Google once again changed the retail marketing game in March 2018 with the launch of Shopping Actions. The program, which delivers Google Express-branded product ads on Google Search, Google Express, and Google Voice, is Google’s first foray into the world of online marketplaces. For the first time, consumers can buy retailers’ products entirely on Google’s platform, rather than being directed to a retailer website.
Within the marketplace, consumers can shop across a variety of retail brands, streamline checkout with one-click reorders, and experience fast, two-day shipping. These features mirror the functionalities of other popular online marketplaces like Amazon and Walmart and suggest that Google is gearing up to compete with these platforms.
While this may be good news for Google, the implications for retailers are less clear. This new platform will have significant ramifications on retailers’ performance marketing strategies and will force retailers to decide whether Shopping Actions is a fit for their business. In order to help retailers assess the channel, Sidecar developed an in-depth Point of View on Shopping Actions which outlines key considerations as well as the benefits and limitations of the new platform.
The revenue implications are perhaps retailers’ greatest concern. Because Shopping Actions is commission-based–retailers pay a percentage of their profits to Google when a product is sold–as opposed to the traditional CPC model, retailers will have to rethink their cost structure. Their margins will likely be smaller when selling on Google Shopping, and there is potential for net revenue loss.
There is also a risk of retailers cannibalizing existing Google Shopping campaigns because Shopping Actions ads, labeled with a Google Express icon, appear within Google Shopping carousel and often earn the top spot. Retailers could find themselves competing with their own ads and losing Google Shopping revenue.
Below, we’ve outlined some of the potential risks and rewards retailers may experience if they decide to join Shopping Actions. For more insights on this platform, be sure to check out the complete Point of View, “How to Weigh Google Shopping Actions Against Your Business Goals”.