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Etailers report rising costs for Google Shopping

16th Aug 2015
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Businesses using paid-for shopping platform Google Shopping are reporting that the competition and cost-per-click is increasing on the site. The service, which allows ecommerce retailers to advertise their products, has been a paid-for sevice since 2012. 

In a new study, digital marketing agency Koozai asked 1,000 ecommerce retailers for their thoughts on Google Shopping campaigns. According to Koozai's survey results, the number of businesses using Google Shopping is rising. Two-thirds of these businesses added that the costs are rising with competitor demand. 

Around 37% of businesses think costs are rising 30-40% and 29% think they're going up around 20-30%. Most businesses asked felt Google Shopping provided them with a return on investment (ROI) of 62%. This result though, according to Koozai, may be subject to how well businesses run and handle campaigns on the platform. 

Products found through standard Google Search don't really pose a threat to Google Shopping, according to half of the businesses surveyed, who said they think Google Shopping campaigns generate higher ROI.

Google Shopping recommends that retailers update their product data feed daily. But the survey found only roughly 4% do this on a daily basis. 

The majority (36%) get around to updating their feeds weekly. 

In recent months, Google also announced the addition of two new features; a Buy Now button withwin its search results and a new Manufacturer's Centre. Opinions were split on the Buy Now feature, with 42% saying they think it'll impact negatively on their sales figures in the Shopping channel. But Koozai concluded there wasn't yet enough information on the feature to properly judge.

In terms of the Manufacturer’s Center, under which manufactuers will have some control over how products are displayed, around three-quarters of businesses wanted to keep control of their product data feed.

According to Koozai: "We can see the results are mostly positive, but advertisers really need to stay ahead of the game to compete in this increasingly crowded marketplace.

"With Google launching multiple new features for Google Shopping on a regular basis, optimisation techniques need to be tailored and adapted to suit," they concluded.

Google Shopping is something that has been the subject of debate among small businesses on our sister site UK Business Forums

According to member buildmeashop: "In our experience, Google Shopping costs are high, especially for low margin, highly competitive products even in a niche market like ours." 

Bill1954 added in a later post: "We have used it for years and the costs are definitely rising. Items that would show in the top three results for a bid of 30p are now costing £2.70 for the same results, so all it takes is a few non converting clicks to wipe out your profit margins."

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