By Jamie Barrie A mazon’s ad budgets are seeing phenomenal year- over-year increases as many brands move online marketing dollars from Google to Amazon making it the third-largest U.S. digital advertising platform behind Google and Facebook. Ad agencies are saying that the advertisingmove to Amazon directly correlates to sales for advertisers as approximate- ly 49 percent of product searches begin on Amazon and more importantly, that over 90 percent of these searches for products that start on Amazon end with the online customer making a purchase. For smaller brands, there’s no real advantage between selling direct to the consumer on Google versus selling through Amazon. However, Amazon has a seamless shopping experience for the customer. When using Google search, the purchasers may be required to set up an account and input their credit card information with a separate website. Not all categories of brands are shifting money to Amazon as most of the movement seems to be in the consum- er-packaged goods sectors. We also need to remember that many items are not sold on Amazon, well at least not yet. The large advertising categories such as auto, travel
and some entertainment, including ticketed events such as movies or sporting events, still do not conduct direct sales on the platform. Those companies don’t have any reason to advertise on Amazon, while Google search still drives a lot of direct sales. However we look at it, Google is still by far the most dominant digital advertising platform in the U.S., generat- ing $95.4 billion USD in ad revenues last year and projected to take in an estimated 37 percent of all digital ad budget spending for 2018. Amazon appears to be emerging as the number one con- tender to Google’s advertising business since Facebook conquered mobile advertising back in 2012. However, even with Amazon’s massive growth, Google is still maintaining a strong hold on digital advertising budgets overall. Last quarter, Google reported its ad business was up 23.8 percent year over year, that was up from Q2 2017, when ad revenues went up 18.4 percent from the previous year. The same trend happened in the first quarter of 2018, when ad revenues rose 24.4 percent from the previous year, compared with 18.8 percent year over year growth in Q1 2017.
Although Amazon and Facebook are top contenders, it looks like Google is not going to be giving up the title any time soon.
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SPOTLIGHT ON BUSINESS MAGAZINE • OCTOBER 2018
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