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Will Merchants Benefit from Proposed Changes to Google Shopping Ads?

The significant and very profitable change Google made to Google Shopping altered that service to only displaying paid Product Listing Ads. It’s a change that made European Commission regulators concerned enough to add it to its investigation of Google for possible antitrust violations.

Those investigations started November 2010 and focused on four areas of concernabout business practices that could be construed as violating laws that prohibit “abuse of a dominant position.” These practices include pushing search results from specialized search engines, such as those focused on hotels or restaurants, lower on Google’s search pages or on subsequent pages.

Google was informed of the findings of the investigations in March 2013. Ecommerce pros likely recognize the issue immediately. Being outside of those “top of the fold” results, particularly the top three search listings, reduces the likelihood of a given search result being viewed or clicked.

Google has responded to these concerns with proposals to address each area. Their first response in October 2013 was deemed “not yet sufficient to fully address the Commission’s competition concerns.” Google has since provided a second improved offer.

Google’s latest offer as it relates to its Product Listing Ads practices could mean searchers may see a results page similar to the screenshot shown above that shows Google Shopping results alongside non-PLA advertisements.

In Google’s proposal, according to the European Commission, the remedy for this part of the listed concerns would be as follows:

  • Users will be informed by a label of the fact that Google’s own specialised search services are promoted.
  • These services will be graphically separated from other search results, so the distinction with normal web search results will be clear.
  • For relevant specialised search services, Google will display prominent links to three rival specialised search services in a format which is visually comparable to that of links to its own services. For instance, if the Google links have images, the rival links will have images as well, including on mobile devices.

While it’s unclear how the proposal will impact Google, it could be significant. Analyst Sue Feldman of Synthexis estimates that as of 2011, 97% of Google’s revenue was ad-driven.

Some online merchants may welcome an opportunity to appear on Google Shopping results without paying for Google PLAs, but the exposure will still come at a cost through other paid platforms such as comparison shopping engines, which may be among the biggest winners in the proposed scenario.

Google’s travails with the European Commission follow those of other prominent American technology companies, particularly IBM, Apple and Microsoft, the latter having spent considerable time embroiled with controversy regarding its Internet Explorer web browser practices and implementations.

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David A Utter
David A Utter
David A. Utter is a freelance writer based in Lexington, KY. He has covered technology topics from search to security to online business and has been quoted in places like ZDNet and BusinessWeek. He considers his appearance on NPR's "All Things Considered" with long-time host Robert Siegel a delightful highlight. You can find him on Twitter @davidautter and on LinkedIn.