Amazon has been seen testing Product Listing Ads (Google Shopping) in the US. Why are they doing this? Why is this bad news for other retailers? What can you do? Have no fear! We explain everything and as always we will leave you with some actionable insight for you to take away.
Amazon Testing Product Listing Ads
Right at the end of 2016 Mark Ballard at Merkle seems to have discovered the test whilst shopping for Measuring Jugs…
and Underbed Storage…cough
Random search queries, but nevertheless Mark managed to find the Amazon product listing ad live in the wild. Currently, this looks to be US only but this will no doubt hop across the pond imminently if it’s successful for them; and let’s face it, it’s going to be successful.
What does this mean for Amazon and Google?
As you can see from the above hubbub, the industry is in a state of panic and shock at the fact that Amazon have started testing Google Shopping Ads in the US.
Why? Previous to this Amazon would tend to dominate the paid search landscape with their (lets face it, pretty crappy) text ads, sitting pretty comfortably at position 1 or 2 on a fairly consistent basis. So far, Amazon have avoided using Product Listing Ads and have instead opted to only run Text Ads via Google. But Google Shopping now dominates the Search landscape for retailers.
Put simply, if you aren’t running Google Shopping Ads – you are losing.
Amazon will no doubt have felt some of the blow as more and more users utilise the Product Listing Ads on their Mobile to purchase products; the very thing Amazon is winning at with their Mobile App.
Is this an admission by Amazon that Google Shopping is becoming a problem for them as a business?
Are Amazon seeing more market share being stolen by Google Shopping on Mobile? For most retailers, around half of their Google Shopping traffic will be coming through on Mobile. Google Shopping is becoming more and more useful for users by the day, and it’s growth over the past year in particular has been monumental. Perhaps Amazon are feeling the squeeze and needing to push more traffic from Google onto their site.
Are we about to see domination from Amazon in retaliation?
Let’s face it, people are scared about what this may mean for them and their client’s or businesses. Amazon have the potential to totally dominate the results for Google Shopping. Could this be a way for Amazon to get one over Google at their own game? You could argue that Amazon could benefit from this test more than what Google can get in return in terms of Revenue. Perhaps this is a smart move from Amazon.
Are they just testing the water to see what all the fuss is about?
Are Amazon just simply looking to innovate their Paid Search strategy? Have they perhaps ran out of ideas for their Text Ad activity? Perhaps this genuinely is just a test to see how performance differs for Google Shopping over their standard Paid Search activity.
The test so far seems to be on a small scale over a small selection of homeware products. Amazon stocks thousands and thousands of products both themselves as well as through promoting other merchant’s products. Creating and Managing this feed via the Merchant Centre will no doubt require a lot of love and attention. Testing the water will help them to determine whether the effort is worth the reward. I have every confidence that it will be. Gulp.
What does this mean for you?
Keep an eye on your Impression Share
If Amazon start to roll out this testing across more products or other markets (or worse, both), then this could be bad news for other retailers. ClickThrough Marketing noted above that testing looks to have begun around the 20th December 2016, just in time for Christmas! Both ClickThrough and Merkle have noticed Impression Share start to increase over the past few weeks, something which you should definitely keep an eye on if you are selling homeware products.
Smaller retailers will be worst hit
For years, Google Shopping has been a way for smaller retailers and independents to be alongside the big boys for search queries. Where they couldn’t afford to be in the Search Engine Results Page (SERP) through Generics, Google Shopping provides users with much cheaper cost per click as well as a much better performance for sales. If Amazon started to roll out more products into their testing, smaller retailers will be the first to feel the squeeze as it becomes much harder for them to appear higher up the Shopping SERP.
You’ll need to work your Merchant Centre & Google Shopping Campaigns harder
Your Merchant Centre is full of useful reports and information for you to get stuck into. There is always something that you can optimise in your Shopping Feed and Campaigns. Google provide you with some top tips and best practice which are super useful here; Google Shopping Best Practices
- Use Search Query Reports to optimise your Product Feed. You can use Search Query Reports to optimise your Product Titles and Product Descriptions. Do this regularly and test the performance.
- Keep an eye on updates for Google Shopping Feed Specifications. We haven’t been told what needs to be updated for 2017 as yet. For now, you can find more information on the 2016 specifications (as well as some hints for what’s to come for 2017) in our blog here; 2016 Google Shopping Feed Specification
Personally, I feel as though one of the reasons why Amazon hasn’t tried this before is because they saw Google Shopping as a threat to their business. Yes Amazon have their own Sponsored Products product for advertisers, but Amazon’s success has been built on the fact that it’s users like to browse the Images and Compare the prices.
On top of this, Mobile is key to it’s success. With one click you can now purchase your items and get them delivered the same day. Heck, you can now take that a step further and walk into an ‘Amazon Go‘ store, browse the shelf, and simply walk out.
Google Shopping has changed the game for retailers advertising on Google. It works so well on Mobile and will therefore inevitably have had some sort of an impact on Amazon. I think that this test is an admission that Amazon need to use Google Shopping to stay ahead, albeit reluctantly. The fact that Amazon has held out for so long to test is impressive, but it was kind of inevitable that they would start to use the Google product.
The main thing for you to do, as always, is to monitor your Impression Share and to start optimising your Google Shopping feed.
Keep an eye out on PPC hubbub for more updates on this soon!
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