: Google challenges Amazon ad growth with Square, Shopify deals

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Alphabet Inc.’s Google is broadening its suite of e-commerce partnerships through arrangements with e-commerce and payments companies, as Amazon.com Inc.’s rival advertising business continues to grow.

Alphabet
GOOG,
-1.27%

GOOGL,
-0.74%

announced the latest move to beef up the e-commerce experience on its platforms Thursday, deals with Square Inc.
SQ,
-0.67%
,
GoDaddy Inc.
GDDY,
+1.96%

and WooCommerce that follows a similar Google partnership with Shopify Inc.
SHOP,
+0.04%

that was announced earlier this month. Though Google has made shopping product listings free, the company is also aiming to generate more e-commerce advertising revenue by delivering smarter shopping insights as Amazon
AMZN,
-1.07%

finds continued traction in online advertising.

From 2018: Look out, Facebook and Google, Amazon is becoming an advertising giant

Square’s partnership with Google allows the company’s merchant base, which is known to include a high mix of smaller businesses, to quickly create product listings that will appear in Google’s Search, Shopping, Maps and other products. The feature comes “at no additional cost” to merchants, according to a Square press release, which said that the arrangement made it so Square sellers’ offerings would “populate right alongside items from other e-commerce stores of all sizes.”

Google has been making a big push to enhance its shopping platform in ways that could draw more interest from advertisers, as Amazon’s share of the digital ad market has surpassed 10%.

“We continue to see Google’s efforts to broaden its commerce initiatives as driving a stronger product for advertisers, particularly SMBs [small- and medium-sized businesses], and a stronger competitive product as it increasingly battles for e-commerce search advertising dollars with Amazon,” Wedbush analyst Ygal Arounian wrote last week after Google announced its Shopify partnership.

A key advantage for Google is that the company has multiple “products,” meaning properties like Photos, Chrome and YouTube, according to Arounian in his May 21 note. He sees Google’s efforts as beneficial for a world in which digital-advertising effectiveness could drop off given efforts by Apple Inc.
AAPL,
-1.24%

and others to limit tracking.

The company has been working on initiatives like photo-based shopping that would scan screenshots in Google Photos and allow users to see relevant shopping listings based on what’s shown in the photos.

Google’s efforts to ease the process of creating free shopping listings for smaller merchants also come after the company has faced scrutiny for its tactics in shopping advertisements. The company was hit with a $2.7 billion European Union fine in 2017 after regulators there took issue with the company’s favored placement for shopping ads in its search engine, and preference for advertisers has been mentioned by U.S. regulators that have sued the company.

Google and antitrust: Big Tech’s first target is facing mounting legal action

Shares of Alphabet
GOOG,
-1.27%

GOOGL,
-0.74%

were down 0.2% in Thursday afternoon trading while shares of Square were off 0.3%.

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