Daily Management Review

Consumer brands leaving Google for Amazon


Amazon's advertising business is booming. Some advertisers convert more than half of the budget, which they usually spend on advertising on Google, into advertising on Amazon. We are talking about hundreds of millions of dollars, according to CNBC with reference to the managers of several media agencies.

Mike Mozart
Mike Mozart
Amazon’s success may be a rare threat to Google’s parent company, Alphabet, which last year received $ 95.4 billion in advertising revenue — 86% of its total revenue.

Google is the dominant digital advertising platform in the United States. In 2018, it is expected that its share will account for 37% of online advertising budgets.

Until now, virtually nothing threatened Alphabet’s advertising revenues. The growth of its total advertising revenue accelerated in the first half of 2018 compared with last year.

Not all categories of brands transfer money to Amazon. The tendency is observed mainly in the category of consumer goods. At the same time, car and travel companies are not switching to advertising on Amazon, because their products and services are not represented on this platform - at least for now. In addition, advertisers move some of their advertising costs from other sites to Google resources, in particular YouTube.

Managers of six media agencies have confirmed that Amazon is making huge strides in advertising.

This is consistent with a recent report by eMarketer, according to which the e-commerce giant has become the third largest US online advertising platform after Google and Facebook.

One of the managers of a large agency told CNBC that some brands prefer to advertise on Amazon, as this directly correlates with sales. According to Survata, in about 49% of cases, product search begins on Amazon.

A source at another major large agency reported that some of the brands they work with transfer 50% of their advertising budgets, that is, hundreds of millions of dollars a year, from Google to Amazon in some regions of the world.

At the end of September, Google announced an update on advertising regulations for financial products and services. The corporation lifts a ban on advertising cryptocurrency projects and plans to allow ads to be placed on regulated cryptocurrency exchanges in the United States and Japan.

source: cnbc.com