Why Google's motor aggregator may struggle

Google could struggle to crack into the UK motor price comparison market, despite the strong public awareness of its search brand.

This is in part because the price comparison market is already crowded with similar services, and partly because of the deliberately low-key approach Google is taking in an apparent bid to avoid upsetting some of its biggest customers.

Google quietly launched its own-brand UK motor price comparison service on 10 September. The search company had been widely expected to make such a move since its purchase of price comparison site BeatThatQuote in 2011 for £37.7m.

The search specialist joins a raft of aggregators offering motor insurance, dominated by the big four - Gocompare, Comparethemarket, Confused and Moneysupermarket.

The market has proved tough to break into and some have admitted defeat even before launching. French insurance group Covea’s UK arm pulled plans for its aggregator in June.

Brand recognition not the only key

While the Google brand undeniably carries a lot of weight with consumers in car insurance, in particular because they frequently use the search engine to hunt for cheaper deals, some doubt its ability to make a big splash.

Aggregator-focused broker IGO4’s co-founder and executive director Tom Cooper contends that Google’s impact has been muted so far.

Cooper says: “It has been in play for a couple of weeks and we have yet to see a huge uplift in the number of quotations that are coming through from BeatThatQuote. I think it is an interesting development, but not a game changer.”

He estimates that the new Google motor aggregator could add 100,000 quotes a month to the overall volume.

“When you consider that we are talking about a 10 million quote a month market it’s not really going to change things an awful lot,” he says.

The company may also struggle to differentiate itself from longer-established competitors who are essentially offering the same service. Cooper said: “The technology that sits behind the comparison site is pretty good, but then it is for all the various sites.”

He acknowledges that BeatThatQuote has an extensive panel of insurers and so would not struggle to generate good prices for consumers. But he adds: “Consumers are now used to the price comparison sites that they may well have been using for a number of years now.”

Competitor vs client

Cooper believes that to make a bigger splash, Google would need to spend more on marketing to make itself more visible. But it appears the search giant is wary of drawing too much attention to its new motor price comparison service.

Google generates a lot of advertising revenue from price comparison sites, who pay for their adverts and listings to appear above the main search listings when a customer types ‘car insurance’ into Google’s engine.

If Google’s competing price comparison service gets higher billing, the other aggregators at best may wonder why they are paying Google for advertising space, and at worst, may complain that the search giant is giving an unfair advantage to its own service and stifling competition.

As this advertising makes up such a large chunk of Google’s revenue, the feeling is that the search company would not want to jeopardise this for an as yet unproven business line.  

One market source says: “The suspicion is that Google are taking a fairly softly-softly approach, because if they were to come in heavy-handed they could end up throwing the baby out with the bathwater. It could end up backfiring. Would they want a fight in a non-core market with a group who provide large existing source of revenue?”

Testing the waters

So is Google wasting its time? Probably not. The price comparison venture is in keeping with Google’s style.

It is known for testing the water with various projects and business models to see how they work and abandoning them if they do not bear fruit.

If its own-branded price comparison does not work out, it can still have exposure to this area through BeatThatQuote and will continue to generate advertising revenues from car insurance searches.

It is also very early days for Google’s motor aggregator. It may yet prove a hit with consumers.