Updated January 7, 2023Reading Time: 2 minutes
Pay Per Click
Online Pay Per Click advertising is big business. Three years ago the combined ad spend on Google AdWords was $72billion dollars. In the last year, Google has invested a lot of time upgrading their advertising platform (now known as Google Ads). Their platform had been in need of a refresh, so it isn’t a big surprise that Google gave their biggest money-spinner some TLC. However, they may have been making updates in anticipation of a new challenger. Amazon.
Player 2 Has Entered the Game
Amazon is the third largest online advertising platform behind Google and Facebook. And as Amazon is one of the few internet companies to have more resources behind them than Google, their challenge may be serious. The growth of Amazon’s advertising is astonishing, with it expanding at 5x the speed of Google Ads. But why is this the case?
Why Are You Browsing?
Amazon is the world’s biggest online eCommerce store. You go there to shop. Google is the world’s largest search engine. You go there to search. It’s a simple as that. User intent is more difficult to gauge on Google than it is on Amazon. It is a safe assumption that if your user clicks on your ad from Amazon, they’re more likely to make a purchase than they would if they clicked on it from Google. Because if they’re on Amazon already, they’re thinking about buying something. So you’re likely to get fewer clicks, but a higher click to conversion ratio. Which is great if you want to sell more of your products. But, probably less appealing if you’re using AdWords for something else, like a brand awareness campaign.
Another reason is perhaps the way content, and advertising, is mixed together on Amazon. It is more difficult than ever to tell the difference between a product sold by Amazon and an Amazon marketplace seller. This may blur the lines slightly when a user is clicking on an ad, as they might not even notice it is an ad. You can argue the ethics of this tactic elsewhere, but it is effective.
A New Champion?
With Amazon reporting $2billion in ad revenue for last year, they’re not ready to dethrone Google just yet, but as Amazon continues to grow and diversify their business they are well placed to become a bigger player in online advertising, especially when Facebook’s user numbers seem to be stagnating.