Free Shopping (tab) clicks: a closer look

Free Google Shopping clicks? Great news – but let’s have a closer look!

Google has stated that “In light of [physical store closures due to COVID-19], we’re advancing our plans to make it free for merchants to sell on Google.” 

First: this is about free clicks in the Shopping tab, not Shopping ads in the primary SERP. Normal Shopping ads remain untouched.

Let’s look at the following points:

1. what happened and why is Google doing this?
2. what does this mean for retailers and advertisers?

What happened and why is Google doing this?

Google has expanded their Merchant Center “Surfaces” program to include the Shopping tab in the US, with a goal to roll it out worldwide this year. You might already know Google Surfaces in the form of organic/free product listings in certain image searches and more recently in the form of a free Popular Products panel on the main SERP for certain product-related search queries.

Now the inclusion of the Shopping tab property means anyone opted in to the Surfaces Across Google program in their MC will be eligible for, yes, free Shopping clicks.

Of interest: Google already makes Shopping tab clicks available for free in India (possibly other countries too, not 100% sure). There is a separate history and strategy behind that, but it gives us a sneak peek into how this might look:

So why this change? There’s an official story and an unofficial story.

As mentioned above, the official story is that Google wants to support merchants who are struggling due to store closures and overall economic disruption resulting from the coronavirus health and economic crises. This is very cool of Google and I want to thank them for accelerating the rollout of this strategy, since I guess it comes at some cost to them.

The accelerated rollout was costly, that is – I don’t guess the overall strategy costs them too much.

Which brings me to the unofficial story.

??Great read from Ginny Marvin – here

This strategy already existed and the timing is not too surprising since it’s a win-win for Google.

Last month I predicted that merchants should keep their eyes open for such opportunities:

The situation right now is very threatening for Google, as it is for many businesses. Google’s parent company Alphabet is highly dependent on ad spend – in Q2 2018, for example, advertising fees accounted for 86% of Alphabet’s revenue. Meanwhile, their traffic acquisition costs (TAC) are eating more margin, competition from Amazon is up, and their “other bets” category continues to lose money. If the larger recession also yields an advertising recession, it will immediately impact their bottom line.

There are surely conversations happening within Google at the executive level. I can only speculate the outcomes of these talks, but, who knows, they might include improved payment terms or different goal-reaching setups that would reward merchants who stick with Google or help those merchants make it through this period. In other words, Google’s time of need could be positive for online retailers. 

So far this broad prediction played out in the form of expanded ad credits and now expanded free Surfaces.

As mentioned, this new Surfaces expansion is following a pre-existing strategy that also includes a recent redesign of the Shopping tab property. Presumably there are more phases to be announced later.

Overall, this strategy is widely interpreted as a way of defending Google’s share of product search against Amazon (1, 2, 3, 4).

It can also serve to drive adoption of the Merchant Center (especially in SMB and newly-online biz), which can result in downstream paid clicks. In this regard it fits Google's strategy to onboard late adopters of Shopping via initiatives like Smart Shopping Campaigns.

It makes a lot of sense to offer these clicks for free if you assume a) these clicks are low volume (more on that later), then b) Shopping tab engagement is inherently valuable to Google as a branding and customer lifetime tactic, and last c) advertisers will not decrease their budgets because of this, meaning those budgets will still be spent – just more fully utilized on the SERP. In other words, there is no cannibalism or loss of revenue expected from Google’s side. They have shareholder obligations that would require them to report a known or expected revenue loss, especially if self-induced and during a time of economic uncertainty.

Quick recap so far:

• clicks in the Shopping tab will become free for participating merchants
• Google is doing this to support retailers through the COVID-19 crisis
• and to shore up product search volume against Amazon
• and to drive Merchant Center adoption
• no major loss of revenue is anticipated for Google

[Edit – I’ve seen Kirk Williams share a very similar and beautifully stated assessment here:

“I should be careful to not appear overly negative, this will certainly give SMBs and advertisers access to free traffic they didn’t formerly have access to . . . Google has masterfully figured out a way to promote good-will for their brand, take a shot at Amazon, raise awareness for the Shopping tab (which they REALLY want to win so they can get more advertisers on Shopping Actions), all while not likely losing any money at all.”]

What does this mean for retailers and advertisers?

The obvious answer is free clicks. But the big question is how many – will this actually be incremental for merchants? And if it is incremental, then are there other second-order consequences to consider? What about the CSS program in Europe? Can you optimize for free clicks?

Google does not disclose the click share of the Shopping tab vs. the SERP. It is a closely guarded secret, and anyone telling you they know it for sure is wrong – we can only guess it. I’ve heard through the grapevine that even within Google this information is kept on a tight need-to-know basis.

However, we can guess that the click share is low due to simple conversion funnel logic. Instead of making a search and clicking a prominently displayed Shopping ad, the user must make a search, switch to the Shopping tab, scroll past a prominently placed Shopping ad, and then click on a free listing.

Even in the press release from Google, the gif they displayed (still image above) shows quite clearly that paid listings hold the top spot in the Shopping tab. To be honest, I wouldn’t expect too much from this – although every little bit helps, naturally. I would expect a greater impact from the Popular Products panel launched last year. That is much better real estate in my humble opinion.

So what can you do to report the incrementality of this announcement? 

There is a new performance report in the Merchant Center to deliver some kind of transparency into the Surfaces program:

Knowing the number of unpaid clicks you receive is imperfect but still interesting information. The challenge is that while Ads knows what happens in your MC (specifically your feed), your MC doesn’t know what is happening in Ads. So this data is siloed and will not indicate conversions, revenue, etc.

What you can do as a workaround is to look at your average click productivity, and then apply that average data to the click volume reported:

1. check your account-level conversion rate for last 30 days, e.g. 3.19%
2. multiply your unpaid clicks by that conversion rate, e.g. 1000 * .0319
3. then you have a rough guess how many conversions were generated
4. you could then multiply by AOV for a guess at revenue

This is a very approximate take on how incremental the Surfaces are for you.

Not specific enough? Well… there is another way. ??

If you really want to know a bit more about what’s going, you could:

1. duplicate your feed
2. serve it once to all destinations excluding Surfaces
3. serve it a second time to only Surfaces
4. use two different tracking parameters of course

This is kinda the crazy hacker way to do it, since I guess incrementality will be low and this won’t be that fruitful for you. But, lucky for us, the PPC community is full of crazy hacker types (Martin R?ttgerding? ??) so maybe we’ll get some insights from an approach like that soon.

Now I want to play a short but fun game called “What if the Shopping tab really is high volume?”

If the tab click share is actually high, it could mean changes to your paid performance. For example, having your full budget placed on the SERP instead of the SERP + tab, could theoretically lead to you participating in more generic auctions. But I don’t think this will happen.

Remember the quick funnel logic from above? Except for direct traffic – i.e. consumers who are visiting the Shopping tab as a destination (*cough* no one *cough*) – shopping through the tab instead of the SERP is a longer funnel, and we know that conversion funnels leak at every step. But we also know that purchasing intent increases with every step for the surviving cohort.

We might assume, therefore, that shoppers who pass through the longer funnel before landing on your webshop will have a higher conversion rate. They might also be more likely to purchase the item they clicked instead of another item, since they have the chance to apply filters in the Shopping tab. Both are really great news items. However, if we assume that this traffic has higher purchasing intent and higher specificity, we might also assume that AOV will be lower, since they are closer to the purchase when they land and less in “browsing mode”.

Higher conversion rate * lower average order value = not that much difference from any other traffic.

In short, I don’t anticipate big consequences for your Shopping campaigns, even if the clickshare of the Shopping tab is high – which is unlikely. Having your budget fully allocated to the SERP should be quite productive. If you were struggling to spend your whole budget already, it is conceivable that you might not be able to spend it all now, due to those free clicks.

Generally, no urgent action needed – just opt in to get free clicks. Let’s observe and share what we see.

Switching gears to the EU specifically, the CSS program will also not be heavily affected unless regulators intervene. Google does not seem to expect this as far as I can tell. They already allowed CSS providers and therefore CSS listings into the Shopping tab a while ago. It is a manual opt-in so do check if your CSS provider is opted-in, otherwise you will miss the chance to get free clicks from both your GSE and CSS accounts. John Cave has written about the intersection of Surfaces and CSS here.

Last point: is it possible to optimize for these clicks? 

That seems unlikely, I would just recommend having your data feed in good order to make it easy for Google to match you with queries. While title optimization is crucial for CTR in the Shopping environment, in the tab environment Google chooses a unified title, so there’s nothing you can do there. Beyond that, the Shopping tab largely functions as a price comparison platform, so be mindful that competitive prices will be core to performance.

Recap:

• free click volume is expected to be low
• it is not directly possible to report incrementality, but there are workarounds
• even if volume is high, no interference with the Shopping auction is expected
• no urgent action needed – just make sure you are opted in
• in EU, that also means making sure your CSS provider is opted in
• you might consider some feed hygiene, but this should anyway be a priority

Ok thanks for reading! I intended to just write a couple hundred words about this but I got carried away. Sorry about that. If you do enjoy my ramblings though, please feel free to join me (virtually) at SMX London next month. I’ll talk about navigating Shopping in the shadow of giants like Amazon and Google themselves.