Amazon, that online bookstore that started in 1994, is now a formidable player in the digital advertising world. How and when did this happen?
To answer that, we will have to go back to October of 2003. Amazon launched a subsidiary company called A9.com, the focus of which was to develop search and advertising technology, or their own algorithms, if you will.
Developing their search technology was the first priority. It wasn’t until 2006 that Amazon released “Clickriver” which let companies place advertising on product pages. The catch was, Amazon would only allow companies whose products or services did not compete directly with Amazon products. Clickriver was discontinued in 2010, but Amazon's eye on attracting advertising dollars did not end there.
In 2012, Amazon launched Amazon Marketing Services which offered products, search, and display ads to third-party vendors. Finally, in September 2018, Amazon rebranded Amazon Marketing Services to Amazon Advertising.
So how does Amazon differ from Google Ads? Good question.
Same but Different
The advertising products Google and Amazon offer are almost identical from a 30,000-foot view. Take a closer look, and some of the differences may sway where a vendor is going to spend their advertising dollar. Here are some high-level differences:
- Google search browser gets about 3.5 Billion visits a day. Amazon gets approximately 13 Million visits a day.
- Google searches include a vast number of subject matters. Amazon searches are almost always going to be product purchase or product research related.
- When you click on a link from a Google search, you are taken off Google’s site. When you click on an Amazon ad, you never leave the Amazon site.
- Google search users are higher in the sales funnel than Amazon search users.
Google isn’t Worried…Yet
Google is not immune from sharing the digital advertising space. Ever since Facebook took over market share on mobile advertising in 2012, Google has not been challenged like this. It is also worth noting that Facebook is currently (as of 2018) the #2 largest digital advertising platform. You would think that Google might be sweating in a bit, but I doubt it.
Google’s Digital Advertising is Up
The economy is doing well; companies are willing to put more money into advertising to attract new business. According to an article by CNN, Google’s ad business is up by 23.8% from Q2 2017.
Google is the dominant digital advertising platform in the U.S. and will take in an estimated 37% of digital ad budgets in 2018. As you can see from the chart below, Amazon is still a good 30% behind Google as far as market share is concerned.
Not Everything Can Be Sold on Amazon (Yet)
Amazon does sell a lot, 562 Million products according to Scrape Hero. But 562 Million does not include everything. Amazon can’t help you find a cleaning service, change your oil in your car, or even file your taxes for you. Not yet anyway. Consumers are still going to go to Google to find what they need.
It’s also worth noting that Amazon’s business is considerably less developed outside the United States, including some countries in the Asia/Pacific area.
Even Amazon Advertises on Google
You read that right. Amazon spends advertising dollars on Google Ads to promote their platform and products. And they have been advertising with the giants for years, with the exceptions of a short break they tried in 2012, 2015, and as recently in May 2018. It seems that not even Amazon can quit Google.
Shifts in Advertising Dollars
Advertisers are still shifting more and more of their advertising budgets to Google Ads, and away from traditional mediums like television, radio, and print, especially companies that currently don’t have a reason to advertise on Amazon. Think travel, sports/movie events, and service-based businesses.
We do not subscribe to the idea that there is “one” magic advertising silver bullet. We believe it to the point where we make sure new clients who partner with us do NOT spend their entire budget with us. While today’s consumer is connected to the internet via a computer, tablet, or phone almost every waking hour of the day, the consumer still listens to music and watches television in some capacity. Heck, even Google and Amazon advertise on television.
The Amazon advertising platform is another avenue for companies to acquire customers. It is a service we recommend to our clients when it is appropriate and in their best interest.