2GOOGLE SHOPPING 2018: Analysis and Market Overview Introduction: Google Shopping 2018 ........3 Google Shopping Study: Methodology .....6 A Short History of Google Shopping .....7 Overview: Key Findings at a Glance .......9 Market Overview UK .......11 Market Overview Germany .13 Market Overview France .....15 Conclusions ..........17 Contents 3GOOGLE SHOPPING 2018: Analysis and Market Overview Introduction: Google Shopping 2018 Shopping ads on Google general search ...CSS ACSS BGoogle Shopping Merchant Google Shopping and its Product Listing Ads (PLA) are Alphabet’s alternative to thegrowing status of Amazon as a product search engine. Google’s shopping serviceresponds to product search queries with adverts that include an image, price, ratingsand shop information. After Google Shopping became a pay service in 2013, merchants had to place theirproduct ads via Google; the ad places in the shopping units went to whoever bid thehighest CPC. If a user then clicked on an ad and was directed to an online shop, thenGoogle retained a margin of 20 percent of the CPC.The European Commission determined this practice to be an abuse of Google’smarket dominance in the online shopping advertising sector, and, in June 2017, hitGoogle with a fine to the tune of 2.42 billion Euros. Google was ordered to allow formore competition and to enable other Comparison Shopping Services (CSS) to havebetter access to the shopping market. A CSS is a website that collates product offersfrom merchants, and directs users who click on a product ad to the correspondingonline shop.Following the European Commission’s demands, Google Shopping was partitioned offinto a separate entity and shopping adverts were opened up to Comparison ShoppingServices. Since October 2017, external comparison sites have been able to bid –against Google Shopping itself, for adverts within the shopping units. Source: https://support.google/merchants/answer/7558973hl=EN 4GOOGLE SHOPPING 2018: Analysis and Market Overview Merchants can now place their ads via Google or via another CSS, with Google itselfnow effectively being just one competitor in the race for advertising spots. A biddingprocess determines which merchant’s advert is shown by which comparison service.The CSS bidding the highest CPC wins the auction.Another significant development is Google’s introduction of the incentive programme“SpendMatch”. This gives merchants who book their shopping ads via externalcomparison services a cashback credit on their ads account. This incentiveprogramme has been announced as running for a limited period, and is expected toexpire at the end of 2018. At the same time, the overall CPC has dropped, because Google used to retain a 20%margin on merchant ads and external CSSs now undercut Google Shopping’s pricesby working with zero – or significantly lower margins. Even a casual glance at the Google Shopping adverts reveals a much greater diversityin the comparison shopping services. In this example we see ads by Periscopix andCroud, as well as Google. The new model has engendered the emergence of numerous new comparisonshopping services. Most of these are not traditional comparison sites. Their role isexclusively the management of the Google Shopping auction process for merchants.We will continue to follow developments beyond the end of Google’s incentiveprogramme, to see if there is any consolidation in the CSS market.。。。。。。