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Google is offering merchants free use of its online payment service as it squares off against eBay's market-leading PayPal.
The Internet search giant introduced Google Checkout in June, with sweeteners such as free ad credits for merchants. In November, it began offering rebates to consumers, $10 off $30 purchases. PayPal quickly matched the offer.
Wednesday, Google ratchets up the pressure by dropping merchant fees through 2007.
Ecommerce: Google Offer Takes on PayPal [usatoday.com]
This is not a small issue, some folks are calling Google a "parasite" who are doing affiliates out of their legitimately earned commissions which they've rightfully earned by customer referrals.
Google won't say how many consumers have signed up for Checkout accounts.
PayPal says it has 123 million consumer account holders.
Therein lies the problem for Google I guess.
Why oh Why didn't Google put more into the marketing of Google Checkout before it was released? There was a real buzz around the launch of PayPal Pro last year and it seems Google missed the trick this year.
Prior to doing Google checkout, the CTR on a highly competitive phrase bidding a top 3 position was 4.2% on Google search queries. After adding the Google checkout, the CTR went up to 5.6% on Google search queries. This is a 33% increase in CTR!
For those using Google checkout, the adwords ad shows up with a little shopping cart gif and the words Google Checkout below the ad. IMO, this looks like an endorsement and gives the ad more credibility.
Since the Google checkout is integrated with Adwords, chances are you will be spending more money than with another processor / IPSP (internet payment service provider). It acts like a gateway but there are subtle differences. Whereas most gateways do not charge a discount rate, Google charges a discount rate and a transaction fee. Other differences can include the limitations, restrictions and reserves applied to checkout accounts. There is also a monthly dollar limit that might be applied to merchants and merchants might process hundreds of dollars before funds are released. And Google might require a merchant to have a payout reserve before they receive any funds.
A affiliate calling another party a parasite is a first!
Affiliates are the reason many companies are able to stay in business. Most internet companies don't have a clue how to market their own business and drive traffic to their sites.
They are by no means parasites. They are basically commissioned marketers.
To have that commission stripped away by Google says a lot about one of the companies many goals in my mind.
[edited by: Philosopher at 2:52 pm (utc) on Dec. 6, 2006]
If this is correct as I haven't seen it or recieved an email notifaction yet this is millions of dollars in savings for us merchants, this ain't chicken feed this is some serious money here and it is a huge boost in getting a market share or taking it over.
we sold an item for a large sum of money and used Google Checkout for processing it, saved us 200+ bucks in processing fees.
It is for real mam this is awesome a huge savings for me us Thanks Google I know you are doing it for a reason but it sure is nice to be along for the ride.
[edited by: bwnbwn at 3:25 pm (utc) on Dec. 6, 2006]
Why didn't Google put more into the marketing of Google Checkout
Typically Google spends $0 on marketing. They insist that if a product is really good, everyone will start using it and they needn't spend a dime on promotion.
With Google Search, AdSense, Maps, Earth and Gmail, the products are awesome and they need no marketing. Other Google products are mediocre or bad - the public will sort out which ones deserve praise and popularity.
Are you not excited about Google Checkout? Maybe Google Checkout isn't good enough to get excited about. Proof that their philosophy is sound.
Maybe Google Checkout isn't good enough to get excited about.
My site offers a site-service and really requires a micro-payment facility (lowest cost is currently 1 GBP Pound - £1), so annulment of processing fee got me excited.
Did masses of reading (since it would require use of the API), decided it was a go-er for me, started the signup process....
...and discovered I needed to be located in the USA.
Here are Novembers stats
65% Customers used google check out
29% Customers used authorize
6% Customers used paypal
Before Google checkout
57% Customers used Authorize
43% Used Pay Pal
So google is taking a huge bite.
Feed back we are getting from customers:
1. Pay Pal Customer Service is poor!
2. Pay Pal phfishing emails are effecting customer accounts!
3. People trust google more than Pay Pal with their money!
We have already dumped Pay Pal options from our site because of bad merchant customer service and their hi fees!
To set the record straight, I don't think anyone is accusing Google of being a parasite or purposely washing cookies or causing sales not to track. True that MOST affiliate commissions are NOT tracking through Google Checkout - NOT TRUE that Google is doing it on purpose. It's actually more of an issue with merchants and networks.
Here's the deal. To track, a merchant needs to place the tracking pixel on a specific page on THEIR cart. If a merchant added Paypal as a payment option and consumers could choose which payment method to use and the merchant had not implemented the tracking pixel with Paypal then it would also be a serious commission leak and sales through Paypal would not track either.
At 1st I thought Google didn't offer a way to track sales.
I now believe there is a way for merchants to set up tracking so it will work with Checkout because some merchants have done it. It takes extra work to figure out and implement though and CJ has said they are still trying to figure it out.
So bottom line, Checkout hit hard with lots of merchants joining fast due to the promotions and it's all happening during the holidays - the busiest time of the year for everyone. Merchants and networks SHOULD have thought about this and worked out tracking issues sooner, but I don't think any of this was intentional on anyone's part.
All Google is trying to do is push Checkout and tons of merchants joined suddenly. Then suddenly in the heat of holiday sales season, affiliates realized there was a problem and bloggers started blogging. Now some pro-active merchants on some networks have figured out a way to fix it, but it seems the majority of the big merchants on CJ may not make it until the holidays are over. Some merchants on CJ are doing internal tracking and manual batching of commissions in the meantime.
I don't know what affiliates can do at this point, besides asking your main merchants that are using Checkout if they have set up tracking. Maybe some have that we don't know about. My guess is most are too busy to even realize this is a problem yet, SO LET THEM KNOW AND PUSH THEM TO RESOLVE IT. Send them here and to some of the blogs to be sure they know what a big issue this is.
If the merchant does not have tracking set up maybe they can tell you what % of sales are going through Checkout and then decide if you want to switch out links to another merchant.
At this stage of the game, I'm hesitant to suggest changing anything though. Some affiliates are probably pulling links to all Checkout merchants. Not sure that's wise since many sales will still go through the merchant's cart. If I were an affiliate I'm not sure what I would be doing about it right now. Glad I'm not to tell you the truth. I know this really sucks.
It's an unfortunate situation. Networks should have seen this coming and been prepared but I think Checkout just crept up on everyone so fast that no one thought about it until the holidays hit and the whistle was blown. Sad!
[edited by: Catalyst at 5:03 pm (utc) on Dec. 6, 2006]
An increase in sales, and a decrease in cost of sales, what a no-brainer decision to keep G checkout.
However, the affiliate code drop is not good for my client's affiliates. If this is truly broken, it needs to be fixed. Time to do some checking on this issue.
Now tons more merchants will be jumping on Checkout. We need to find the solution and get this fixed.
Here's the Google blog about it.
It also mentions something new about integrating Checkout with your own cart. Possibly there is info in the new developers guide that will help
"Simple website integration: With the HTML API, integrating Google Checkout with your shopping cart is easier than ever. Simply add an HTML form to your website and use it to send us your shopping carts. Learn more in the new Developer's Guide."
Still have to figure out how to get the merchant cart to pass the affiliate tracking info to G and then how to get the Checkout transaction processed back to the network with affiliate id intact.
My site offers a site-service and really requires a micro-payment facility (lowest cost is currently 1 GBP Pound - £1)
I think PayPal now supports Micropayments for UK sellers. You would need to create a separate Micropayments account to get the micropayments pricing. (For more information, visit the PayPal Integration Center.)
A affiliate calling another party a parasite is a first!
That's got to be the most offensive thing I've read all day.
Affiliates are responsible for billions of dollars in sales, yet you call them parasites.
How does someone make a ridiculous, newbie statement like that on the biggest webmaster forum on the web?
Unless of course they want to somehow pressure merchants to accept it to compete it by making their sites more Google friendly or offering credits on services they are already using like Adwords.