The Wall Street Journal reports this morning that there appears to be some movement of online ad dollars from Google to Amazon, which the story says is “a sign of how the online retailer is capitalizing on becoming the top destination for consumers’ product searches.”
One example: “WPP PLC, the world’s largest ad buyer, spent about $300 million on behalf of its clients on Amazon search ads last year, and about 75% of that money came from Google search budgets, according to people familiar with the matter. It spent between $100 million and $150 million on Amazon search in 2017, the people said.
WPP spent north of $3 billion globally on Google search advertising last year, one of the people said.”
The Journal points out that “while Google has long been the dominant player in online searches of all sorts, some 54% of people looking for a product now begin their search directly on Amazon, a jump from 46% in 2015, according to Jumpshot, a research firm that collects data from 100 million devices.”
One example: “WPP PLC, the world’s largest ad buyer, spent about $300 million on behalf of its clients on Amazon search ads last year, and about 75% of that money came from Google search budgets, according to people familiar with the matter. It spent between $100 million and $150 million on Amazon search in 2017, the people said.
WPP spent north of $3 billion globally on Google search advertising last year, one of the people said.”
The Journal points out that “while Google has long been the dominant player in online searches of all sorts, some 54% of people looking for a product now begin their search directly on Amazon, a jump from 46% in 2015, according to Jumpshot, a research firm that collects data from 100 million devices.”
- KC's View:
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At its most simplistic, this trend has to be viewed by retailers as just one more way that Amazon is rigging the game in its favor. Not that it is doing anything wrong, but by playing chess instead of checkers, Amazon is generating yet more revenue that gives it a financial advantage everyplace else it wants to be competitive.
This should scare some folks.
Here’s what Deren Baker, Jumpshot’s CEO, tells the Journal: “I have to pay them for a top placement [in search results], I have to give them a cut of the money that I might generate if that product is sold, and Amazon might try to market their own private label for the exact product that the customer is looking for. If I was an advertiser, I would be a bit worried.”
