Amazon Suddenly Drops Out of Google Shopping PLAs

After testing the waters for less than a year and a half, Amazon has stopped bidding on product listing ads on the Google Shopping service, according to data tracked by performance marketing agency Merkle, opening the door for home goods sellers in their absence.

Amazon began bidding on Google Shopping ads in December 2016, specifically in the home goods category but then expanding into the ancillary category of office furniture, as well as in sports apparel. Amazon could not be reached for comment.

“Evaluating a set of advertisers across these product categories that have consistently seen Amazon competing in their (Google) Shopping auctions, Amazon has vanished from Auction Insights reports on April 28 across all device types and hasn’t reappeared since,” wrote Andy Taylor, Merkle’s associate director of research in a blog post.

Taylor said Amazon began stepping up its bidding activity in May of last year, with more home goods sellers seeing them in Google auctions, adding peripheral categories before levelling off in Q4.

“Given their expansion we expected (Amazon) to continue in 2018, additional categories and getting more aggressive in auctions where they were already present,” Taylor said. “But in Q1 we saw it turn with impressions declining, before shutting it down completely.”

While admitting the impact of Amazon’s absence from Google PLAs is hard to quantify, Taylor said it’s a net positive for advertisers in those categories. “They’ll start getting traffic that had been heading to Amazon,” he said. “It also has the potential to slow down cost per click (CPC), where we had seen meaningful growth in the last few quarters. Having a competitor as large as Amazon removed from auctions certainly won’t hurt CPC from an advertiser’s perspective.”

While Amazon has increasingly been a starting point for product search at the expense of Google, Taylor said there were probably other factors at play in Amazon’s decision to pull out of the PLAs.

“It’s hard to say if the past year and a half was the test, or this is the test now, shutting off PLAs to see what the incremental loss is and the effect on the bottom line,” Taylor said. “Or the test could be, what share of orders come to their site by not having ads running. Or it could be as petty as going after Google. For years Amazon refused to participate in their auctions, which was always kind of weird. It could be about Google as a competitor, not giving them ad spend and potentially their data.”

Another factor in Amazon’s pullout decision may have been the emergence of Google Shopping Actions in late March, using the same pay-per-sale commission basis that Amazon does on its marketplace. At the time, Google said it had partnered with major retailers like Ulta Beauty, Target and Walmart by allowing them to list their products across Google search through the Google Express shopping service.

“That put Google more in direct competition with Amazon, so it could have played a part, although we saw Amazon’s impression share start to decline ahead of that news,” Taylor said. “Or maybe someone at Amazon got wind of Shopping Actions ahead of time, which added to the Q1 decline in impressions. But the new Google ad format is certainly competing with what Amazon is trying to do.”

Partner Content

Hincapie Sportswear Finds Omnichannel Success in the Cloud - Netsuite
For more and more companies, a cloud-based unified data solution is the way to make this happen. Custom cycling apparel maker Hincapie Sportswear has leveraged this capability to gain greater visibility into revenue streams, turning opportunities into sales more quickly while gaining overall operating efficiency. Download this ecommerce special report from Multichannel Merchant to more.
The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.