Google Product Search Transitions to Paid Model

Google dropped another bombshell early this month, announcing that Google Product Search will be transitioning to a paid model. Up until now, merchants have been able to submit products and product data feeds at no expense, enjoying the free traffic to their sites. The new program will be called “Google Shopping” and is the evolution of “Google Product Listing Ads”, more commonly referred to as the Google PLA system.

Merchants have just a few months to decide whether or not to transition to the new model. Google hasn’t released an official date, but they say Google Shopping will launch sometime around the end of summer 2012, possibly as late as Oct 2012. In the meantime, merchants who sign up before August 15th are being offered a 10% monthly credit towards their monthly Product Listing Ad spend which will be effective through the end of the year. Existing merchants are also eligible for a $100 Adwords credit to apply towards Product Listing Ads.

Is a Paid Inclusion Model Good or Bad for Merchants and Consumers?

There are two schools of thought on this new development. First, that many small businesses will simply be forced out of the search results, unable to compete with the big players. This represents another move away from small business and further embracing of large corporations. Critics of Google believe that the playing field is becoming increasingly skewed towards big money, making the barrier to entry still higher for the little guy. On the other hand, Google will have us believe that the move represents an effort on their part to deliver higher quality search results and a better user experience.

The move to a “paid inclusion” model seems contrary to statements released by Google in 2004 regarding their flagship product search feature “Froogle”:

“Because we do not charge merchants for inclusion in Froogle, our users can browse product categories or conduct product searches with confidence that the results we provide are relevant and unbiased.”

Since then, Google has clearly reversed its stance. However, they argue that the definition of “paid inclusion” doesn’t apply to Google shopping because there is a clear differentiation between the organic results and the paid listings. However, Danny Sullivan of Search Engine Land disagrees citing that:

“Paid inclusion has been historically used to describe when people pay to appear in a search engine’s results but without any guarantee of prominent placement. What’s happening with Google Shopping is classic, textbook paid inclusion.”

His position is supported by the US Federal Trade Commission’s own definition of paid inclusion:

“Paid inclusion can take many forms. Examples of paid inclusion include programs where the only sites listed are those that have paid; where paid sites are intermingled among non-paid sites; and where companies pay to have their Web sites or URLs reviewed more quickly, or for more frequent spidering of their Web sites or URLs, or for the review or inclusion of deeper levels of their Web sites, than is the case with non-paid sites.”

The Future of Online Shopping

Whatever your position, The volume of online shopping traffic is simply staggering and for those that opt into the new paid model, the competition will narrow as those that choose not to participate get peeled off. There are still hundreds of free options for merchants who want to submit their products and product data feeds including Bing Shopping and theFind.com.