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Will Google’s Latest Shopping Actions Changes Help It Better Compete with Amazon?

In alignment with other changes made this year, Google announced last week that it will be transitioning its current paid Shopping Actions program to Buy on Google, a 0% commission advertising opportunity. Advertisers currently using Shopping Actions will be invited to migrate over the next few weeks, while new merchants must join a waitlist.

New changes improve cost, ease of entry, and advertiser control

The most eye-catching change with Buy on Google comes in the form of cost. Previously, commission on Shopping Actions ranged from 5 to 15%, and was dependent on an item’s Google Product Category and a seller’s rating. These costs could be cumbersome for advertisers, especially in cases where Google’s rigid Product Category taxonomy did not quite align with a seller’s items. A 0% commission rate is much more straightforward and obviously easier for an advertiser to stomach, regardless of product category.

Google also made onboarding easier and more flexible for advertisers with integrations across major providers like Shopify and Paypal. A major onboarding project for Shopping Actions had been order management, which retailers can now handle via Shopify. Google is also now accepting various feed formats to make onboarding even easier for advertisers not currently using the Google Merchant Center.

Finally, advertisers will now be responsible for customer service. On the surface this seems like more work for the advertiser, but in reality it addresses a major concern that some established brands previously had with Shopping Actions. Retailers that pride themselves on strong customer service had no opportunity to uphold their own standards for customers; with the updated Buy on Google, they can control that quality of service.

Google continues to up their game to compete with Amazon

Much like Google’s free shopping listings announcement earlier this year, we see this as a play to better compete with Amazon. With lower barriers to entry, Google can enlist a wider assortment of sellers and products. With greater selection, more shoppers may be encouraged to begin their shopping journey on Google instead of Amazon. Interestingly, Google’s help page specifically highlights Amazon feed compatibility for Buy on Google, speaking more directly to the Amazon seller than we’ve seen before.

Unfortunately, there are still major hurdles that could hinder Buy on Google’s growth. Merchants selling on Buy on Google still need to have their own website adhering to Google Shopping policies. This could be a roadblock for many of the small businesses that, according to Forbes, make up close to half of all annual Amazon sales. On Amazon, these businesses can exist entirely within the Amazon ecosystem without the development resources to create and maintain their own hosted website.

Changing consumer behavior is the other major hurdle. Google still isn’t widely recognized as a platform where shoppers can complete transactions. Depending on where these ads appear (on the main SERP versus the Google Shopping page), exposure might not be wide enough to shift that perception. Overall, the changes are positive updates for current and potential Buy on Google advertisers – whether they’ll ultimately have positive financial impact for Google, however, is a big question mark.

Interested in the latest SEM insights? Check out Merkle's Q2 2020 Digital Marketing Report here.