In a CNBC survey of several advertising execs, it was found that there are some advertisers who are shifting large percentages of their Google search budgets over to Amazon. According to two executives, some advertisers that are selling are selling on Amazon are moving 50 percent or more of their search budgets to Amazon.
Amazon has been busy building up a sizeable ad business over the last few years, and reported about $2 billion in advertising sales last quarter. This is an increase of 129 percent year over year. Compared to Google’s almost $23 billion in ad revenue last quarter, it doesn’t seem like much. But when it comes to the digital advertising landscape, Amazon has the great opportunity out there, especially for consumer goods companies selling on the platform.
Amazon’s direct correlation to sales is Amazon’s key to success. For Google, it was by connecting advertisers to search intent. Amazon has the ability to go even further and connect advertisers directly to purchase intent and purchasing all right on its platform. Google’s been busy working on a number of initiatives to eliminate purchasing friction and deliver similar connections for retailers and advertisers. Google Shopping Actions recently enabled mobile checkout across a network of retail partners from Search, Google Express and Google Assistant.
Amazon’s ad programs are proving more than irresistible for both merchants and brands selling on Amazon. “Every company I know that sells on Amazon is basically moving budget to Amazon because they have no choice,” Mark Douglas, CEO at Steelhouse, told CNBC.
Amazon Sponsored Products and Sponsored Brands (formerly Headline Search Ads) — pay-per-click product search ads — are becoming table stakes for sellers. Those familiar with retail placement fees — those endcaps don’t come free — will see similarities here.
The findings are in line with Search Engine Land’s Amazon advertising research, who will be presenting at SMX East on October 25.
More on the findings
- Budget shifts are coming primarily from consumer packaged goods companies.
- A Havas Media exec said 20 to 30 percent of its clients are moving 50 to 70 percent of search budgets to Amazon.
- Two executives cited Amazon budget increases of 300 to 400 over last year.
- Some perspective: A Merkle executive said they aren’t seeing search budgets shift to Amazon, but that Google spending is flat.