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Google Shopping is Bad News for Merchants and Could Be Bad News For Google

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We first told you about Google's new paid based product submission model,[URL="http://www.internetmarketingclub.org/entry.php/521-Goodbye-Free-Google-Product-Search-Hello-Google-Shopping-amp-Fees"] Google Shopping[/URL] two weeks ago. At that time Google announced that they will be transitioning from the free product search Google Base service to Google Shopping, a paid model where store must pay for inclusion of their products and pay per click for each product listed in Google. Some might say that merchants should be happy they got something for free for so long, however most would say that a paid model favors larger and more tech savvy merchants over small businesses. In this paid model, Google profits, and merchants might gain sales, however will ultimately have to raise prices when advertising costs increase, so consumers do not end up benefiting either. Search Engine Watch just covered the story with 3 reasons why the new[URL="http://searchenginewatch.com/article/2182079/3-Reasons-Why-the-New-Google-Shopping-is-Bad-for-Ecommerce-Merchants"] Google Shopping is bad for e-commerce[/URL]:

[B]Why The New Google Shopping Sucks for Ecommerce Merchants[/B][LIST=1][*]The new Google Shopping creates a rift to PPC management firms and merchants who are accustomed to using Google AdWords – bidding at the keyword level and creating product text ads for certain ad groups. The new Google Shopping will not work like that. Why?
[LIST][*]Merchants and Agencies will be required to use a merchant’s Google Product Search data feed to submit to the new Google Shopping. Most merchants and PPC agencies don’t have experience with data feeds.[*]Bidding is product based, not keyword based. You can only submit your feed and bid via attributes in the feed in Google’s Product Listing Ads interface.[/LIST][*]Some small merchants won’t adapt fast enough to take advantage of the program and will lose out on traffic and sales.[*]The potential for more sales is there, but at what cost? The new Google Shopping will require a high level of technical management with the data feed and constant optimization of the product bids in the campaign. This time and money suck will put a strain on merchants.[/LIST]Furthermore, Google might be getting themselves into hot water (or more hot water) with the FTC because they are not fully and clearly disclosing to its users why they are seeing results that are paid ads vs. results from the regular search algorithm. The details of the sketchy paid inclusion definition and the transparency and disclosure issues are all outlined in a letter that [URL="http://searchengineland.com/a-letter-to-the-ftc-regarding-search-engine-disclosure-124169"]Search Engine Land's Danny Sullivan[/URL] wrote to the FTC addressing the issue.

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