Amazon's Disappearance From Google Shopping: What Happens Next?

Amazon and Google have a complex relationship, to say the least. From an advertising perspective, however, there was some synergy between these two fierce rivals… or so I thought.

amazon-s-disappearance-from-google-what-happens-nextAs we all know by now, Amazon has called it a day on Google Shopping placements across its biggest markets.

Amazon's decision to stop running shopping ads in Google Shopping placements is a significant strategic shift with wide-ranging effects on both Amazon and its sellers and vendors on its platform.

It's well documented as to what the impacts would be for Google, but what will be the impact on the Amazon ecosystem?

Impact On Amazon

Let's get the most obvious one out of the way: cost savings.

While the figures aren't readily available, Amazon is a massive spender on Google Shopping ads, so they'll be making huge savings on advertising expenditure.

This move also reinforces what is perceived to be Amazon's long-term strategy of driving traffic directly to its own platform and strengthening its internal advertising ecosystem (via Amazon Ads). They want shoppers to start and end their purchasing journey on Amazon, where they control the entire experience and data.

This increased control over traffic will streamline their customer acquisition strategies and user experience.

Lastly, Amazon's withdrawal signals its confidence in alternative traffic sources, including direct search behaviour, its extensive customer base, and its expanding AI-powered recommendation systems. These alternatives may not offer the volume of traffic that Google would, but they are likely more efficient mediums of traffic, which could improve Amazon's margins.

Impacts on Sellers & Vendors

The effects of this change on brands are likely to have more negative connotations than on Amazon itself.

For example, brands could easily face reduced new-to-brand traffic and sales in the long run. As previously mentioned, Amazon is keen to streamline its traffic mediums; however, for brands, having one less option for traffic could increase costs for new customer acquisition and also decrease the percentage of new-to-brand (NTB) sales.

The other implied difficulty here is also reduced "free" traffic from Google Shopping. Many Amazon sellers indirectly benefited from Amazon's large-scale Google Shopping ad spend. Amazon's ads would often lead users to product pages on Amazon, where a seller's product might be featured or discovered. This "piggyback" traffic will diminish.

To recoup some of this lost traffic, sellers may increase their Amazon Ads spend. While this approach could easily mitigate this issue, if multiple brands increase their spend, this could inflate their Amazon Ads costs. Nevertheless, this is a risk many brands will have to take.

The impacts above do imply that brands are reliant on Google Shopping for Amazon traffic. While this was true for many advertisers, many brands aren't reliant on Google Shopping for traffic and already have a strong Amazon presence. These brands will not require a big shift in strategy and may barely even notice the impact.

In essence, Amazon's withdrawal from Google Shopping ads is a strategic move to optimize its advertising spend and further solidify its direct relationship with customers. While it presents challenges for some Amazon brands, it also presents brands with an opportunity to fortify their Amazon Ads strategy.

Amazon Ads and Paid Media form a dynamic ecosystem that many brands struggle to manage effectively. At Ikay Media, we’re here to ensure your Digital Ads strategy drives results for your business. We’re currently providing brands with free audits, designed to pinpoint challenges and offer actionable solutions.

If you’re keen to learn more about how Ikay Media can drive your brand forward, please DM me on LinkedIN or email on adam@ikaymedia.com