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What a Buy button on Google mobile ads would mean for retailers

May 19, 2015 03:00 PM
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Google could roll out a Buy button next to its smartphone search ads soon, according to several published reports. Analysts say retailers might gain additional mobile sales, but lose access to some customer data.

According to published reports, which Google declines to comment on, the Buy button would appear next to ads on the search results pages that Google presents to smartphone users. Google would host the checkout page, and clicking the Buy button next to the ad would let a shopper complete a purchase without ever leaving Google, reports say.

That scenario would make mobile shopping easier, says Jeff Campbell, senior vice president at Resolution Media, a digital marketing agency. “Google’s Buy button will bring the much-needed simplicity to a mobile purchase,” he says. And he notes many retailers already send Google the pricing and inventory information it would need when they bid on Google Product Listing Ads, the listings with images and prices that appear prominently in the central section of a Google search results page.

Such a feature would improve today’s low smartphone conversion rates, agrees Scot Wingo, executive chairman and co-founder of ChannelAdvisor Corp., an e-commerce marketing services provider. Consumers who view Google ads on a desktop computer convert at a rate of 3.0%, tablet users 2.7% and smartphone shoppers only 0.8%, Wingo says, citing data from ChannelAdvisor retailer clients.

Wingo says adding a Buy button would make shopping on Google more like shopping on Amazon.com, the leading e-retail site where many consumers begin their online shopping trips.  A consumer on Amazon.com or in the Amazon app, can search for an item, add the product to her cart and pay with her stored credentials. In contrast, when a consumer clicks on a Google ad, he is taken to the retailer’s site where typically he must log in or create an account, enter billing, shipping and credit card information and then confirm a purchase.

“Retailers and Google have a mobile challenge, and we believe a marketplace would solve this,” Wingo says. According to Internet Retailer’s Mobile 500, consumers using smartphones and tablets convert at a 7% rate. Amazon.com Inc. is No. 1 in the 2015 Internet Retailer Top 500 and in the Mobile 500.

A Google Buy button could accelerate sales for retailers, but it may not be a complete win for merchants, says Irina Bukatik, director of product management at marketing firm Kenshoo and Mark Simon, executive vice president of Didit, a search marketing firm.

If consumers buy with credit card information they store with Google, the retailer does not have that information and cannot offer the convenience of easy checkout on a subsequent visit. The retailer also is unable to place a cookie on the shopper’s browser, Simon says. That means the retailer cannot store her preferences and activity, and thus can’t use that data to present her with personalized offers when he returns.

“Google will own the consumer data and it will be up to Google as to what consumer data—such as address, email, payment info—that they will pass to the retailer,” Bukatik says. “The retailer may run the risk of having partial consumer data and consumers not going to their site for future transactions.”

Retailers also will have to deal with the question of who owns the customer, Bukatik says. If a consumer purchases off Google, a retailer’s branding is irrelevant, says Brendan Witcher, an analyst at Forrester Research Inc.

But for e-retailer Scott Jordan those considerations are less important than the possibility that Google’s initiative might lead to more sales from smartphone shoppers. Jordan, CEO and founder of travel apparel retailer ScotteVest, believes the Google Buy button would help minimize cart abandonment on smartphones. “We are always looking to increase mobile conversions, and the Google Buy button has a high potential to do exactly that,” he says.

Between 9% and 11% of ScotteVest’s smartphone traffic comes from Google ads, Jordan says. Although the retailer only allocates 5% of its Google ad budget for ads on smartphones, the return on investment is typically two or three times its spend.

“The return on investment is solid,” he says. “I hope that the Google Buy button improvements will help us scale up so that a greater spend consistently yields a greater ROI."

Simon says the Buy button also could be an attack on Amazon, where consumers often go first to search for retail productss.

But Wingo is skeptical that Google’s move would have much impact on Amazon. “Amazon is pulling away from Google right now and taking over the 'product search' spot in consumer's minds,” he says. “Google would have to make a very long-term and concerted effort to slow that momentum. That being said, Google is one of handful of companies that have a shot at it.”

Follow mobile business journalist April Dahlquist, associate editor, mobile, at Internet Retailer, at @MobileStrat360A.

Sign up for a free subscription to Mobile Strategies 360, a new weekly newsletter (debuting in June) reporting on how businesses in all industries use mobile technologies to communicate with and market and sell to their consumers. Mobile Strategies 360 is published by Vertical Web Media LLC, which also publishes Internet Retailer, a business publication on e-retailing.

 

 

 

 

 

 

 

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