A tug of war is emerging between two online giants, Amazon and Google. The bad news is that it will make things more complicated for e-commerce businesses. The good news is that we believe that it will spawn new realms of opportunity for online business owners.
It began with Google’s launch of Google Shopping (formerly Product Listing Ads), an online advertising platform for product retailers who want to provide more targeted advertising. This platform ties to your Google Adwords account but unlike traditional text ads, display network ads, or YouTube ads, these advertisements are product centric.
Traditionally, brand advertisers have not gravitated towards search advertising due to its limitations in providing them results. Primarily, we see this push from Google’s to capture more advertising from brand products. A recent article on Google Advertising shows that only a handful of brand retailers made the top 25 spenders.
We see this as a challenge to Amazon’s dominance as the primary e-commerce platform. By launching and actively promoting Google Shopping, it allows advertisers to tap into its powerful search network while still providing a level of product specific visibility that it previously lacked.
Last month Amazon announced that they plan to shift their attention to the online advertising world in a program initially called Amazon Sponsored Links.
Currently Amazon offers a Sponsored Products advertising platform, which was the first acknowledgement of the truth of Amazon – that it is an e-commerce search engine.
This new Amazon Sponsored Links product offering is currently in the works and is expected to be available to partners by the end of the year. Unfortunately there isn’t much in the way of news from Amazon regarding the new platform.
Here’s what we do know. Amazon currently spends $157.7 million last year on search advertising with Google. We also know that Amazon owns a number of advertising properties like Quidsi.com (owns Diapers.com, Beautybar.com and other product sites) as well as IMDB.com.
It is likely that this will be followed by moves by Amazon to either directly acquire other advertising real estate platforms or challenge Google’s dominance over existing deals by offering more favorable rates to site owners.
What does this mean for Inspire clients?
It’s an exciting time for anyone in the e-commerce space as Google and Amazon begin to challenge each other’s traditional roles.
For product based e-commerce clients, if we’re already managing your Adwords, we already have you set-up for Google Shopping. If you are self-managing your online advertising, we strongly recommend adding Google Shopping. It’s designed to be a part of your Adwords platform.
For all other clients managing display advertising through Google, we will have to wait and see how the new Amazon development plays out. Inspire will pay close attention to official announcements from Amazon to identify when it may make sense to diversify your advertising portfolio into their display network space.