Advertisers Abandon Google For Amazon

Amazon is getting a leg up over Google when it comes to advertising, with CNBC reporting that some advertisers are moving more than half of their budget earmarked for Google to the eCommerce giant.

Citing executives at multiple media agencies, CNBC reported that Google could face a threat from Amazon in the online advertising space where it generated $95.4 billion in revenue. That, according to CNBC, represents 86 percent of all of Google's revenue. For this year, it is estimated it will control 37 percent of digital advertising budgets. And while it has been able to hold off Amazon, advertisers are starting to shift dollars toward the online retailer. CNBC noted that the brands shifting money toward Amazon are focused on consumer packaged products. Automobiles and travel haven't yet embraced ads on Amazon like product makers. The report noted that advertisers are moving their ad dollars to other Google properties and away from search with a big focus on YouTube. One manager in Google's ad sales organization told CNBC that he is seeing clients come up with different brands to sell on Amazon only rather than shifting search budgets toward the online retailer. "Leadership is definitely concerned but [it's] not a huge threat right now," this person said.

Still, executives at six media agencies told CNBC that Amazon is making a big splash in advertising, with one executive at a large agency saying that some brands call Google search ads "quaint" and have been requesting their ads be moved to Amazon because it correlates to sales. Citing Survata, CNBC noted that around 49 percent of product searches start on Amazon. Another executive at a big agency told CNBC that some of the clients that sell products are moving about 50 percent to 60 percent of the money going to ads on Google to Amazon, which amounts to hundreds of millions of dollars annually. Yet another executive at a different firm said some brands are moving 50 percent of their Google search ad spend to Amazon, also amounting to hundreds of millions of dollars a year. The executives noted that the brands requesting the changes are all consumer products companies.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.