Interview with Alex Sperber about Google Shopping CSS

Alex Sperber: The importance of Google Shopping had grown so much that the European Commission finally took notice in 2017. Google’s search results only found offers from Google’s own price comparison site, Google Shopping. On the grounds that Google had “placed its own price comparison service at the top of its search results and downgraded competing comparison services”, the EU imposed a competition fine of 2.42 billion euros on Google and obliged Google to use Google Shopping within the EU for other product searches and Open price comparisons.

At the end of September 2017, shortly before the EU Commission’s 90-day deadline, Google announced that it would decouple its Google Shopping (google.com/shopping) service, which had previously been integrated into the web search. Since then, the Google price comparison has had to book ad spaces on the search results pages itself and is in competition with other so-called “comparison shopping services” (CSS).

To enable fair competition, Google granted the competition a not inconsiderable margin of around 20% on the click price on shopping ads.

Alex Sperber: The first change, visible to consumers, is the way the ads appear on the results page. If an ad is placed by a CSS, this can be seen at the bottom of the respective ad. It doesn’t say “From Google”, but the name of the corresponding price comparison site.

When a user clicks the „By UnitedAds“ link, they will be directed to the product search website. The percentage of users who click this link is minimal. Most consumers may not even notice the change. As more and more ads are being displayed using different CSS, displaying different price comparisons will become the norm anyway.

The decisive change is not visible and affects the auction around the ad spaces. In order to persuade competitors of the Google price comparison company Google Shopping to participate in the shopping auction, Google changed the rules of the game. For shopping ads in the European Economic Area that are based on Google Shopping, the CPC stored via Google Ads is split into two parts: the actual CPC and a margin.

The margin is a fixed percentage of the CPC set by Google. This margin is around 20 percent.

So if a retailer places a bid of € 1 via Google Shopping Europe (Google’s own price comparison), also known as GSE, about € 0.20 goes to Google as a margin and € 0.80 goes into the auction. If the retailer now uses a different CSS, he can reduce his bid to € 0.80 and is therefore still competitive in the auction against the ads imported by Google Shopping Europe.

The dealer can of course leave his bid at € 1 and thus win more auctions, i.e. achieve a greater range.

Alex Sperber: Yes, the margin for comes directly from your maximum CPC in Google Shopping. You will therefore take part in the auctions for the ad space with a bid reduced by around 20% and receive correspondingly less visibility with the same bid.

Alex Sperber: No, the CPCs are not increasing, rather they are staying too high. If you have not yet switched to a Google Shopping CSS, use the price comparison from Google (Google Shopping Europe or GSE), which keeps around 20% of your bid as a margin.

Alex Sperber: The margin is only collected on advertisements in the main search results page that are displayed above the organic, text-based results. Typically, however, these make up the majority of the traffic through Google Shopping.

Alex Sperber: The EU Commission regards the Google main search and the Google Shopping Portal as separate units. The EU recognized an infringement of competition in the use of the ad spaces in the main Google search. That is why CSS was only introduced for the shopping ads above the text-based search results in the main search.

Alex Sperber: The EU Commission regards the Google main search and the Google Shopping Portal as separate units. The EU recognized an infringement of competition in the use of the ad spaces in the main Google search. That is why CSS was only introduced for the shopping ads above the text-based search results in the main search.

Alex Sperber: When CSS was introduced it was, yes. In the meantime, however, there is an opt-in for the shopping page and the Google partner network, which enables you to place your shopping ads on all pages via a CSS partner.

If you decide against opting in, you have the option of submitting different bids for the two Google interfaces. However, you should carefully consider whether it is worth the double effort for your own company.

Alex Sperber: On the one hand, the ad placements in the shopping tab should be significantly cheaper and the bids lower. On the other hand: How big is the traffic share in the shopping tab actually? Can this justify the double maintenance effort? The presence in Google Shopping europe and a CCS partner is particularly worthwhile for large advertisers. Because for them, the lower proportion of traffic in the shopping tab could also be significant.

Alex Sperber: We mainly recommend the complete move to CSS. Your accounts are only re-linked, the setup remains otherwise the same. In plain language this means: Little effort for the retailer, with full utilization of the CSS advantage.

Alex Sperber: After switching from GSE to CSS, the margin that was deducted from your bids will no longer apply.

If you leave the CPCs at this level, go into the auctions with higher maxCPC bids. The result: Your ads will be displayed more frequently and you will receive more traffic. No changes need to be made. This happens automatically.

Alex Sperber: If the savings from the approx. 20% cheaper CPCs at CSS are to be reinvested immediately, the optimization goals should be relaxed by approx. 20%. However, we recommend not to increase the bids again immediately after switching to a CSS. This should be done at the earliest 2-3 weeks after the changeover.

Alex Sperber: While the lifespan of CSS shopping was unclear at the beginning, there are now many indications that Google CSS will last in the long term. EU pressure on Google continues to grow. The fact that GSE is still represented much more frequently in search results than CSS partners shows that there is still room for improvement. Google is therefore well advised to continue to motivate third-party product searches to appear in the shopping ads. Google does this, for example, by developing formats such as Comparison Listing Ads (CLA), which are specially designed for CSS partners.

If you still rely on GSE due to uncertainty, you should now deal with CSS at the latest. Because the topic has come to stay. The speed with which Google notifies changes remains a challenge. Individual initiative and foresight on the part of CSS providers and advertisers is required in order to be successful in the CSS jungle in the future.

Alex Sperber: Who is your contact person for Google Shopping after the migration to Google CSS depends on whether your CSS has approved the so-called “waiver”. The waiver allows your Google account managers to see your accounts even after the migration. In this case, you can also advise after the migration.

If you have any questions about migration, you can of course also contact us at any time.