Google Launches Merchant Search

Google has today launched Merchant Search, a new feature that allows users to compare aggregated search-related product results instead of clicking through to seller's sites. Currently in beta phase, Merchant Search has gone live for some financial loan related searches, displaying a comparison drop-down at the top of the search results page.

Despite brands continuing their commitment to search marketing, search engines like Google face tremendous competition from aggregators - comparison sites and affiliates - especially in the commoditised financial services and travel markets.

This is worrying for search engines, impacting on searches and subsequent clicks, and ultimately eating away at revenue streams. If you can get results from every insurer through one aggregator there is only one search required on Google to find the aggregator, rather than a multitude of searches for each of the insurers.

You can’t blame users for seeking alternative information sources, search engines provide information on content, whereas users looking for car insurance or loans are mainly interested in prices and rates. Comparison sites and affiliates have filled this gap and attracted large user numbers interested in the information packed onto one site. Users then have less need to return to the search engine for subsequent queries.

How can search engines safeguard future revenue streams? Following the May 5th changes creating open keyword bidding, is a more fundamental change on the way? Recent changes have forced finance advertisers to take a hit in brand cost per clicks (CPC), increasing by up to 75%. This is now starting to fall, but still remains 50% higher than pre May 5th bid rates. Pay Per Click (PPC) remains the most favourable billing model, but in today’s gloomier economic conditions, marketers face more pressure to deliver accountable campaigns.

Google is heavily reliant on its PPC model, but a move towards CPA is not unthinkable, Pay Per Action (PPA) has been running as a Google beta product for major advertisers since 2007, delivering a model whereby advertisers can pay only once the desired action is completed on site.

By moving from PPC to as close to a Cost per Acquisition (CPA) or Cost per Sale (CPS) model as possible, marketers will only pay when the desired outcome has been delivered. This has always been the aggregators’ model and delivers a key competitive advantage over the search engines.

The key is in delivering the consumer exactly what they want in terms of personalised information, whilst giving the clients the option of investing as closely as possible in a CPA business model. The aggregators were winning here, however Google has moved the market on with its launch of Google Merchant Search, the ‘refined search’ trial in the secured loan arena. Users can now enter their details in order to see personalised results. This is significantly different from the personalised results users see when searching via the traditional portal where a second search will show results that also relate to the initial search term.

This model allows marketers to generate only pre-qualified leads, which if the volumes are as expected, could prove a highly efficient media. The other side of the coin is of course that this recoups revenue currently lost to the search aggregators. Google will charge a lot more for a qualified lead in a CPA model than the CPC of a single user search. The success of aggregators such as Money/Travel Supermarket.com and Go Compare will continue. Google will need some time to roll the trial out and to get all of the different advertisers on board and their systems integrated for this to become a permanent media offering.

Rosalind Brooker, Search Development Manager for Equimedia said, "This is an important move for Google as they come to terms with the different business models that are now evolving. The growth of areas such as aggregators and affiliates, particularly in the key markets of Retail, Travel and Financial Services has caught Google out. Google were the undoubted winner of the Pay per Click revolution, this move is them trying to ensure they stay at the forefront of this fast moving digital marketplace."