland.com/ Danny Sullivan

    Thanks! Got that fixed.

  • http://www.webstatsart.com/ Webstats Art

    1. Become the first to scrape or get content or get supplier info. 2. Help some people make money for a few years for free 3. Make everyone pay in the end.

    The principles are that you need to scrape first or get the info first. The ones who do it first are legit. The people who are too late are content farms and spammers. 

  • b_double_u

    Yes because $0.10 is much cheaper than a $25 commission on a sale.
    If your PPC advertising is not equally as profitable as your SEO side, then you are doing something critically wrong.

  • b_double_u

     David, that is a great point. You can’t even pay to play if you want to. Or it’s a constant uphill battle. I have had that fight before with some sites and it’s even similar to the ongoing Trademark battle. I have products the aren’t being shown because they have a trademark in them. the funny part is that the trademarks are ridiculous. Here are some examples.”…” (the ellipses), or “fresh” (how do you even trademark the word fresh?), “ID” (really, a very common acronym?)

    Now, you will be subject to an entire onslaught of new rules.

  • Troy Olson

    Does anyone know how this will affect a vertical like selling guns and ammo on line? Or E-cigs?  You cannot do paid advertising for these in the search vertical, but they do currently show up in the shopping results.

  • http://twitter.com/CPC_Rick Rick Backus

    Troy – That is a great question. I would imagine that Google will not allow you to pay for that traffic. 

  • donzap

    Given that many who use the web to perform research value the word free, as in free listings, it will be interesting to see how these changes work out.

    Many small businesses have struggled to obtain high organic search results because they can not afford to pay the PPC charges that big brand corporate entities can. Seachers also understand that a big budget doesn’t mean the search results in paid categories will be relevant.

    Personally, I suspect that Google will face a tremendous backlash from searchers, consumers and middle and small businesses if Google curtails free search listings, overly limits or even eliminates free search results for non-product searches.
     
    The recent search algorithmic search result changes Google rolled out including Penguin have really ticked-off a lot of people who depend on web searching to promote their products and companies. I’m thinking that there are enough people who dislike what Google is doing and their direction that we might see a push towards Bing to an extent that may be surprising.
     
    In addition, Google might want to take note that if they abandon those who prefer using free or natural listings, Google may find that new search competition will be on the horizon – and why not?

    Google is reversing their stance on what is ‘evil’, has violated privacy, and the list goes on. I think it will be fun to see if Google gets its feathers trimmed by the people who use search as they will likely be the ultimate deciders as to what will and won’t fly. As a result, it will be interesting if Google learns that a grass-roots movement doesn’t just apply to politics.

    In fact, if Googles direction continues, they may find that they have shot themselves in the foot.

  • MaryEJ

    Eventually what Google’s tricks are going to accomplish is that all small businesses will need to go back to local brick and mortar shops and change their marketing completely. Anyone who is making a living and just supporting their family based on an online store will end up losing their business. Small businesses are already having to pay for IT help and marketing help to try and keep up. Paid services for SEO, websites, mobile sites and social sites are already a dig into their profits. Now Google is asking for paid inclusion? Some businesses are barely making it… and we all know the condition of the economy. It will be the end of millions of small businesses online and it IS EVIL of Google to start this up now when everyone is just trying to keep their heads above water. 

    No good can come of this. It is a type of censorship, IMO. I don’t want to only see the big boy’s products. I want my options and I don’t want to have to dig deeper to find them. The internet is everyone. Not just those with more money. 

  • Durant Imboden

    I didn’t say that Google is catering to users in this instance. (As I said, users aren’t likely to care one way or another.) I was responding to the remark: “Maybe a search engine will come along that only caters to small business.” Fact is, Google Search doesn’t exist to help business owners sell things. Google Search exists exists to help searchers find things. If 50,000 thousand vendors are selling identical Cisco routers, Canon cameras, or Nike running shoes, does it really matter (from a searcher’s point of view) whose product listings get shown or how Google decides which merchants’ results get displayed? I think it would be hard to make a convincing argument that it does.

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  • http://www.facebook.com/abhiktheone Abhik Biswas

     Google is going craze lately. So much of changes in last couple of months.
    I guess they going to integrate almost everything into Google+

  • odysseynewmedia

    I agree with the other comments, this will definitely squeeze out the small retailers who won’t be able to pay for inclusion . Unfortunately the big fish will always afford to pay and the small
    companies will fade away, this definitely gives less consumer choice
    through search. I do think this was inevitable from Google because of the sheer amount merchants it has who are reliant on Google Product search as a revenue channel. Google can afford to lose some smaller merchants and instantly increase it’s revenue from those merchants who are willing to pay for inclusion.

  • http://pulse.yahoo.com/_VMQNBJRXQJ3U775KGWMR3FMXIQ Korr Mett

    Do you mean scrape the inventory from retailers and provide product search as an aggregator?

  • Durant Imboden

    Will it really change things so much? It seems to me that, one way or another, merchants who want to compete effectively need to invest in making themselves visible: if not with ads, then with SEO. From Google’s point of view, what’s not to like about encouraging merchants to spend their money on advertising instead of on link-buying and other SEO ploys?

  • odysseynewmedia

    Check out the new Google layout – http://www.ppcblog.co.uk/seo/google-testing-new-look-serps/, Google is increasingly trying to take CTR away from SEO results.  Only the top 3 SEO results will have any significant CTR in future. In addition, many of these small merchants either a) don’t understand SEO in order to do it themselves, b) don’t have time to SEO their sites properly c) can’t afford to pay for someone experienced to SEO their website. SEO has changed compared to what it was, eventually all SEO listings will be completely personalised and only the people who can affford to pay for ads will display for improtant searches.  So you see, there will be a significant percentage of small retailers will get increasingly forced out and their visibility will suffer.

  • Troy Olson

    That is my thought as well.  It’s a wild wild web out there!

  • Durant Imboden

    The smart retailers won’t get forced out; they’ll just learn to profit from the tools that are available to them, as retailers did when AdWords and AdSense were introduced, when Amazon developed its Marketplace, when eBay came along, and so on. The expression “for every door that closes, a new door opens” may sound like something from a self-help book, but in this context, it contains a grain of truth.