- October 26, 2019
- Digital Marketing
Should PPC Professionals Care About Amazon?
Everyone will have heard of that small online bookstore that grew up to become a retailing behemoth and the poster boy for online retail destroying brick-and-mortar. We are, of course, talking about Amazon. Where once they sold books, they now sell almost every product you can imagine.
And, although for PPC professionals, on a surface level, Amazon is an out-of-channel topic; the reality is that this online retail giant is firmly in Google’s backyard. If you could ask Google C-suite, they would tell you that Google’s biggest competitor isn’t Facebook or Bing. Google’s fight for the throne is with Amazon.
Challenging Google for the Crown
Google earns its money via advertisers who, as most PPC professionals will attest to, are interested in getting sales against the best cost per acquisition. In most cases, this means targeting consumers that are at the point of purchasing a product or service. In other words, PPC professionals very much target the bottom of the marketing funnel. This is where Google sees its users (and therefore, the value they offer to advertisers) leaving Google and moving towards product-focused platforms such as Amazon. Whereas Google is still very much relevant when consumers are in the research and evaluating phase before they make a purchase.
The final stage with that all-important conversion is happening on platforms such as Amazon.
Because of this, it’s no surprise that Google is actively trying to make moves to stay relevant for this final part of the consumer journey, and therefore staying attractive for advertisers. In the last few years, Google has doubled down on its Shopping platform to make sure they can offer a significant counterweight to Amazon.
A Brief History of Google Shopping
It’s fascinating to know that Google Shopping once started as Froogle in 2002, a stand-alone website that offered users the ability to search for the best deal, similar to a comparative shopping engine. Froogle utilized Google’s web crawling capability and had a form of monetization based on text-targeted ads. The first significant change came in 2007 when Froogle rebranded to Google Product Search. The results would appear next to Google’s web search result pages.
In 2012 another rebrand happened, and it became known as we know it today: Google Shopping. Alongside this change, the model completely changed to “pay-to-play,” and it became a purely advertiser-driven platform.
While Google was evolving their product-focused search to a fully-fledged commercial model, Amazon went from Jeff Bezos incorporating his company in 1994, to an IPO in 1997. Amazon then began to see positive cash flow for the first time in 2001, and accelerating growth from 2006 onwards, overtaking Walmart in marketing capitalization in 2015.
Just for reference, in the time between Froogle coming in existence (2002) and was rebranded to Google Shopping (2012), Amazon’s stock price multiplied 16-17 fold. One could take the view that Google completely dropped the ball here and let Amazon not only catch up and get alongside but also complete overtake them.
Google Express & Shopping Actions
Google is playing catch-up and has put considerable effort into Google Shopping in the last few years. The Google Express platform is one of the notable recent endeavors and a direct attack on Amazon. Google Express allows traditional retailers and Google to team-up. The retailers provide the products and Google the platform to provide a seamless shopping experience, offering a universal basket across stores and (voice) integrations with Google Assistant.
Based on the Express platform, Google is now looking to roll out globally (currently US & FR only) its Shopping Actions functionality to its main search engine result page. This will go some way to offer consumers a serious alternative for Amazon.
Also, to state how significant this is for Google’s future, you only have to look at Google’s own data. In the US, spending on Google Shopping Ads grew by 38% in Q2 2019, and the decline of text ads stabilized at 12%. In short, Google Shopping income is growing, and text-ads income is shrinking.
The PPC Perspective on Amazon
All of this tells the PPC professional a few things, mainly where to expect Google’s focus (and investment) for the near future. If the trend if anything to go by, then Shopping will become an even bigger piece of the pie while Google is challenging Amazon’s dominance on product searches. For those with clients not selling their products on Amazon, this is good news. The expectation is that if Google can raise the bar on consumers’ expectations, the necessity to become a seller on Amazon will no longer be a foregone conclusion. What we do as PPC professionals will still be reasonably similar to what we do now.
For those with clients who are considering or already have made the move to incorporate Amazon sales in their portfolio, these PPC professionals must embrace Amazon’s Marketing Services (AMS) platform at the very least.
The line between the marketing and sales budgets is blurring more each day. Investment on Google can quickly turn into an investment on Amazon. Losing a client just because you lack expertise on AMS would be something most of us would want to avoid.
The smart money is on making sure your agency has expertise on both fronts. Be ready to go along with the newest that Google Shopping has to offer (including voice) and start building reliable processes & practices around your AMS offering.
You should consider going one step further and look into helping clients onto marketplaces platforms as the skill-set (feed management, marketing automation, bid management) most likely already exists within your organization, and it’s pretty clear the retailing platforms are not going away any time soon.