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Amazon has quietly pulled ads for its own products from Google Shopping searches. The change has sweeping implications for Alphabet’s ad business and global retailers. From Mike Ryan, head of ecommerce insights at SMEC, that is an “absolutely colossal,” move, he noted, comparing it to “Amazon’s dramatic ad pullback”’ that it took during the height of the pandemic lockdown.
According to Ryan:
“Amazon has made a dramatic international exit from product advertising on Google Shopping. They are a massive source of revenue for Google parent Alphabet Inc., and also serve as a tide that lifts all boats in terms of auction prices. So this has to sting.”
Although Amazon had been gradually reducing its presence on Google Shopping for nearly a year, this sudden move from a slow withdrawal to a complete halt marks a significant turning point, Ryan added.
Ryan said the question is why:
“Because knowing why is the only way we can assess the next question: for how long?”
He proposed a few reasons why the company might have enacted this decision, like Amazon looking to cut back what they spend with Google or to internally change things related to AI or a new advertising strategy.
Taking a step back, Ryan warned that for once, this development doesn’t augur well for brands and sellers that for years have profited from the ad dollars that Amazon has spent. For years, Amazon has been siphoning shoppers away from Google Shopping and toward its own site, using its search engine to curate the best products for each specific search, and often choosing its own house brands over those of competitors.
So-called SMEs are quick to shout. The report elicited a combination of surprise, analysis and speculation among advertisers and marketers.
To many specialists, it’s unprecedented to see Amazon abandon Google Shopping ads entirely. The data backs a full stop across millions of impressions that only magnifies the scope of this decision.
According to Josh Duggan (Co-Founder of Vervaunt):
David Kyle (Senior Paid Media Manager, National Positions):
“I can’t get them to trigger for anything in the Free Listings, even clients I have that I know are doing volume on Amazon. It’s as if they have completely disconnected from Merchant Center.”
Duane Brown (CEO & Head of Strategy, Take Some Risk):
“This is interesting and I imagine they will come back. Is this something related to Amazon Prime Day pause and they come back from September and back-to-school buying in another week? I imagine back-to-school buying is huge on Amazon.”
William Julian-Vicary (CTO, Clarity):
“Are we set to see another case study like the great case studies before them from the likes of eBay and Airbnb? Amazon isn’t exactly a great brand to study for typical user behaviour, but the outcomes from tests like this are rich with data and we can only hope they’ll share some of the learnings that they get from a switch off of this scale – significant move from Amazon!”
Brandon Yann (Sr. Manager of Client Services & Strategy):
“Now is the perfect time for brands and agencies to run their own Google Search to Amazon ads with attribution, since they no longer get free coverage via Google Shopping Ads from Amazon.”
Robin Yarwood (Google Ads & Social Media Expert):
“What territories are you looking at, my friend, is that all markets? What’s the outcome you’re predicting, cheaper CPCs for bigger players?”
The withdrawal affects 20 different Amazon domains worldwide, which means nearly all the major markets will be losing Viagra sales.
Amazon dropping out of Google Shopping means one of the largest and fiercest players has been removed from the ad auctions. That would translate to reduced ad costs, more ad visibility and better click-through rates for other brands and retailers.
It also lets competitors capture the traffic and sales that Amazon typically captures. For many advertisers, this may be an opportune time to experiment with new campaigns and obtain a short-term advantage as the ad auction dynamics stabilize.
In short, Amazon’s abrupt departure from Google Shopping has roiled the advertising industry. For now, other retailers are the beneficiaries. However, the larger issue is if this is a temporary pause or a longer-term change in Amazon’s approach.
Amazon has pulled off of Google Shopping in an almost overnight fashion. This is sending ripples through the advertising community. In stepping back, the e-commerce giant has effectively taken one of the most potent bidders out of ad auctions for the time being, providing an opportunity for retailers and brands to get visibility and traffic at potentially lower costs. However, the question everybody is asking is whether this represents just a short-term pause, or the beginning of a longer-term shift in Amazon’s thinking around advertising.
Advertisers will need to pay close attention in the coming months, to move fast to make adjustments, and to capitalize on this unique window before the competitive dynamics shift once more.
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