It looks like Amazon is following Google’s lead and is quietly testing product listing ads.
While for years Google was the number-one online destination for shoppers searching for products across desktop, mobile and tablet, it has recently lost its top ranking as a product search starting place to Amazon.
According to a BloomReach survey last Labor Day, 55% of U.S. consumers now start their shopping searches on Amazon, up from 44% percent in 2015. Google, meanwhile, is trending in the other direction: Only 28% said they begin their product search with search engines like Google, down from 34% in the prior year.
In a recent blog post, Mark Ballard of Merkle said marketers have noticed and been alerted to Amazon product listing ads, but that it hasn’t been easy as one would expect to trigger an Amazon PLA if the ecommerce giant were aggressively pursuing this.
Ballard said that for about half of the programs he checked, Amazon is not listed at all, but for the others, it first pops up on Dec. 20. It is anecdotal, but Amazon seems to be showing up more consistently for home goods retailers.
“Amazon and Google are competing with one another to be consumers’ first stop for online shopping,” said Ballard in an interview. “By participating in PLAs, Amazon makes Google Shopping a more exhaustive and attractive search option for shoppers, but it will also end up producing more traffic and customers to Amazon.”
Ballard said Amazon testing PLAs seems like a win-win in the short-term. But the big question, he said, is how it will play out in the long run, and whether ultimately the benefits to one of the two online giants outweigh those for the other.
“Amazon Prime has been successful in locking in users and making them more loyal Amazon customers,” said Ballard. Google Shopping ads would help feed sales in the short term for Amazon but they would also feed the Prime program, where members are known to spend more than non-Prime members.
While Google Shopping may be more attractive to shoppers with Amazon participating, Ballard said it won’t help Google much if large numbers of new people sign up for Prime and opt not to compare products across other retail sites using Google.
“Amazon will never generate 100% of ecommerce sales, but its share could certainly continue to rise,” Ballard said. “Running PLAs will help Amazon while also negatively impacting the businesses of its competitors who spend a lot on Google Ads. Google benefits from a robust competitive landscape among its advertisers, with many healthy companies competing for limited ad slots.”
Ballard said Amazon’s PLAs immediately siphon some sales from other retailers, many of whom have already been facing challenges in competing with it.
“With PLAs generating nearly half the traffic that retailers produce from Google search ads, a major incursion by Amazon into this space could have a material impact on other retailers and weaken their ability to compete in Google’s ad auctions,” said Ballard.
MCM Musings: While we can’t say for sure what will happen in the long run, Amazon’s PLAs could hurt Google and other retailers. It appears to be a win-win for now, but should Amazon decide to go forward beyond the test phase, people will see Google less and less as their primary product search vehicle. Once customers see Amazon listings in the PLAs, it will become that much harder for other retailers to compete with it.