AMAZON ADS IN GOOGLE SHOPPING
That may no longer be the case. As recently as late December, advertisers noticed Amazon testing Google Shopping ads on certain home goods products on desktop and mobile Google search results. The question must be asked, is Amazon waving the white flag or is something else going on?
AMAZON MARKETING SERVICES (AMS)
In 2015, Amazon expanded its advertising platform with the launch of Amazon Marketing Services (AMS). AMS is a vendor-only platform that enables product promotion through three ad formats (Sponsored Products, Headline Search Ads, and Product Display Ads), on Amazon.com. All available ad formats promote products that vendors currently offer on Amazon.com. Sponsored Products and Headline Search Ads use keywords to determine when they should appear in search results, in nearly the same way that Google and Bing do. Since vendors do not have the ability to take traffic from Amazon to their own websites, the entire shopping experience is self-contained within Amazon.com.
Now, I know what you’re thinking. What does AMS have to do with Amazon’s new foray into Google Shopping?
CONNECTING THE DOTS
As previously mentioned, Amazon ads have been seen in Google Shopping results for home goods product searches. So far, it doesn’t appear that Amazon is utilizing Google to advertise other product categories like electronics (except on their branded products like Fire Stick and Echo Dot), jewelry, or apparel.
So, what is Amazon’s motivation for re-engaging with Google Shopping ads? Are they trying to siphon off retail consumers from Google? Is Amazon starting slowly, or is there another reason they appear to be focusing on home goods? Could the true motivation behind this new venture be to raise the viability of AMS?
WHAT DOES IT ALL MEAN?
The most common assumption will be that after nearly four years, Amazon is no longer willing to stand on principle and avoid participation in Google’s most powerful and best performing ad format, Google Shopping.
Some flaws exist in this line of thinking. First, as fierce competitors for retail business, Amazon certainly doesn’t want to contribute to Google’s bottom line. And let’s face it, if Amazon goes head first into Google Shopping, they will likely become the largest advertiser within the ad format. Second, and even more impactful, if Amazon has a strong presence within Google Shopping, they elevate Google as the one-stop shopping destination. As things currently stand, any consumer looking for the best deal will undoubtedly check multiple places, including Google and Amazon. Being able to get both in one place could help increase Google Shopping consumer utilization. Third, and perhaps most compelling, is profit margin. Appearing in Google Shopping results, Amazon becomes a glorified affiliate partner for their vendors. They take the advertising costs on themselves, reducing their already low profit margins. Being a vendor affiliate might make sense when advertising high value items like 4k televisions ($249), but not something like measuring cups ($10.99).
Instead, we believe Amazon is utilizing Google Shopping as a new source of traffic to help boost sales and the viability of AMS. The more Amazon searches that occur, the more relevant AMS advertising becomes. And by taking shoppers out of the Google environment and onto an Amazon product page, the likelihood of additional Amazon product searches increases. By starting small with home goods, Amazon doesn’t open itself up to becoming Google’s biggest advertiser, and thus doesn’t send hundreds of millions to their biggest competitor. Additionally, by limiting their Shopping exposure to select product categories, Amazon doesn’t allow Google to become the one-stop destination they otherwise might become with a full-on advertising blitz. It is likely that home goods was chosen as a low-risk category to test.
Advertisers should pay close attention to traffic levels within AMS. If there are unseasonably large jumps in traffic, they should check to see whether Amazon suddenly increased their presence in Google Shopping within their product category. While everyone gets nervous about Amazon picking up where they left off in 2012 with Google, don’t lose sight of that other important advertising platform, Amazon Marketing Services.
In 2012, Google transitioned its free Google Product Search ads to paid Product Listing Ads (PLAs). Many advertisers were unhappy with the change, as it eliminated a steady source of free revenue. Despite protestations, nearly all Google Product Search advertisers eventually got on board and launched Product Listing Ads, with one very notable exception, Amazon. Amazon refused to participate in the paid PLA (now Google Shopping) space, despite its growing prominence and importance within the Google search results landscape.