Google Launches Price Comparison Ads

30.10.2009 Posted in Search

Today Google announced the introduction of AdWords Comparison Ads. In brief, these are a new format based around a price comparison engine. Google offer an example of a search for ‘mortgages’, resulting in an ad showing a comparison of rates from different advertisers plus an option to view different rates depending on whether the mortage is for a new purchase or refinancing.

The introduction of innovative new formats is always welcome, and Google is right to respond to the huge growth in price comparison services over the last couple of years. However the new format does raise an interesting issue.

The fundamental dilemma of any paid-for price comparison service is how listings should be ranked. Consumers want to see the most competitive rates or prices at the top of the list. However this is generally incompatible with the site operator’s desire to maximise revenues. The result is that it is often possible for an advertiser with a big budget to buy their way to the top of the listings, regardless of how competitive their offerings are.

The issue has been around since the very notion of comparison sites was first mooted. When Froogle (later renamed Google Products) came along, it seemed to offer the perfect answer. As a free service, it seemed it was destined to be the first truly objective way to compare offerings. Google Products offers tangible stuff only - it’s not possible to search for mortgages, or broadband deals, or insurance, but the same principles apply.

However, the reality has been a bit of a disappointment. By default, Google Products lists its results sorted by relevance. A search for a specific model of flat screen TV (for example) may turn up results from dozens of retailers, but deciding why some of these are more relevant than others is inevitably a fairly arbitrary process. Google Products does offer listings sorted by price, but the threshold of relevance required to qualify for inclusion in the results pages is so low that the result is usually a list of hundreds of cables, accessories and spare parts that have little or no relevance to the search term.

Google is a great innovator and I wish them well with the new format. But sometimes I wonder if they might be wise to invest some more time perfecting their earlier endeavours, and learning as much as possible from these, in order to help shape their future efforts.