Google Checkout Launched...My Thoughts

Jul 1st

Google Checkout launched today. It is a payment system which revolves around Google storing your credit details and making it quicker to checkout at various stores. After having signed up and looked at it all I think this system will likely spread like a weed. The biggest reasons are:

  • Google AdWords is the largest online ad market.

  • Merchants who use the Google Checkout product will get a little shopping cart badge next to their ads, which could increase their ad CTR and thus lower their per click cost.
  • The pricing policy for Google Checkout gives you $10 of free payment processing for every $1 you spend on AdWords.
  • Google is a trusted brand.
  • Most shopping carts are garbage. This is all about making checkout quick, simple, and easy.
  • Merchants are not allowed to change the Google Checkout images. The Google Checkout images do a great job of conveying a fast, easy checkout.

Google uses AdSense as a way to spread their brand across the content portions of the web, but did not have much visibility on highly commercially oriented websites. Web = Google = web is really going to be pounded into people's heads as the Google brand appears on more and more websites. They are the leading monetization network across content sites, and now they have found a way to sneak into commercial sites in the middle of the highly visible conversion process.

This launch also gives Google another data point in the buying cycle, closing the loop from research right on through to purchase. In addition to giving Google a better idea as to the margins and size of a business this launch also allows Google to trust a merchant more based on consumer feedback and transaction history (although it is unlikely they would want to integrate that data point into the organic results too heavily because they would prefer to have an informational bias to the organic results since AdWords already puts commercial results in the search results.

It's pretty nasty how much power Google has right now. To do that in a decade is absurd. This is no eBay or Paypal killer though, as noted by Ars Technica. But in time, as this and similar programs evolve and this is integrated into the AdSense program (or related programs) it helps Google ensure they have the most efficient product recommendation cycle, which should keep them at #1 in the contextual advertising space unless 1 of 2 things happen:

  • they lose their market position in search because they are so afraid of manipulation that they drive their results into the void of irrelevancy (and they have been heading down that path recently, but they can get away with it because Yahoo! has not been very good at branding their search and Microsoft is irrelevant and does not even know what a brand is).

  • Microsoft decides to spend billions of dollars operating a distributed ad network at a loss to steal market share (although this is not too likely because this would create an arbitrage opportunity which would be heavily abused by people like me)

I may be coming and going this weekend (and my internet connection has been exceptionally unreliable the last few days) but if you want, I am offering $10 off my ebook price if you buy it through Google Checkout. This is a short time promotion (which may end sometime this weekend). I just want to see how this works from the merchant end to see how viable I think it is relative to Paypal. Please note that it may take a number of hours for me to get your ebook to you after purchase as I sleep sometimes (but rarely ;) and my internet connection has not been that great recently.

Update: Order button removed. Thanks to everyone who bought my ebook through Google Purchase.

Here are some more thoughts from my purchase experience.

  • Processing the orders was quite easy, but...

  • I do not like the idea of Google "protecting" my customers for me. Having them suddenly put a brick wall between my customer's email and my business is not seen as much of a value add from the merchant perspective.
  • I do not understand the point of cloaking a person's email address if you give me their name and physical address.
  • One of the two people who used the Google email cloaking stuff also had order problems with their credit card not going through.

Who is Google Purchase good and bad for?

  • I think it may work well for those who have such a large established brand that most of their traffic is for people already searching for their brand, but then again if you are operating at that scale having Google play middle man with some of your customer emails might suck.

  • If you are heavily reliant on search traffic this could put a squeeze on your business. Trusting Google to constantly make the market more efficient when they profit from advertiser inefficiencies is somewhat altruistic for a merchant to do.
  • If you are new to the market and are confident in your product quality I think Google Purchase can be a way to make it easier for Google to learn to trust you and understand what other products and services your business relates to, but even then you are self selecting your site to be commercial in nature, which may not be a good since their search results have an obvious informational bias.
  • If you do not have a website and are just listing a couple products on Google Base and are in no rush to sell the items then Google Purchase can be useful.

Eventually Google will probably use purchase details, search history, and other information consumption habbits to make their AdSense program a more efficient ad/product recommendation engine (think of the Amazon emails and on site notifications that say people who bought x also bought y).

It might be worth thinking about that as one of their end goals and playing with Google Purchase to see how it works and how you can integrate it into your system, but like anything Google Purchase is just a small step in a direction and they are starting off slow, so I do not think it is a make or break now or never thing for most merchants.

If you are a market leader with a low price point and broad distribution you are giving Google a ton of relevant usage data back to refine their ads, especially when weighed against how little value they are adding to your business.

But they do give you a logo :)
Google Checkout Cart Image.

Published: July 1, 2006

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Comments

agent
July 12, 2006 - 6:08am

Hello guys!

So does this article mean that if a client asks me to work on a shopping cart for him I must recommend the use of AdWords instead?

October 12, 2006 - 5:14pm

Now that a couple of months have passes since the release, has anyone had some good experience with Google checkout? Does it have any annoying bugs or does it work perfectly?

August 29, 2006 - 4:00am

Can anyone explain the process of selling eBooks using the Google Checkout service? Do I still have to manually email out the eBook to the buyers? If so how do I do this if Google is not giving me the purchasers' email addresses?
Cheers
billy

July 6, 2006 - 3:32pm

I can accept payments for services which is cool.

I tried it out and was pleasantly surprised to not be kicked out.

This has allowed me to shave $$s off my fee which is too low as it is ;)

Nice one G....

David
Charlotte NC

BTW the SEO Book is well worth it

August 21, 2006 - 8:44pm

One point not mentioned in the article or comments above is the value of getting a free link to your store from Google: http://www.google.com/buy/m.html. These are already showing up in backward links and for us is the convincing argument to put Google Checkout on our ecommerce sites.

Kyle
July 1, 2006 - 8:18am

Looks like a good deal for retailers. Their transaction rates are much more competitive for smaller merchants than PayPal's comparable service is. I think I'm going to use G Checkout, as well as G Analytics on a new site of mine. Give them all the information they want and see how they treat me.

misterpinkey
November 23, 2006 - 11:14pm

Why do more people not seem to care about the fact that you are giving google the right to check your credit report whenever they want?! That is a bad thing, not a good thing. A very very bad thing. Hardly anybody seems to care about that though.

CharlesMartel
July 1, 2006 - 8:56pm

Google will be able to measure your conversion rate and that may affect how much you pay for your ads. I don't think it's a good idea to put any Google technology on your site. They just use it to data mine.

CharlesMartel
July 1, 2006 - 8:56pm

Google will be able to measure your conversion rate and that may affect how much you pay for your ads. I don't think it's a good idea to put any Google technology on your site. They just use it to data mine.

July 1, 2006 - 10:02pm

OK I voted with my wallet (so to speak) and bought Aaron's Book.

I am an advanced SEO type person ;) but will doubtless gain more from this book.

I'm a regular at this site so WTF - buy the book :)

The transaction through Google Checkout was the easiest purchase I've made in my 9 years on the www.

It was sort of too easy - I say that in a complimentary tone. I spend $1000s on the internet every year - this was way cool and very simple.

Checkout will do extremely well and I shall use it often.

Nice one Google

David

July 1, 2006 - 10:21pm

I have to agree with David.
I purchased the book around midnight last night (and got it at 3am. When do you sleep Aaron?) but the point is that Google Checkout has moved us past things like 4 and 5 step check out processes (the sort that result in dropped carts)

It will make impulse buying online easier.
...like my wallet needed that.

I'd like to hear your thoughts from a merchant end-- supposedly a few bugs have already been discovered.

July 2, 2006 - 3:59am

Paul thanks for agreeing - I usually get into blazing pi$$ing contests here and there.. Hi Doug ;)

I do wish I could accept payment for services with Checkout - this would get me off Paypal totally.

As you said Paul it does make the impulse purchase easier.

I have been meaning to by Aaron's book for awhile and Checkout saved me a lot of time messing around with carts and tacky upsells.

If anyone has any tips about accepting "services payments" I'd be most obliged to you.

Cheers

David

July 2, 2006 - 7:20pm

Ok, the thing is great - no one doubts.

But what about restrictions? Some of them are perfect. I love Google prohibiting:
- "Subscriptions to online or offline content (including magazines and newspapers";
- "Memberships or enrollment in clubs offering wholesale or discounted goods";
- "Businesses that recruit members and offer them rewards for recruiting others and/or selling services" (they beat MLMs - ok, but what about other affiliate programs);
- "Tours (including hotel, flight, and car reservations), travel clubs, and timeshare properties".

Surely, some of the things that Google prohibited in the list are 100% ok, but the ones I mentioned ignite doubt. See the full list here
https://checkout.google.com/seller/content_policies.html

July 2, 2006 - 9:29pm

so can you have this google payments system set up for like a subscribtion to a forum or something like this?

Marcus
July 3, 2006 - 5:16am

I agree with several of the comments above. I have used PayPal as an option on most websites I build for clients because PayPal is recognized world-wide as a trusted merchant account. Google is just as recognized (if not more recognized) than PayPal and will become very popular by the end of the year.

I decided to buy the SEO book because I just couldn't resist the temptation of the blue Google button. And I foresee many problems with my poor wallet in the future because Google has just created the easiest-to-use checkout process ever!

Congrats Google.

Michael
July 3, 2006 - 5:38am

This is the reason I'd NEVER use it:

From the Term of Services:

“You also authorize us to obtain from time to time a credit report and/or to otherwise make credit or other background inquiries as we deem appropriate to evaluate your registration for or continued use of the Service “

July 3, 2006 - 5:48am

I am a little disappointed that it was only released for US clients to start with. Guess I will have to wait a little 'til I can officially use it... I am sure that it wan't be too long though!

The lower costs are also a main attraction for me!

July 3, 2006 - 6:22am

Hi Michael
I believe Paypal also does credit check stuff. In fact they just did one on my account this past week.

July 4, 2006 - 10:15pm

Kind of disappointed that I missed your $10 off Google Checkout offer
Would have been interesting to try this new service

Any chance of you offering this again?

Thanks
Rose

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