Have you been caught by surprise?
Google‘s buy buttons have been under the spotlight ever since The Wall Street Journal reported that Google would soon include buy buttons onto its mobile shopping ads.
If WSJ is right, then:
- Google will have access to such data such as customer preferences that can be used to properly identify its targeted audience and grow it, thus boosting its revenue profile.
- Google will end up competing more closely with Amazon, eBay, Facebook and Twitter.
- Google is not strictly an e-commerce player, but with such a captive strategy it will raise the competition bar for transaction-related fees, perhaps in specific sectors where core margins are under a huge amount of pressure. Retailers, for instance, could benefit from more competition from ads providers, although Google will unlikely be kind with regard to its price policies. In fact, it will not undercut its rivals, in my view.
Why Buy Buttons Are Important
It looks a lot like Google is trying to exploit its dominant market position by striking deals with retailers and other third parties, essentially to secure a deeper understanding of the data as well as to control more closely mobile ads, while driving traffic.
Are buy buttons going to be a game-changer, though?
They could be a distraction, but Google needs a bold move to dictate strategy in the digital field, and buy buttons are the most obvious path forward. It is a balancing act, however, between volumes and the actual response from the competitive landscape.
What’s Behind It
Google’s mission is to generate more ads revenue from mobile. Its ads revenue model is based on CPC (cost-per-click), which has dropped 7% in the first quarter of 2015, according to the latest Google Investor Report.
So, how can Google buck the trend of declining CPC, while improving CTR (click-through rate) for mobile devices?
It started by forcing websites to become mobile-friendly — Mobilegeddon should ring a bell — and it’s going to carry on by looking to steal market share in the mobile space, including additional search and purchase features to its own platform.
By learning more about its audience and the data backing its advertising campaigns, the data itself will become more accurate, while CPC should steadily rise — that works in theory, at least.