Thursday, March 22, 2018

Google looks to monetize product purchases

It seems like just about every business, big and small, has to ask itself: how do we compete with Amazon? In Google's case, it may just be able to steal some of Amazon's market share.

Recently, Google announced partnerships (or referral agreements) with companies such as Target, Walmart, Home Depot, Costco and Ulta Beauty. Traditionally, these companies have paid Google to advertise their products. Now, they've signed up to give Google a direct cut of their revenue on products purchased through Google searches and shopping cart. Furthermore, Google has integrated these capabilities across desktop, mobile, and its voice-automated smart home device Google Home.

It's an important shift for Google's relationship with big brands, and makes lots of logical sense for them. Google recognized that there was a major uptick in consumers' direct product searches on its site.

In these cases, consumers knew exactly what they wanted to buy, would search for it on Google, and in many cases, buy the product on Amazon. Google saw an opportunity to cut Amazon out of the picture.

While it's not clear how much more or less a brand would pay Google vs. Amazon, perception really matters here. Google sees itself as "an enabler of retail," not an enemy.

Perhaps the best way to summarize some retailers' perspectives on the Google-Amazon dynamic comes from Guru Hariharan, CEO of Boomerang Commerce:

"'Brands are looking at Google as the enemy of the enemy and that makes Google their friend.'"

It will be interesting to see how this battle unfolds. I would bet that Google's ability to capture specific purchasing intent will play to its advantage.

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