How Amazon Is Becoming The Third Force In Ad
As Amazon wields a growing power as a search engine, it is also becoming a more compelling advertising platform and, as a result, is posing the first real challenge to Google and Facebook, which have long commanded digital advertising budgets virtually unopposed. Of the two, Google initially stands to lose more, but as Amazon’s ad offerings expand, Facebook could also bleed ad dollars.
At the same time, it is unlikely Amazon will overthrow this so-called ‘duopoly’ until it starts to do more with online media and command a larger chunk of consumers’ time. So, instead, we’re likely to end up with three digital advertising powerhouses instead of two.
Research shows many consumers turn to Amazon when looking for information about products. Figures vary from 31% to 55% when it comes to first-time research – and a study from marketing technology company Kenshoo found 72% of people visit Amazon at some point before making a purchase when they want to research products online.
According to Collin Colburn, analyst on the B2C marketing team at market research firm Forrester, use of Amazon as a search engine will continue to grow for two reasons:
Amazon is built like a product-specific search engine – consumers can search for anything product-related and get relevant results better and quicker than they can with Google.
Second, Colburn noted Amazon is unique in that its product listing pages have virtually everything a shopper could want to know – including price, description, pictures and reviews – which gives customers a one-stop shop for research even if they aren’t actually going to buy from Amazon.
Nathan Grimm, director of marketing at Seattle-based agency Indigitous, agreed Amazon’s share of search will grow.
“They have built a sizeable lead in selection and service over their competitors and continue to grow their market power,” he said. “As retail stores continue to struggle and close down, even more business will shift to Amazon. Their share of search is very much a function of them being a preferred channel for purchasing products. Until someone else upsets their model, it will grow.”
In addition, Kevin Mannion, chief strategy officer at business intelligence firm Advertiser Perceptions, said he believes Amazon has growing influence on how advertisers view search.
“Our data shows that advertisers are increasingly ready to shift down their spend in traditional digital search and [are] more likely to see alternate search opportunities. Amazon is one. And perhaps the most important,” he said. “Searching within the Amazon environment is essential to the data story that Amazon can share with marketers and agencies. And as the shopper leaves [its] walled garden, Amazon is able to track and retarget shoppers who have explored a product category and…considered contender brands.”