How Amazon Became The #3 Paid Search Advertising Platform Overnight And What This Means For Facebook, Google And The Rest Of Us

Google and Facebook have long enjoyed a duopoly in the paid search market. They’ve sat atop the #1 and #2 spots with little to threaten their prestigious positioning. Then, like a gunslinger blowing into a dusty ranch town, a new rival in the market appeared and almost immediately began to build a strong reputation for itself.

Except, unlike the iconic, unnamed anti-heroes of classic westerns, this new face in the paid search market has one of the most recognizable names of all: Amazon.

It’s impossible to miss Amazon’s dominance as a colossal ecommerce marketplace. Over the last few years, they’ve started to extend themselves into new segments and technologies. For example, Amazon Web Services, their versatile cloud computing platform, has become a successful addition to the company’s offerings.

Now, it would seem that Amazon’s eyes are set firmly on improving their search advertising services.

Amazon Advertising’s Impact By The Numbers

The results of this renewed focus into search advertising are already being felt by Google and Facebook. As Amazon slugged its way to that number three spot, behind this dynamic Facebook/Google duo, they weren’t just eating up ad spend from lower-tier platforms, like Microsoft and Oath, they were also attracting new digital ad spend away from these two titans.

In 2017, Facebook and Google controlled 73% of new ad spend dollars. Their 2018 forecast paints a less dominant picture, at only 48%. When you consider that Amazon Advertising has really only existed since Q3 of 2018, this decline is extremely worrisome for these top performers.

Not only does it showcase the truly meteoric rise of the Amazon Advertising service, but it also suggests that 2019 may be a real “red alert” year for Google and Facebook.

For Google, the future is potentially even darker. In previous posts, I’ve referred to the 2019 Amazon Advertising Forecast Report. This report surveyed digital marketers and advertisers, with regards to Amazon Advertising; 80% of individuals surveyed had concrete plans to increase spend with Amazon’s paid ad service in 2019. Almost a third of that majority suggested that they were shifting spend away from search (Google) to make this new change possible.

This means that Google may feel the hurt of Amazon Advertising in both their ad service and their search engine.

Why Now?

Amazon Advertising isn’t exactly new. The company has always offered some search advertising and marketing tools for sellers and businesses to take advantage of. The issue was that these tools lacked the cohesion and succinctness that platforms like Google or Facebook offered.

Amazon Media Group, Amazon Marketing Services and Amazon Advertising Platform all provided breadcrumbs to an entire ad businesses. But, this division created a disjointed experience that was hard for users to navigate.

Businesses looking to take advantage of these ad services had to deal with each of the three separate departments within Amazon. The learning curve was steep and troubleshooting was a nightmare. It often took more time for a user to understand if their issue pertained to one service or the next than it did to actually implement the solution.

A big contributing factor to Amazon’s rise in the paid search market space is a vastly simpler and intuitive platform. They folded these services into a single platform. This has made the ad experience through Amazon much more unified and painless, which makes it more accessible than before.

Another contributing factor to the seemingly overnight success of Amazon’s redefined paid search ad platform is the company’s recent nudge into the grocery business.

As the platform adds more and more food products to their massive ecommerce offerings, mega companies, like Procter & Gamble Co., Unilever and Coca-Cola Company, are looking at Amazon and its advertisements as a possible marketing channel to maintain brand awareness.

What Are The Advantages Of Amazon Over Facebook And Google?

Amazon Advertising isn’t attracting ad spend dollars, causing articles like this one to be written and making all sorts of other commotion in the marketing and advertising worlds simply because it’s a new ad platform, but because it’s Amazon’s ad platform.

As an SEO professional, I admit that I look up from whatever it is I’m doing every time Google so much as sneezes. That’s because Google is search. Amazon, on the other hand, is online shopping. Approximately 50% of online sales happen through Amazon. The site even sees more product-related searches than Google, especially in later stages of the purchasing journey.

In the paid advertising space, this gives them a unique advantage. Amazon is able to use these data gained from these searches and purchases to gain intimate knowledge of consumer behaviors.

• What products did they buy?
• When was the purchase made?
• How many steps did it take to reach that final decision?
• What other products did they look at?
• Were any of these products also purchased?

These are questions that Amazon, not Google or Facebook, has the data to accurately and continuously answer. However, they are incredibly important questions that advertisers need to use in order to make better ad campaigns with more accurate targeting.

After all, we’ve all been victim to poor ad targeting, mostly as a result of Google or Facebook having an incomplete picture. They know we’ve searched for a product, perhaps more than once, but, they often don’t have the puzzle pieces that singla when we’ve actually made the purchase, which means we’re still the target of ads for things we own.

The Disadvantages Of Amazon Advertising

While Amazon may suddenly seem like the ideal advertising platform, and its quick rise to relevance in this space would certainly help support that claim, there’s still some areas of concern that Amazon and its advertisers will have to think about in the coming months.

Rebranding Or New Platform?

As we discussed, Amazon is not a new player in the paid advertising market. Amazon Advertising is essentially a compilation of previously-existing advertising and marketing tools. The initial success is a promising indicator that they’ve made a truly intuitive and advertiser-, marketer-friendly platform. But, we’re still only in the first few months.

Will those past concerns over bad support and user service become an issue for Amazon Advertising as well? In other words, is this just a clever rebranding of their past tools or a truly new and innovative advertising and marketing platform?

Pay To Play

In a Bloomberg discussion regarding Amazon’s increase in ad market share coming at the cost of Google and Facebook, author Spencer Soper writes, “Amazon’s shopping marketplace has increasingly become a pay-to-play environment, with the best placement going to paid advertisers as opposed to those offering the lowest prices.”

Paying to play is the case for any advertising platform. But, the Amazon environment suggests that companies with expansive wallets will dominate the service. When you think about how closely tied Amazon ads are to brand recognition and that crucial final purchase, it’s not unimaginable to see large corporations using Amazon as a marketing channel and out-spending the average ecommerce business.

What Does This Mean For Google And Facebook?

Amazon Advertising is certain trouble for the established, duopoly of search advertising platforms. However, that trouble won’t be nearly as impactful as some may predict. The reason being is that these three platforms are very distinct.

Users have different intents and behaviors when searching on Google, compared to Amazon or Facebook. From an advertising standpoint, running a successful ad campaign on a social media channel, like Facebook, is a different animal from achieving the same success with Amazon Advertising.

Amazon Advertising fills a void where Google and Facebook couldn’t quite deliver, which is in those final stages connected to the actual purchase. They have more sophisticated data available to help advertisers deeply understand their customers’ buying behaviors. This will eliminate some of the annoyance that both advertisers and consumers face with search ads, in terms of irrelevant targeting and wasted spend.

In a way, Amazon’s climb to that third spot in paid search isn’t a matter of them “stealing” market share from the other top contenders, but rather them claiming territory that was rightfully theirs to begin with. Remember, Amazon is online shopping.

Conclusions

While Google is already running to the frontlines with Shopping Actions, a platform designed to encourage users to purchase within Google, it’s hard to imagine their efforts matching Amazon, who has been busy in 2019 unveiling new, advertising-driven efforts, like running video ad spots in their mobile shopping app.

Once the dust settles, here’s what I predict we’ll see:

• Amazon will eventually push past Facebook into the second spot in the paid search market, but they’ll face some issues with declining user experience in the process.
• After Google Shopping Actions fails to make any noteworthy progress, Google will shift its advertising focus towards redefining what its position and role in the ad search industry are
• Facebook will probably just be happy if it can keep its name out of the headlines

It’s going to be a busy year, if not longer, in the paid advertising world. There’s going to be a lot of shifts that will leave us scrambling to catch up. For awhile, it will probably appear as if Amazon is destined for absolute victory in the paid search market.

However, their rise is going to plateau and we will eventually have three advertising platforms that businesses will need to learn how to effectively use in tandem to create campaigns that attract customers in all stages of the buying process, from problem recognition to final purchase.