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Can Google change mobile shopping behavior with a buy button?

In potentially significant news for mcommerce and Google, the search giant is reportedly preparing to add buy buttons to sponsored search results on smartphones, a move that could create a new mobile shopping experience while helping drive up cost-per-click rates.

Mobile users who click on a buy button in a sponsored search result on mobile will reportedly be taken to a product page where they can choose the sizes and colors as well as complete a purchase. The product pages will feature a retailer’s branding, with Macy’s reportedly a possible launch partner.

“With consumers expecting a different (and quick) experience while trying to complete their desired action on a mobile device, Google is taking things into their own court by providing the purchase funnel on their side,” said Danielle Mahoney, senior group account director of paid media at The Search Agency.

“They likely have flexibility to test and get data to improve conversion rates, without relying on their advertisers to do so, and in turn provide a better experience for consumers,” she said.

“Google also stands to gain additional information about the customers using this feature, which in and of itself could provide value to them later on in other ways.”

A different experience
The news that a buy button from Google is imminent was first reported in the Wall Street Journal. For months, there have been reports from numerous sources that such a move would be coming.

Google is trying to streamline the shopping experience for mobile users. Retailers will still be providing and selling products.

In addition to being able to complete a purchase from a sponsored post, the buy button experience will reportedly enable shoppers to input their payment information once and then store this data for future purchases.

The buy buttons will only be shown on mobile and will initially be tested with a small group of users.

Making money on mobile
Unlike online marketplaces such as Amazon and eBay, Google will be paid by retailers like any other advertiser as opposed to Google taking a cut of the purchase price of items.

“If Google is able to create a mobile shopping experience that encourages more consumers to start their shopping process on Google rather than on Amazon or in an app, that will be a major benefit to both Google and its advertisers,” said Mark Ballard, director of research at Merkle|RKG.

“This type of change in consumer behavior isn’t likely to happen overnight though, so it could take years before we’re able to get a sense of the full impact of a change like this,” he said.

The move reflects Google’s need to boost its monetization strategy on mobile, where CPC rates are lower than on desktop, yet traffic on mobile continues to grow.

“Mobile continues to represent a growing share of search traffic, but the average cost-per-click that Google generates on phones continues to lag behind desktop and tablet cost-per-click by a significant margin,” Mr. Ballard said. “Among Merkle|RKG clients, we found that phones produced 24 percent of paid search clicks in Q1 2015, but only 10 percent of paid search spending.

“The biggest factor in this discrepancy is the relatively poor conversion rate of phone traffic, so if Google can help increase phone conversion rates by streamlining the mobile shopping process, advertisers will be willing to increase the amount they are willing to pay for phone clicks,” he said. “This would undoubtedly help Google revitalize its revenue growth, which has slowed appreciably in recent quarters.”

Mobile disruption
It is no surprise that Google is considering a buy button.

Mobile-driven platforms such as Facebook, Twitter and others have been considering or adding buy buttons during the past couple of years.

Retailers may not take well to the news if Google begins to usurp their relationship with customers, relegating merchants to more an order-taking and fulfillment role.

One way Google will reportedly try to address retailers’ concerns will be by enabling shoppers to opt in to receive offers and messaging from the retailers they make a purchase from.

Google’s Product Listing Ads, which were launched a couple of years ago, are another indication that the company is interested in figuring out how it can play a role in streamlining the mobile path to purchase.

PLAs include a product image and basic product information. They typically appear as a series of sponsored posts that users can swipe through.

The success of PLAs suggests that mobile shoppers quickly understand the progression from searching for a product on mobile to making a purchase.

While Google’s buy button points to how mobile services can be disruptive, the solution will have to overcome shoppers’ ingrained behavior of going to retailers’ sites and apps to conduct product searches.

“There is no longer the need for a mobile strategy within digital; rather, digital strategies must be built on top of mobile,” said Elizabeth Jackson, chief marketing officer and corporate strategy executive vice president at HookLogic.

“Searches on mobile now exceed desktop in many categories and channels, as consumers use their mobile phones at all phases of the shopping journey from research to consideration to purchase,” she said. “Therefore it is critical to follow the shopper and be where the consumer converts to become a shopper.

“Some of that may happen on Google so they need this to compete; however, shoppers today are still beginning more of their product searches on top retailer sites where most conversions will still occur.”

Final Take
Chantal Tode is senior editor on Mobile Commerce Daily, New York