53% of Google Shopping ads in the UK still come from Google

53% of Google Shopping ads in the UK still come from Google

Five years after the European Commission fined Google 2.4 billion euros ($ 2.65 billion) and ordered it to open its Google Shopping service in Europe for external competition, a new study suggests that about 53% of ads on the platform in the UK still comes from Google itself – with about 49% in 2019.

Searchmetrics research shows that after Brexit, Google is no longer trying to increase competition on its UK buying platform.

On top of that, research suggests that most of the external participants in Google Shopping aren’t actually real shopping providers compared to which Google’s action should have benefited. There are many marketing agencies that emerged after Google punished. They sell ads on the platform’s auction system, paying Google margin and giving the impression of increased competition.

The Google Shopping platform displays product ads in search results related to specific products that people search for. In its 2017 antitrust action, the EU ruled that Google had given itself an unfair advantage by promoting its own ads on the platform over those on competing shopping comparison websites that help consumers compare different products and prices to make informed decisions about shopping.

A recent study by Searchmetrics looked at over a million Google Shopping ad units across the UK and Germany to analyze the extent to which Google is adhering to the EU’s call to introduce more competition to the platform.

Comparing the results with its previous studies, Searchmetrics concludes that Google to some extent initially tried to increase external participation in the UK. But since Brexit, her efforts seem to be waning.

Lillian Haase, CEO of Searchmetrics, explained: “Our data suggests that Google’s share of UK shopping ads was around 68% in 2018. And in line with the EU’s call to increase competition this has been reduced to 51% by 2019. However, since Brexit happened, Google’s share of ads in the UK has started to grow again, reaching 53% in 2022 so far. The trend clearly shows that after Brexit, the EU Commission’s request for more competition no longer applies to UK search results. “

In fact, there are signs that there is even less real competition in Google Shopping. According to data, of the 47% of UK shopping ads that are not placed directly through Google, only 19% actually come from competing price comparison websites aimed at users of EU action. The rest (28%) are mostly from performance marketing agencies that sell ads on the Shopping Platform auction system giving Google a margin.

Google’s solution to address the lack of competition was to open a bid for Comparison Shopping Services (CSS) that can participate in an online auction by bidding against Google for advertising positions on the shopping platform. These external providers may accept ad offers from online merchants who wish to appear in Google Shopping.

But according to Searchmetrics, while some CSS providers are real comparison websites, most are performance marketing agencies that offer name comparison comparison services. Many were formed after Google’s 2017 penalty, and although they can run comparative buying portals, they only list products sold by merchants whose bids are managed on the Google Shopping auction system – meaning they are otherwise mostly irrelevant to actual shopping by comparison. In reality, their only function is for Google to demonstrate that Shopping ads are displayed by publishers other than itself.

“Even if at face value Google seems to have opened Google Shopping ads to outside providers, these comparative shopping portals themselves offer negligible customer value,” Haase said.

According to a Searchmetrics analysis, the UK’s top 20 CSS partners have negligible organic search traffic, supporting the view that their primary function is in fact to sell ads on Google Shopping rather than help consumers find products.

The research suggests that in Germany, 33.6% of Google Shopping ads still come from Google, down from about 50% in 2019 (and 67% in 2018). So in Germany, Google seems to be continuing to work to reduce its own participation. However, the same problems exist as in the UK. External ads come from CSS partners, with 41.5% placed through agencies, and only 24.9% from real price comparison sites that also function as CSS partners.

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Tags: Google, Google Ads



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