Amazon vs. Google: Battle Royale

be seen.
Amazon vs. Google: Battle Royale
As an online retailer, you have a front-row seat to watch two of the biggest players in the game — Amazon and Google — slug it out for
e-commerce supremacy.
But the best part? You don’t have to pick a side.
The marketplace giant and the search engine king are growing each year, increasing their product selection and gobbling up more
consumer attention. And more consumer clicks means more market share for smart, multichannel retailers like you. Both channels
increasingly want to keep consumers within their borders from start to finish, using new shopping programs and incentives, and they’re
steadily raising the bar to achieve a more exclusive relationship with shoppers.
But while they build their walls higher, hoping to retain more consumers, some of their tactics are starting to blur. Image-based product
ads. Transactional ads. Paid search programs. Which is which?
The bottom line: The hotter the competition gets between these two titans, the more eyeballs end up on your products. Let’s analyze
the matchup and see where these two channels currently stand — and where they’re starting to blur.
AMAZON: MARKETPLACE GIANT
Amazon is a marketplace powerhouse, plain and simple. It operates websites in 10 countries, has over 2 million sellers and is a
shopping destination for hundreds of millions of customers from across the globe.1 In 2014, Amazon third-party sellers sold a record 2
billion items globally.2
Strength: Amazon Prime
Since the debut of Amazon Prime in 2005, Amazon has cultivated
an extremely loyal customer base of members willing to pay an
annual fee for fast, free shipping. Although Amazon is notoriously
cagey with its company data, it’s been estimated that there are now
over 35 million Prime subscribers.3 More important — and more
worrisome for Google — traffic from Prime subscribers is increasing. Amazon’s traffic from marketplace shoppers is seeing a 53%
increase year over year, but Prime shoppers have amped up their visits by over 300%.4 That’s a lot of consumers treating Amazon as
their primary shopping destination.
1 http://techcrunch.com/2015/01/05/amazon-third-party-sellers-2014/
2 http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=2002794
3 http://www.businessinsider.com/macquarie-amazon-prime-estimates-2015-4
4 http://www.businessinsider.com/macquarie-amazon-prime-estimates-2015-4
Secret Weapon: Amazon Sponsored Products
The Sponsored Products program allows Amazon sellers to pay an additional fee
to highlight select products on the Amazon search results page. The advertising
program is similar in appearance to Google’s hugely popular, imaged-based Product
Listing Ads (PLAs). The Sponsored Products ads appear alongside organic search
results and are driven by search keywords chosen by the seller.
Trading Blows
• Amazon recently announced that it’s doing away with its Amazon Product Ads
program (as well as the short-lived Amazon Text Ads), a program that took
interested shoppers off Amazon and onto the retailer’s webstore. Now, there are
no longer any Google-powered search results on the Amazon marketplace, and
Sponsored Products is the last viable Amazon advertising option for sellers. And
it’s the one option that keeps shoppers right where Amazon wants
them: on Amazon.
• In another perceived slight to its competitor, Amazon announced
this year that it will no longer sell media-streaming devices from
Google (or Apple).5 Banning these popular products demonstrates
that Amazon is willing to take a hit to its bottom line if it means more
exclusivity for its own products and devices.
GOOGLE: SEARCH GIANT
The name Google is synonymous with search. Retailers have been clamoring to climb atop the Google results page since Google
emerged as the search leader over a decade ago. Today, the search engine processes roughly 3.5 billion queries per day and accounts
for most of the world’s search traffic.6
Strength: Organic Search, Text Ads
While the ranking of websites and their descriptions (or “snippets”) is more difficult
to control from a retailer’s perspective than paid advertisements, the entire Google
search results page remains an integral part of the e-commerce conversation. The
real focus of the Google results page for retailers, however, is paid advertising. The
search king generates 90% of its revenue from paid ads.7
Google AdWords, the program that powers its text ads, has seen its popularity
wane in recent years. Google has started including three text ads atop most mobile
searches, however, instead of the traditional two text ads, which has increased the
program’s click-through rate.8
5 http://www.bloomberg.com/news/articles/2015-10-01/amazon-will-ban-sale-of-apple-google-video-streaming-devices
6 http://www.internetlivestats.com/google-search-statistics/
7 http://fortune.com/2014/10/15/in-online-search-war-its-google-vs-amazon/
8 http://searchengineland.com/early-impact-google-ads-mobile-serps-228171
Secret Weapon: Product Listing Ads
The most popular way to claim space on the Google results page is through Google
Shopping’s image-based Product Listing Ads (PLAs). Since PLAs emerged on the scene in
2012, they have surged in popularity. In 2014, retailers spent 47% more year over year to
claim these coveted spaces for their products.9
Trading Blows
• In July 2015, Google announced Purchases on Google, a new program that will allow
shoppers to purchase items directly via PLAs from selected retailers when shopping on
their mobile devices. This program will reduce the number of steps it takes consumers to
purchase a product from Google. It will also mirror the ease of marketplace shopping.
• Google launched the same-day delivery service Google Express in 2014, a
program very similar to Amazon Prime Now and Prime Fresh, the same- or
next-day grocery delivery service.
AMAZON VS. GOOGLE: THE WINNER IS…YOU
It’s not yet clear whether Google or Amazon is winning, but that doesn’t mean
you can’t enjoy the spoils in the meantime. If you have a clear multichannel
strategy mapped out, with both marketplaces and digital marketing, then enjoy it. Every piece of the market share that these two gobble
up in the years to come means additional hordes of consumers that see your products and click.
If you’d like to talk about how ChannelAdvisor’s centralized platform and leading e-commerce technology can help you optimize both
your marketplaces and digital marketing strategies, give us a call at 866-264-8594 or email us at info@channeladvisor.com. And for the
latest e-commerce news and updates delivered straight to your inbox, subscribe to our monthly e-newsletter, ECOMmunicator.
9 http://www.forbes.com/sites/roberthof/2015/01/27/google-shopping-ads-score-big-with-retailers/
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