Does Google Shopping make it harder to run an e-commerce business?

Google shopping has rapidly developed the e-commerce landscape since its entry into the European market a couple of years ago. Not only has the search engine to rule them all soaked up a lion part of the traffic since (clear consolidation trend, stay tuned for more insights around what this means in later posts), they also changed the rules significantly. As we have come to learn (and love?) with the Google way of doing things, auctioning is the name of the game. So what's new? 

CPC-bidding on traffic is the only way it always was with e-commerce, right? Yes, however Google has really amped up the game. And they did this in a couple of steps: 

Firstly they increased the parameters considered in getting an ad in front of a clicking customer. Rather than just considering the CPC and displaying the highest bidder, they have thrown in an unknown additional number of parameters into the mix. The winner in this secret race gets displayed the most and brings home the highest quality traffic. 

Secondly they've built an ecosystem of platforms capable of incredible tracking. Google Analytics, Google Ads, Merchant Centre and the rest of the suite compiles into what arguably is the most advanced BI toolset "normal" vendors has ever had their hands on. And with great power comes great competition. Unleashing this nuclear toolkit onto the market creates a meaningful divide between those who have the skills and resources to use them, and those who don't. 

If you are still bidding based on the same CPC-modelling as you always were, chances are that you've started to notice that it doesn't work as well anymore. And your only tool to solve it is to increase the CPC. The more data your competition is sourcing out of the ecosystem and converting into granular bidding systems, the more specifically they are going to be bidding. That means they'll snatch more of the high converting traffic right out of reach from your average-worth-based CPC-bidding strategy. 

The more we know about when customers are close to buying something, the more the click prices are going to diversify for the same products based on circumstances. Who is searching, when are they searching, for what are they searching specifically and where in their purchasing journey are they? If you can answer those questions and more, you know when to bid high, and when to bid low to get great results. If you can not answer those questions, you'll keep bidding average straight through, leaving you overbidding on poor traffic and underbidding on the good stuff.

This is not bad news for you, you've (probably) got the most powerful opportunity of reaching precisely the right customer at the right time that any seller of anything ever had. All you need to do is make sure you harvest all your data, and manage to translate it into winning the Google auctions at the opportune price point. 

Get that right and you'll leave your competition in the dust.