Amazon.com Inc. has a massive marketing budget that grew 40.6% in the first quarter. But those deep pockets haven’t prevented the retail giant from abruptly stopping at least one of its marketing initiatives: Google’s Product Listing Ads, the visual-oriented ads that Amazon only began testing in December 2016.
Amazon consistently bid on PLAs in 2017 in the home goods product category, and it also used PLAs to drive consumers to click and buy in categories such as furniture, office supplies and novelty gifts. But on April 28, it stopped bidding on all of those ads, says Andy Taylor, associate director of research at digital marketing firm Merkle, who first reported the move in a blog post that posted on Monday. Kantar Media, which also tracks paid search, also saw Amazon halt its PLA bidding on various home goods categories on April 27 and 28.
“Amazon has always had an odd relationship with PLAs,” he says. “For years it was reluctant to use them, then it began to slowly test them before ramping up its share in the middle of last year. It seemed like Amazon was finally embracing Google Shopping by the end of 2017, which we expected would continue this year. But it appears that Amazon has dramatically changed course.”
In examining advertisers that regularly compete with Amazon in its key PLA product categories, Taylor found that Amazon abruptly vanished from its reports across all device types on April 28 and hasn’t reappeared since.
The finding dovetails with the Merkle Digital Marketing Report, which reported that Google’s Shopping presence began to wane at the end of the first quarter. The e-commerce giant devoted an average of $37.6 million per month to paid search ads of all types in 2017, according to estimates from search marketing firm Kantar Media (formerly AdGooroo).
Although Amazon had begun to garner a significant PLA click share when compared with home goods keywords bid on by Merkle clients that exclusively sell home goods, Merkle’s analysis suggests the retail giant had minimal impact on the broader PLA market, he says. Looking at cost per click, for instance, Merkle found little difference between the categories where Amazon bid on keywords and those in which it did not, which suggests Amazon wasn’t aggressively bidding and driving up prices in those categories.
While it isn’t clear why Amazon changed course, Taylor notes the move came about a month after Google launched Google Shopping Actions, which enables retailers to list their products in sponsored listings adjacent to regular search results, in its Google Express shopping service and in its Google Assistant app that’s available within smart speakers such as Google Home and on smartphones. In exchange for the listings, merchants using the program pay Google a percentage of each purchase, which is a shift from its existing cost-per-click and cost-per-thousand impressions advertising models.
“Looking at the same set of advertisers that saw Amazon regularly popping up as a competitor, all of them are seeing Google Express as a competitor in Auction Insights to some extent, though its impression share is fairly limited against most,” Taylor writes in the blog post, before noting that Amazon’s impression share began to fall prior to that announcement, “so there were certainly other considerations at play.”
Amazon, No. 1 in the Internet Retailer 2018 Top 1000, could not be reached for comment.Favorite