By Ilya Cherepakhin and Gregg Manias
To even the casual observer, Google clearly has been shifting to a more transactional mode in order to effectively monetize shifting consumer behavior and preferences with respect to e-commerce.
Some examples: In the travel space, SERP results include Hotel Ads in a booking engine format. The Wall Street Journal reports that Google will introduce Buy Buttons on SERP’s in a bid to make its advertising solutions more functional and user friendly. And at its most recent I/O conference, Google unveiled Now On Tap, which gives Android users greater flexibility in finding and sharing information—with major implications for local businesses and directories. Finally, Google launched yet another feature across its platforms to allow users to more quickly initiate e-commerce transactions, specifically within YouTube TrueView Ads.
Google’s goals are quite transparent. But what are the implications for consumers and marketers?
It’s no secret that people are increasingly seeking the fastest and easiest way to transact online. This is especially relevant with the rise of mobile devices and the penchant for many people to do price comparison shopping online while in brick-and-mortar stores. At the same time, many mobile sites are not completely user friendly. So Google is doing everything within its reach to reduce the path to conversion, foremost by removing the need to navigate to a website by enabling transactions within ads and SERP’s.
If usage of Hotel Ads so far is any indication, consumers are finding these types of features helpful and valuing convenience over loyalty to a given site. By aligning features supporting more immediate commerce with user behavior indicative of readiness to transact, Google can exert greater influence over user habits.
From a marketer perspective, aside from helping maintain visibility and drive sales in new ways, steps like adding Buy Buttons can help maintain loyalty in an increasingly fragmented marketplace. While transactions would start on a piece of Google real estate, they would be fulfilled by a supplier such as a retailer—not an intermediary. True, there is a bit less control over the purchase experience, as more of it happens with Google and less within, say, a retailer’s digital assets. Still, this would favor more transactions being completed with suppliers versus intermediaries like Amazon. And from a cost-of-sale point, Google offers a more attractive model: vendors will be charged on a CPC basis as opposed to a percentage of sale as with Amazon, which cuts steeply into profitability.
As with any new endeavors, it will take time for Google to iron out all settings and for suppliers to find the sweet spot that makes most sense in terms of when to use these features. Data feed maintenance and supply chain management are just two of several areas for businesses to stay on top of. For example, if a data feed is inaccurate and not updated, it could lead to people making purchases that merchants are unable to fulfill. It will be interesting to monitor how Google deals with this issue.
Availability of marketing analytics data at every step of the way is another priority. Ensuring these new marketing features are fully measurable will be key. There will likely be some cannibalization between other SEM formats and SEO, as is inevitable with any new search engine offering. However, one hopes that gains in Conversion Rate and CTR would make this worthwhile.
If the buy features take off and Google is able to analyze the purchase behavior, it could start rivaling Amazon Prime. Amazon is amazing at predicting what products people are likely to buy and merchandising them on their site. It’s one of the reasons many of us continue to return to buy on Amazon (aside from love of Amazon Prime). Google has a wealth of data to understand what people are actively interested in. If it can then marry this data with purchase behavior, Google can start better putting in front of people products they people want to buy, further improving the online shopping experience within the SERP.