Over the past two decades, Google (and search marketing in general) have played a pivotal role in the eCommerce industry, riding the wave of exponential growth that characterized the shift from offline to online sales. However, as we approach a maturation point, it is essential for retail executives to understand that this growth isn’t guaranteed, and the future landscape of search marketing will look significantly different from what we’ve grown accustomed to. 

We’ve ridden an incredible updraft, but now, we’ll actually have to flap our wings.

If I extrapolate from publicly available data, it suggests that search volume growth has slowed down considerably, essentially reaching a plateau (adjusted for Covid). Despite this, Google’s revenues continue to climb, pointing to a sea change that retailers should be aware of. Google is extracting more value per search, and as a result, retailers have to manage their return on ad spend all the more carefully, as that value is extracted from them, one way or another..

But how are they getting away with it?  Wouldn’t advertisers see their costs climbing, and know something was up?  Google appears to rely on ways to conceal the increasing pressure on cost-per-click (CPC) by diluting the averages with a large volume of low-value inventory. This includes mobile devices and non-search properties, which, while low-cost for Google, can still drive substantial revenue for them. They’re adding a lot of gristle to the sausage, and still charging prime cut prices for it.  Add a dash of survivorship bias to the stories marketers hear, and you have a highly misleading echochamber.  

The transition to mostly mobile devices is another important factor to consider, as these devices generally have lower conversion rates than desktop or laptop users did. As retailers observe shrinking conversion rates (as the ratio of device types shifts even more mobile), it is crucial to understand not just the averages, but the behavior of the segments that contribute to those averages.  Otherwise, it’s very easy to come to the wrong conclusions–and Google’s banking on that.  Your traffic might be the same, but if it is made up of fundamentally different visitors, your outcomes won’t be the same at all.

As Google reaches this new stage of maturity, we will continue to see more and more reporting opacity, as that’s how Google will continue to obfuscate their own revenue priorities.  There is zero chance that Performance Max campaigns launched without negative keywords by coincidence, for example. 

They are subsidizing their worst inventory with the surplus of your best segments (your brand’s own terms, for example).  Further, if everyone is using the same automation (Google’s own), then the relative advantage of that automation is eliminated.  Real competitive advantage, it turns out, will still come from the skill of the human operator managing the campaigns–they are the only guaranteed difference among competitors in the same niche, after all!  That management is just becoming more subtle, not less critical.

Google’s audience just isn’t growing like it used to be, and the way they manage their platform will continue to reflect the pressures that searchers, advertisers, and especially shareholders place on them.  It’s harder to build a name in a mature, saturated ecosystem, but that just puts additional pressure on the responsible stewardship of what remains a massive part of any Ecommerce site’s volume.

Roy Steves, CEO & Co-Founder of StatBid, an efficiency-first search marketing agency, specializing in eCommerce.  His background has always been at the intersection of marketing and technology within Ecommerce.  Originally a developer, he developed marketing attribution systems, marketing automation, and testing tools.  That company was acquired by a national brick and mortar chain, where Roy’s analytical proclivities took root in a much larger data set.

After years of sharing stories of adventure from that analysis, presenting at conferences like Etail and SuiteWorld, Roy decided to switch from in-house operator to agency founder.  In 2015, StatBid began, focused just on bid optimization, but is now a team of about 15 eCommerce marketers, analysts, and experts, still serving many of the same eCommerce websites 8 years later.