Andreas Reiffen, Crealytics CEO
Google and Facebook represent a sort of digital duopoly of digital advertising. Yet Amazon’s expansion into the advertising space represents an attractive dark horse candidate for retailers’ media spend. What’s intriguing about this battle isn’t just the fight over media dollars. It’s about the looming showdown between Amazon and Google to own and monetize purchase intent—the definitive signals showing who wants to buy what, and when.
The intensifying competition over purchase intent has the two largest tech companies converging in ways we’ve not seen before. Google is expanding beyond search into Amazon’s territory of promoted product listings. And Amazon, for its part, is becoming the preferred search engine for a range of products, bringing it into Google’s territory.
Why is this happening now? Today’s perpetually connected consumers can research options within minutes and make decisions—and purchases—within moments. The marketing funnel, as we’ve known it, is collapsing. And with it, so too is the marketer’s ability to understand and influence what customers are seeking, comparing and thinking before clicking “buy.”
Measured in advertising dollars, Google’s Pay-Per-Click search advertising model is still the unmitigated leader in monetizing purchase intent. It’s not even that close: Google’s market share in overall search is somewhere near 85% in the US, and 91% in Europe—enough to warrant regulatory oversight for antitrust violations. No other ad platform comes close to being as equipped to capture all the consumer signals that allow it to know where, when and how shoppers are searching for a product and target them at that moment, except for one.
Enter Amazon. Amazon’s advertising business is still nascent, but the company is already seasoned in the art of harnessing and monetizing purchase intent data. So far, Amazon has primarily leveraged this data to personalize offers and target promotions. That’s beginning to change, as Amazon rolls out Amazon Sponsored Products—expanding the ways brands can pay to personalize the shopping experience, target product placements, and boost the visibility of their offers.
Because it operates much further down the purchase funnel, where shoppers are making inquiries at the end of their buyer journeys, Amazon has access to more first-party customer purchase data than Google does. The signal, in other words, is stronger than Google’s. But Google has more signals; Amazon searches are commerce-based, so it’s not like someone in the market for, say, auto insurance is going to hit up Amazon the way they would research it on Google. But as “the everything store” expands into more and more areas, the breadth of Amazon’s purchase intent data grows, too.
Already, the majority of new product searches are initiated on Amazon. That means it has become the de facto search engine for a range of products, putting Amazon squarely in Google’s territory.
So what’s the play for Google? It appears they already have it in motion. Its Product Listing Ads (PLA) have been on a meteoric rise since their inception in 2012. This ad format, which delivers an image of a product with its price when a user searches a product, now puts Google in the discovery phase of the buyer journey. In other words, it allows a Google product search to act like an Amazon search.
Google is more and more becoming the retail platform, whereas Amazon more and more is becoming an advertising company.
Crealytics, with offices in Germany and the United States, provides technology designed to help retail marketers optimize product advertising and paid search.
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