Many times sensational headlines are published defining the next “Google Killer,” but for advertising, could Amazon be it?
By the end of the year Amazon plans to release a new ad platform called Amazon Sponsored Links. It is being designed as a direct competitor to Google AdWords.
How it will work: Amazon is building its own in-house platform to serve ads in search results and on websites, similar to AdWords. The targeting will be based on information about its own customers it has collected.
According to the Wall Street Journal, the new ad platform is currently being tested with select partners and has placed ads on a small number of websites.
What does this mean for pay-per-click (PPC) advertising? A new, powerful ad platform will impact competitive ad platforms and the way advertisers do business. Some of the possible implications for the current PPC landscape are:
- Websites in display networks may show less Google ads for Amazon-sponsored links. The Amazon website itself will show less Google ads. Overall this may lead to poorer-quality placements for advertisers. Advertisers with any success on Amazon through Google may be better off going directly to Amazon.
- Platform options increasing ad competition could drive cost-per-clicks (CPCs) down for some placements or advertisers and possibly increase services and support from Google, who will become more aware of customer retention.
- Bing Ads will not likely be impacted as much, as the larger budgets are usually allocated to AdWords. This will be the most likely place to take PPC budget from to allocate to Amazon.
- The entry of a new Amazon platform into the market may result in slightly higher fees from PPC managers, who will need to dedicate extra hours and resources to add a new platform to the PPC mix. In-house PPC managers will need training and additional hours in management for this.
- Amazon will offer greater consumer insights. While Google can see what websites are visited and even segment users into groups whose searching behaviors indicates they are in the market to buy, this is nowhere near the consumer insight that Amazon possesses on buying behavior. For advertisers with a consumer audience, this could be a gold mine.
The growth of online advertising and PPC will not be enough to allow for the revenues that Amazon would take – the revenue will be coming from some other PPC channel or marketing tactic in the plan. If a significant amount does come from AdWords’ budgets, and Google relies on AdWords as its primary revenue-generating product, then could this be the “Google Killer” we’ve been predicting? Tell us in the comments or tweet @lisarockssem or @clickz if you think this is possible.
Every year, Google's well-oiled digital ad machine generates tens of billions of dollars in revenue, making the search giant the biggest single recipient of digital ad spend.
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