Media companies may soon cause collateral damage in the escalating shopping war between Google and Amazon.
recent report from Information (paywalled) writes about Google’s ambitious shopping efforts. In its attempt to compete with Amazon — whose digital advertising program is showing real signs of encroaching on the Google-Facebook advertising monopoly — Google has added retailers to Express shopping (which it is said will rename to Google Shopping). This program will be how the search giant is trying to beat Amazon: people will search for items on Google.com and then be able to buy them through smaller merchants while still using the platform.
but one thing Information The report did not say how Google’s shopping ambitions will negatively affect how media companies monetize their content. The change is likely to have a significant impact on affiliate affiliate revenue, which is one of the ways publishers have attempted to offset advertising headwinds over the past few years.
In the good old days, digital advertising was more diversified and websites were able to generate relatively stable revenue. Now the advertising market share has been concentrated on the two largest platforms – Google and Facebook – and media companies have experienced a sharp decline in revenue. As a result, organizations have sought other means of making money; Commission linkage is one such model.
Affiliate linking works like this: publishers display certain products on their websites and include a link to make a purchase. If readers choose to purchase said items, sellers – usually Amazon – offer them (small) parts to help make the sale easier. for sites like wire cutter And cnet– which has become a go-to source for product recommendations – affiliate linking and search engine optimization has become a powerful way to bring in meaningful revenue.
But things may change soon, as Google continues to boost its e-commerce efforts; Google seems to be building a shopper recommendation algorithm. For example, when I search for “best blender,” I am given curated blender options on the right side of the search results. Some ways down is another list of the best blenders prepared by Google, to feed recommendation content from the healthkitchen101.com website.
Then, if you scroll down further, there’s another box that gives more recommendations – and mentions countless rated sites.
This division, if brought to the fore more prominently, could significantly eat away at affiliate revenue that would otherwise go to media companies. Although Google links to these recommendation lists, it uses this content to feed its recommendation engine. Not only that, but the top link provides a way for users to bypass the articles themselves and find a seller via Google. Basically, it takes away the content of these sites, while hindering their ability to monetize it.
This new tool doesn’t show up in all my searches so it’s probably a trial for now. For other product searches, Google highlights one single review article at the top, teasing its content, but not associated with outside sellers. This is a little less annoying than the first example, but it still relies on the content of these websites for an automated search recommendation.
I’ve reached out to Google several times for comment and will update this post if I hear back.
for sites like wire cutterThis could be a huge blow. the The New York TimesThe owned website uses this revenue model to help the company in general rely less on the volatile advertising industry. So far, it’s been a good bet. In its latest earnings report, The New York Times reported $49.4 million in “other digital revenue” for the full year of 2018. This scale is likely to be a little further north than wire cutter Brought to the newspaper that year.
However, media companies will likely not be part of the Google Shopping equation. For the digital juggernaut, it’s all about competing with Amazon — especially in light of the fact that its core advertising business is starting to grow slower than expected. In its latest earnings report, Alphabet lost revenue forecasts by nearly $1 billion — giving investors the impression that its larger financial engine was beginning to slow. As Amazon continues to invest in its growing advertising business, it now appears that Google is trying to find other ways to beat the competition.
For now, this seems just an experiment. We’ll see if Google decides to roll out the new Shopping feature further. If that happens, expect to see some publishers suffer.