Google Shopping’s Transition To Pay-For-Play Completes On Oct. 17

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Although it wasn’t among the services Google axed during its latest bout of “spring cleaning,” it’s definitely the end of an era for Google Shopping: starting on October 17th, the service formerly known as Google Product Search will make the full transition to a Paid Listings Service here in the U.S. It’s another example of Google’s changing position on what’s known as “paid inclusion.” In other words, Google took a free search vertical, which previously ranked results by relevance only, and turned it into a service where advertisers pay to play.

The shift to a paid listings is not a surprise – Google first announced the transition back in May of this year, which is also when the service was renamed from Product Search to Shopping. According to the company blog post at the time of the original announcement, Google found that organizing hotels, flight options, directions, and shopping information is different from indexing the web, because often the information it needs is not publicly available. In order to generate the search results in these areas, Google had to form partnerships with different industries, including financial services, travel and merchants who sell physical goods, the blog post explained.

Starting in May, Google began the transition to the paid listings service in the U.S., and it’s built on top of Google’s Product Listing Ads. At the time, Google promised the transition would complete this fall. Well, now the deadline is here. In a blog post, Google announced that as of October 17th, all searches within its Google Shopping vertical would be ranked based on relevance, with bidding as “an additional factor” in determining the result’s placement. Google said that search results on Google.com will not be affected, however.

Google also announced two new additions to its Product Listing Ads toolkit for merchants advertising on Google Shopping. One tool allows merchants to improve their Product Listing Ad performance more granularly, by setting their cost-per-click at the item level. This is aimed at helping the merchants meet their volume and profit targets at the product level, Sameer Samat, VP of Product Management at Google Shopping, said in the post. The other tool complements the first, allowing merchants to create product targets using the Product ID in their Merchant Center feed.

Do Consumers Get It?

While the merchant community has known about the changeover for some time (and for those who are late to the party, Google nudged them to http://www.google.com/ads/shopping to get started building ads), consumers who are used to searching for products on Google Shopping may be unaware of the transition. Shopping will still function as a search service, it’s still linked at the top of Google’s black bar navigation, and the general assumption on the part of most web searchers is that Google returns results based on its proprietary algorithms, with ads clearly indicated. How many users will realize that all the results within one vertical are ads?

At present, Google doesn’t indicate that search results are only coming from advertisers. In fact, the language currently used, which found under the “Why these products?” link, is: “Products and offers that match your query. Google is compensated by some of these merchants.”

Of course, the October 17th deadline is not here just yet, so you can’t call the company out for being intentionally deceiving. However, when the shift is made, that text should read “Google is compensated by these merchants,” in order to be accurate. Because, according to the Google blog post:

“Starting on October 17, Google Shopping results in the US will come only from merchants who are Product Listing Ads advertisers.”

The real answer to “why these products?” is that merchants have been benefiting from the free traffic Google was sending them, including Amazon and eBay. Traffic that could otherwise generate revenue for Google.

The transition is also about Google becoming a different sort of company than it was in its early days. At the time of its IPO filing, Google stated that it would “not accept money for search result ranking or inclusion.” Clearly, that has changed. As pointed out shortly after May’s announcement by Marketing Land and Google’s post, Google Shopping isn’t the only service where payment plays a role. (Flight, hotel, and financial product searches are the others). Whether you want to weigh on the somewhat tiresome “is Google evil now?” debate, that’s up to you. Arguably, the web Google once imagined indexing has changed, too, since Google’s IPO days. And paid inclusion, in and of itself, is not necessarily “evil.” (Remember how useful Yellow Pages ads used to be, in the pre-web days?)

The thing that really matters is making sure consumers understand when they’re seeing ads, and when they’re seeing organic results. As Google Shopping stands now, that little bit of “Google may be compensated” text is not enough.

Update: Google reached out to point out that the language is accurate until the deadline (as we noted above). Google also pointed out that when Google.com searches trigger ads linking to Google Shopping, those sidebar ads are indicated as “Sponsored.” (But, as noted above, Google.com search results aren’t affected by changes to Google Shopping results, so this is a little off-point.) In addition, text reading “Sponsored” appears on individual Google product pages. Below are the screenshots Google provided.