Google Shopping is part of Google Ads, except no specific image or text ads are placed here. Instead, store operators share standardized data from their online shop with Google. This data is the basis for the product boxes, in which the product image, price, shipping costs and the retailer’s name are displayed. The layout of the box is defined by Google.

Payment takes place in a CPC (cost per click) auction process. That means the shop owner himself can stipulate how valuable a click for a certain search query is to him. The principle is very simple: the higher the bid, the better the chance his offer will be placed in a prominent position, i.e. as close to the top as possible.

The most important benefit of this system is of course that Google Shopping is from Google. No one who is active in e-commerce can avoid the largest search engine. Most potential customers performing a product search go to Google first and enter a keyword into the search field. Many of them already use the shopping tab, directly under the search field, which over time has become just as important as the tabs for images, maps and videos. Anyone who does not pay attention to the habits of online shoppers does not have good survival chances in the highly competitive e-commerce market regarding the long run.

With Google Shopping, Google is offering a marketplace, and shop owners are taking advantage of this opportunity. One of the benefits is Google’s reputation as an unerring search engine. Users trust Google. Whatever appears at the very top of any search query results list immediately appears to be reputable, just based on its position. Google’s reputation brings about higher click and conversion rates.

For all those active in a highly competitive market, Google Shopping is absolutely vital today. The story is a little different for niche products. If there are too few competitors the advertisements are often not of many benefits. For specialized products, website optimization remains a more helpful alternative.