Is Google trembling?: Amazon is going all out and wants to steal the crown of online advertising

[tasnimsanika69]

More and more consumers are turning to Amazon as their first choice when searching for products on the Internet , which inevitably hurts Google and threatens its (once absolutely impregnable) reign in the online advertising market.

When Amazon presented its results for the fourth quarter of 2022 a few months ago, the data relating to advertising revenue , which jumped by 19%, attracted a lot of attention.

Amazon's success in the online advertising market is in contrast to the (rather meager) growth of its rivals . Between 2019 and 2022, Meta's market share in the online advertising world stagnated overseas (+0.6%), while Google's market share even collapsed by 3.9%.

In 2022 alone, the company led by Andy Jassy almost doubled its share (13.3%) of the online advertising pie in the United States.

If Amazon's advertising revenue continues to grow as meteorically as it has in recent years, the e-commerce giant would be able to virtually tie Google, with the two companies each gobbling up nearly 20% of the digital advertising market across the pond . If the tie does come to fruition, Google's market share would shrink by ten percentage points. At its peak, the Mountain View company held almost a third of the online advertising market.

A few years ago, Google was invariably the first stop on the consumer's "customer journey" and SEO and SEM on the famous search engine seemed absolutely essential for advertisers.

The current landscape is, however, radically different. According to the Consumer Trends Report 2022, 61% of American consumers start their product search directly on Amazon . And only half of them use a search engine as their first choice. YouTube (20%) and Facebook (19%) are far behind.

Amazon knows everything about its customers and that is an important competitive advantage over its rivals
Amazon also has the (not insignificant) advantage of knowing what consumers buy and where they live, what payment method they use and even whether they have children and pets. On Amazon, consumers are also at the bottom of the sales funnel, whereas when they start a product search on Google, they are still leveraged at the top of the funnel.

This makes Amazon a particularly attractive platform for advertisers. Is there a better platform for advertising than the one that has the reputation of being the largest online retailer in the world?

Amazon is a major rival to Google (from which it could steal a good part of its market share) because almost taiyuan number screening a quarter of the searches carried out on the Internet giant can be carried out directly on the e-commerce company.

Second only to news and video games, the most frequent searches on Google are directly related to the Internet and telecommunications (12.6%), computers and consumer electronics (7%), sports (3.5%), home and garden (3.1%), health (2.5%) and clothing (2.3%).

Search volume plays a major role in Google's advertising revenue , and if that volume suffers a collapse (because it is devoured by Amazon), the advertising business of the company led by Sundar Pichai is also doomed to collapse like a house of cards.

If Google search volume were to fall by, say, 19%, we would expect a similar drop in the US multinational's advertising business. And its decline would benefit Amazon, which would channel the investment that advertisers once poured into Google, knowing that the "customer journey" now begins on the former platform and not the latter.

It is true that in some categories of products and services (automotive or tourism, for example) Amazon cannot replace Google (at least for now). However, it is by no means unthinkable that Amazon, a company whose tentacles extend to areas such as satellites or the cloud business, might one day venture into the world of automobiles and tourism.

Amazon therefore has many factors in its favour to approach Google and compete with it head-to-head in the online advertising market with the invaluable help of the booming "retail media" . The stagnation of Meta and Google in this market paints an extraordinarily rosy picture for Google, which has an ace up its sleeve that its rivals lack: "retail media".