How eCommerce Merchants Can Take Advantage of Google’s Expanding Online Marketing Capabilities

As Google’s advertising growth is slowing, it’s getting more aggressive in courting retailers. As a result of this effort it is bulking up its capabilities as an overall commerce platform to do so.

Most recently, the company announced that it is rebranding its Google Express marketplace as Google Shopping, as well as expanding visual shoppable ad formats to new platforms like YouTube and Google Images. It’s also been adding more merchants to its marketplace over the past year. According to e-commerce research firm Marketplace Pulse 940  retailers are now on Google Express, up from 27 two years ago.

The company has also steadily been adding new merchants to a program it first announced at Shoptalk in 2018 called Shopping Actions. The program allows retailers to promote their products across multiple Google platforms, including Google Images and Google Assistant. Customers of participating merchants can also shop via a universal cart that worked across multiple properties, including mobile and desktop. Since launching, the number of participating merchants has increased “sevenfold,” according to Google, and the number is steadily increasing. 

With these new initiatives, Google is pitching to retailers its ability to reach customers on multiple platforms like video, image, text and voice, as well as to provide a more seamless payment and checkout experience. It’s also taking on some of the logistics work that’s become a headache in the e-commerce age, by pledging to communicate with customers about shipping issues and returns on behalf of retailers.  With the relaunch of Google Shopping, Google is using its treasure trove of data to create a personalized homepage that it’s hoping will make Google the first destination for more shoppers, though the company hasn’t shared what data it shares with retailers or the general public.

Google’s push into commerce comes as shopping online has become increasingly splintered. Platforms like Instagram and Pinterest  fuel brand discovery, while Amazon serves increasingly as a catch-all for product searches.  In fact, despite Googles reputation as an all around search engine, ccording to marketing analytics firm Jumpshot, the majority (around 54%) of product searches start on Amazon. By taking steps to provide alternate ways and increasingly integrated ways for customers to discover new products, Google could serve as both a point of inspiration as well as a convenient shopping destination (similar to Pinterest and Instagram but on a much larger scope, of course).

Part of what is spurring this is that growth of Google’s ad revenue also hinges upon its ability to become a shopping destination. With $116 billion in advertising revenue, Google is still the largest recipient of digital advertising dollars in the U.S. But its ad revenue has been slowing for the past four quarters — in Q1 2019, its ad revenue grew 15% compared to 24% year over year. Google risks losing out on advertising money from retailers to Amazon and Facebook, which is also aggressively moving into commerce with the launch of Instagram checkout. In April, Amazon reported $2.7 billion in advertising revenue during its first-quarter earnings calls, a year-over-year increase of 36%.

So in essence, Google is now attempting to race  to become a power player in commerce faster than Amazon can become a power player in advertising,

Over the past year, Google has worked to  recruit more smaller and medium-sized retailers, many of them already selling on Amazon, eBay and Walmart marketplaces. Googles efforts are largely focused on trying  to recruit smaller retailers by  promising them a more seamless shopping experience It is  also trying to engage other major retailers like Nike, Best Buy, Sephora and Ulta Beauty to first become part of its Shopping Actions program, which tried to entice retailers with the promise of giving its customers access to more seamless checkout options like a universal shopping cart and one-click reordering.

But even with the addition of new merchants, Google’s marketplace generated just $1 billion in sales last year, according to the Information, giving the company a long way to go until it can catch up with Amazon, which did $142 billion in product sales last year. Rebranding Google Express as Google Shopping was a much-needed step in raising brand awareness for the marketplace, as “the name says exactly what it is,” and that many consumers don’t even know that it existed.

One way for Google to convince merchants, especially smaller ones, that its marketplace is worth their time and energy is to make all of its properties more suitable for brand building and product discovery. So over the past year, it’s taken a page from competitors like Pinterest and Instagram, and pushed more catalog-style formats like its Shopping Showcase Ads, which emphasize images over text. At a recent Google’s Marketing Live event, the company noted that about 80% of traffic from Showcase Shopping ads to retailer sites are from new visitors just discovering the brands.  However, this would leave a question as to what place larger retailers would fit into this strategy.

What this allows at the moment is a way for Google to create more advertising options at the top of the purchasing funnel, versus at the bottom of the funnel, where Google’s keyword ad formats have played an important role.  Since digital shopping is becoming a much more visual space, it’s going to be a much more inspirational space,  This is really designed to open up advertising to a part of Google that was previously hard for an advertiser to access, thus creating a clear path for small brands and online retailers to have their products discovered, and draw consumers into their community.