According to CNBC, now, advertisers are starting to shift more than a quarter of the budget they normally spend on search ads on Google to ads on Amazon, where more and more consumers are searching for what they want to buy.
This trend makes Amazon the biggest threat to Google, the world’s largest advertising platform, since Facebook started going public in 2012.
Although Google is the most popular search engine, surveys from Survata show that Amazon is the first place many Americans use to search for products. In particular, the platform has become attractive to consumer packaged goods brands on Amazon itself or its competitors.
So far, Google remains firmly at number one, with $54.7 billion in global ad revenue in the first half of 2018, up 24% from a year earlier. This “sub” segment of Amazon, largely from advertising, brought the company $4.2 billion in the same time period.
In September 2018, research firm eMarketer raised its forecast for Amazon, estimating the company will bring in $4.61 billion in US advertising revenue alone in 2018, accounting for 4.2 percent of total spending. spend on e-advertising in the country in 2018. The company explains that many people have turned to the e-commerce site to search for products, instead of Google.
Google last faced a threat to its core business when Facebook went public in 2012. The social networking site grew its advertising revenue from $4 billion in 2012 to nearly $40 billion in 2017, as Facebook began placing more ads across mobile devices, video, and improved its ability to target users. In the US, Facebook is currently the 2nd largest advertising platform, accounting for 19% of businesses’ digital ad spend in 2018.
If Amazon follows a similar trajectory, it could compete with Google’s search advertising, one of Google’s parent company Alphabet’s biggest revenue streams. Alphabet does not split Google’s advertising revenue. It includes ads on YouTube, Gmail, Google Maps, Google Play and other platforms.
At the present time, Google still holds the leading position among electronic advertising platforms. The company is expected to account for 37% of total ad spend in the US in 2018, down from 41% in 2016. Google’s market share continues to decline as the overall digital advertising market grows. , and smaller companies are attracting more money.