Google's New Buy Button and its Impact on Ecommerce, Google Shopping Ads

By Logan Durant
TOPICSConversion, Google, Product Ads

A Google AdWords beta was leaked through the Wall Street Journal on May 19 purporting the release of the Google Buy Button.  After the beans were spilled, Google quickly confirmed that the buy button is “imminent.”

It is still unclear how this change will impact ecommerce sites dependent on Google Shopping traffic as a revenue source, or how the management of these PLA campaigns will need to adjust. However, there are a few things we do know.

The buy button is reportedly a functionality that will allow online shoppers to buy products directly through Google’s Shopping interface without having to visit third-party websites.  Sources close to the matter say that the buy button will only be released on mobile.

POG - Under Armour

Photo credit: Google AdWords and Under Armour

This move coincides with the recent release of similar buy buttons from Twitter, Pinterest, and Instagram.  While these social media sites are looking for ways to monetize their service, Google is likely looking for ways to combat its largest competitor in the shopping space: Amazon.

Amazon’s 1-click buying process makes it effortless for consumers to purchase products without having to enter in any payment, billing, or shipping information.  Consumers also trust that the product will ship on time and as described.  Google’s new buy button will attempt to remove the barriers that Amazon has already torn down in three ways:

  1. 1 Click Payments – Google will presumably use their own payment service, Google Wallet, to allow customers to store their payment info for easy, 1-click buying.  Another option is a partnership with another payment platform like PayPal.
  2. Easy mobile checkout – The main problem Google is facing right now is the widening gap between mobile searches and mobile ad spend from businesses.  Since most ecommerce websites see lower conversion rates on mobile, they are less likely to spend a lot on mobile ads, even though that’s the device on which an increasing number of searches are happening.  This is scaring the search giant because they’re already seeing CPCs fall, and mobile ad spend is not increasing commensurately with mobile search volume.  Thus, Google is hoping that an easier mobile checkout process (like the buy button) will significantly increase mobile conversion rates, spurring more mobile advertising spend from merchants.
  3. Trusted Stores (or something like it) – Every consumer trusts Amazon, but most small to mid-size ecommerce sites don’t enjoy that same type of faith.  Using the Google Trusted stores badge more prominently throughout the checkout process will most likely lead to better conversion rates and thus greater ad spend by merchants, especially on mobile.

What this means for retailers: it’s unclear what effects the Google Buy Button will have on ecommerce retailers.  Many digital marketers have hypothesized about the pros and cons of the button, and here are some of our thoughts:

Potential Cons:

  1. The shopper bypasses the shopping experience on the merchant’s website, unable to receive upsell opportunities, special discounts, or FAQs about the product or website.
  2. The shopper becomes hyper focused on price as a differentiating factor
  3. Small retailers in competitive markets or markets with MAP pricing could have a hard time competing with larger retailers with higher advertising budgets.

Potential Pros:

  1. The Google Buy Button will potentially solve all of the woes of the current mobile checkout experience on many merchant websites, resulting in increased revenue for merchants.
  2. Consumers could put more trust in websites they’ve never heard of before if the sites are “Google Trusted Stores”, resulting in more conversions and revenue for merchants.
  3. Merchants may be able to take full advantage of the increase in mobile searches by fueling mobile ad spend due to large increases in conversion rates.

Update: 7/15/2015

Google has officially released an announcement today that the Buy Button is being piloted across a small number or large retailers.

From the article:

Finally, to help smartphone shoppers buy with ease from their favorite retailers, we’ll be testing Purchases on Google. When a shopper searches on mobile for a product such as “women’s hoodies”, she may see a shopping ad with ‘Buy on Google’ text. After clicking the ad, she’s taken to a retailer-branded product page hosted by Google. Checkout is seamless, simple, and secure, thanks to saved payment credentials in her Google Account.