In a report from Sky News last month, Google has brought down the incentives substantially for retailers who benefited from deploying untrue and fake websites on price comparison for eCommerce products. This means that Google will incentivise advertisers to create price comparison sites that would be displayed on the search engine’s Shopping Box.
It has been noticed that this move is rather a response to the penalty of €2.4 billion slapped on Google last year by the European Commission. This fine was attributed to Google’s Anti-competitive practices on the digital space.
A background into Comparison Shopping service
The Comparison Shopping service came into being since June 2018. The European Commission has mandated the search engine giant to provide comparison shopping services with the same chance as Google Shopping to display ads on the SERP or search engine results pages.
Once the service was in effect, Google purportedly allowed advertising agencies to create comparison shopping sites which permitted them to tactically position ads which appeared in Google Shopping. This was done in an attempt to benefit from the incentives offered by Google, by creating fake comparison shopping sites. There have been many sites which didn’t meet the relevance factor and some didn’t even have a proper website once users were re-directed from the SERP to the site.
Evidences and Confessions
An ad firm, Shoptimised, admits that their comparison site was never created with the intention of serving customers. Another Ad agency happened to spill the beans to Sky News and confessed that they built a shopping service for their clients for one reason only – to avail of the incentives from Google, and not particularly to add value to a customer’s shopping experience.
It has been revealed that Google reportedly presented a staggering sum of £32,000 to those companies who would choose to advertise through a Google-endorsed comparison shopping service. Not just that, but Google also made available a 20% off on ads to sweeten the deal all the more.
All this has led Google to be under the constant vigilance and pressure of the European commission ruling.
The After-effects of the Fine by European Commission
In the light of the pressure imposed by European Commission, Google has now drastically cut the incentives offered to such Google-certified services by as much as 85%. This is because of the criticism Google happened to face ever since this serious matter has come to light.
Google had to lower the rebate (a partial refund to someone who has paid too much for utility, tax etc.) on advertising spend from 30% down to a pitiable 5%, which was made effective from November 1st this year. This sudden reduction in incentives has left a bad taste in mouth for the ad agencies as it didn’t fit with the ROI expected from the ad.
Companies did not assume that Google’s incentive invitation would soon come under the direct vision of the European Commission, and has eventually led to their utter dismay.
Various claims of fake comparison shopping sites have been lodged with the European Commission. Though Google stands its guard on the fact that the actions taken by them by lowering incentives have put their actions in due compliance of the Commission’s order.