Small Business News

Why Google Bought Channel Intelligence

Last month, Google signed an agreement to acquire Channel Intelligence to improve Google Shopping. At the time, a Google spokesperson told WebProNews, “We want to help consumers save time and money by improving the online shopping experience. We think Channel Intelligence will help create a better shopping experience for users and help merchants increase sales across the web.”

Earlier this month, the deal was finalized. We had a Q&A with Channel Intelligence CEO Doug Alexander and co-founder Rob Wight about why this was a good pick up by Google, and how search-based ecommerce is evolving.

Neither will be working for Google. Wight will continue the role he began two years ago, as founder and CEO of myList, and Doug Alexander will support him in this role while he continues as President of ICG, the company Google bought CI from. myList was spun off from Channel Intelligence in 2012, and it has operated, and will continue to operate as a separate entity.

“[Brand visibility in ecommerce] is important for the same reason that it’s important to be on a shelf in a store,” Alexander tells WebProNews. “It is how you get into the consumer’s decision set when they are ready to purchase. And just like in a store, brands that do a better job of merchandising and a better job of giving the customer the complete and accurate information they need to make a purchase (correct pricing, sizes, availability, etc.) will be the brands that customers choose to buy.”

“[Google's new paid inclusion model for Google Shopping] gives Google an opportunity to create better shopping experiences for consumers,” he says. “Now that it is paid, retailers will focus on presenting the very best offering to win the consumer’s attention. When it was free, it was easier for retailers to treat this channel more casually.”

“For over ten years, CI has focused on making it easy for consumers to find and buy products online, whether the buying process initiates on a brand’s website or on a shopping platform,” he says, on why this was the right acquisition for Google. “Our expertise with product data optimization and our deep relationships with retailers, manufacturers, publishers and agencies makes CI a natural fit with Google’s ongoing innovation to create outstanding consumer shopping experiences.”

“It should help all businesses, regardless of size, be more successful in reaching consumers with their products within Google Product Search,” he adds. “What will it mean for consumers? It should mean that consumers will have an even easier time finding, researching, and buying products online.”

Wight thinks search-based ecommerce is evolving into a more social media based experience.

“One of the places people naturally go when they’re thinking of making a purchase is to their friends,” he says. “You’ve seen the studies – Nielsen reported a year ago that 92% of people say they trust recommendations from people they know … which is well over the 47% who said they trust ads on TV or in magazines. Social media enables this discovery process to happen online, and people are already trading information – lots of information – there about the products and services they trust. It’s just still in a really fractured kind of way, with one-off conversations and, generally speaking, incomplete information, which is inefficient. So it’s not a matter, necessarily, of people changing anything they’re doing on Google. It’s more a matter of making what they’re already doing in offline conversations and within social media a lot more effective, and hopefully a lot more fun.”

“A friend of mine posted a really cool GPS tracking watch the other night,” says Wight. “He was raving about it. I was really intrigued, and pretty sure I wanted one too, but I didn’t want to leave where I was to go search for the price, colors, retailers, and all of that, so I just kept scrolling. If the picture my friend had shared has included the important product info, had shown me that 5 other of my friends already also had the watch, and had a simple link to buy it, I’m pretty sure I’d have made the order right there.”

“There are a lot of ‘disembodied heads’ of products floating around in social media,” he adds. “Just pictures, with a comment or a like. They’re just begging to be gathered up into one complete representation of the product, along with the rest of the kind of merchandising they’d get in a store, or that the brand would put on their product page on the brand site.”

Wight also sees another opportunity in social for brands to be able to act with more knowledge.

“This is good for consumers, for the brands, and for the social platform,” he says. “Ads are spam when they’re irrelevant, but [when] they’re relevant, they’re welcome. Google has done a great job with this: when I search for, say, a wetsuit, Google shows me ads for wetsuits. Helpful. I love that. I’ve told Facebook that I like triathlons, but up until now, there hasn’t been a way for me to signal when I’m in the market for a triathlon bike. If I’m talking about them, posting pictures of them to friends, pulling together a list of ones I might want to buy, that’s hugely useful for the brand to know, right? What brand wouldn’t advertise to me on Facebook if they knew I was actively interested? And as a consumer, these advertisements would be welcome, not an intrusion, because they’d be relevant … meaning I’d value the ads more, the platform more … a win for everyone.”

Google acquired CI for $125 million.

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