In the summer of last year Google dipped its toes in the comparison game. Google quietly rolled out beta version of Google Merchant Search – providing a comparison service for secured loans. If you search ‘google merchant search‘ now you’ll find a search result pointing to Google’s site, but you’ll land on an error page. Google Merchant Search ended as quickly and quietly as it began. A couple of weeks ago Google announced a new service – Google Comparison Ads. Similar to merchant search with secured loans, except this time its mortgages, beta testing in the US. The comparison sites or aggregators aren’t going to be happy about this. Their big sigh of relief following the quick retraction of merchant search proving to be only momentary.
Largely Google is used for the initial search to find a Comparison site, removing the need to query direct supplier sites, which affects Google significantly. Comparison sites have had a massive impact on the buying cycle. Life before comparison sites was painful, laborious, and generally time consuming. However, there is an increasing level of distrust as comparison sites dilute relevance with self-interest and short-term revenue opportunities, resulting in sub-standard user experience. Google’s mission, in a nutshell, is to make every experience a positive one for users. And they’ll want to make some money along the way. Google entering into the comparison market satisfies both of these. Here lies an opportunity for Google to provide a convenient and relevant experience to users, giving control back to users, to provide as little or as much personal information as they want, before seeing relevant results based on the suitability and competitive merits of the product or service.
And the benefits extend to suppliers too. Firstly, direct advertisers are unable to compete with aggregators on top funnel generic keywords. The myriad of options available to consumers on aggregator sites means that conversion rates are agreeable with the high CPCs. And secondly, to a degree aggregators hold businesses at volume-ransom, dictating price per lead. However, in the pursuit of incremental volume the CPA model through Google Comparison would be far more appealing than the ever inflating CPCs – even with best practice approach to search management. If Google is to compete with aggregators it must also provide the security of a capped cost per acquisition, together with a transparent ranking methodology.
Another reason the comparison market makes sense for Google is because PPC adverts are largely of poor relevance in the finance vertical due to heavy FSA restrictions on both ad copy and keywords. And the organic results are often outdated due to the volatility of the vertical, and dominated by affiliate sites. For most up to date lending criteria and rates, comparison sites are the second best to direct sites, and sometimes better for at-a-glance view of product/service features.
Similar to the finance vertical, in travel too, largely the role Google plays is the stepping-stone to aggregator sites. Google fails to provide a rich experience on Google search. Instead users seek OTAs to ensure they benefit from the near real-time prices, and get the best deal or make a feel-good decision, on a flight, hotel, or holiday purchase. The need to search for then visit each individual site is replaced by the convenience of single page at-a-glance display from multiple booking engines.
The user experience concerns, and the benefits to both suppliers/direct advertisers as well as the consumers that Google can provide are similar to the finance vertical. In fact Google has arguably positioned its self to be a major player in the travel comparison market than any other with tools such as Google onebox – for example, allowing users to input departure/destination flight information for best price comparison. As well as Google Wave having the potential to allow traveller reviews/feedback to be in multimedia format in one continuous thread consisting of videos, images, music, etc. Could there be an acquisition on the horizon? Hotels comparisons would make sense, high margin and fewer components in consideration making side-by-side comparisons relatively easier.
Hitwise reports that there has been a 32% decline in ‘cheap’ searches and 92% increase in ‘compare’ searches in the motor and insurance sectors. This is clearly a very big piece of the pie. Google obviously thinks it can do a better job for both suppliers and consumers. It certainly has the technology and pricing agility to make it attractive for both suppliers and consumers. The CPA pricing model currently exists in it’s Adsense program through conversion optimiser. But it would seem Google is willing to extend its Google Affiliate Network pricing, which is currently live in the US, to the comparison market in a big way. If I were a comparison site or an affiliate network I’d be paying close attention.
