After a year and a half of competing in Google Shopping auctions, Amazon suddenly stopped bidding on Google’s Product Listing Ad (PLA) format in the U.S. last week. Amazon’s presence was strongest and most consistent in the home goods product category, but it also appeared in Google Auction Insights reports for advertisers in other categories such as furniture, office supplies and novelty gifts.
Evaluating a set of advertisers across these product categories that have consistently seen Amazon competing in their Shopping auctions, Amazon vanished from Auction Insights reports on April 28th across all device types and hasn’t reappeared since.
While it’s not uncommon for competitors, including Amazon, to disappear from an advertiser's Auction Insights reports for a day or two at a time as a result of the natural day-to-day fluctuations in the auctions driving traffic, the widespread vanishing act observed over the last week points to Amazon itself pausing its Shopping campaigns.
This comes after its Shopping presence began to wane at the end of Q1, as shown by the chart below from the quarterly Merkle Digital Marketing Report.
Clearly Amazon has been reconsidering its Product Listing Ad strategy over the past few months before finally pulling the plug last week.
Quick Thoughts on What This Means
Given the expansion of Amazon’s Google Shopping presence over the course of 2017, it seemed as if the e-commerce giant might continue to expand to new product categories and become more aggressive in the categories it had already infiltrated in 2018. Clearly Amazon has other things in mind.
It’s hard to guess at why Amazon changed course, just as it was never totally clear why Amazon refused to participate in Google Shopping for several years. The wide breadth of its product offering, competitive pricing and ever expanding group of Prime members make it a formidable competitor.
Regardless, the advertisers that saw it as a competitor in Auction Insights over the last 18 months are now breathing a sigh of relief. While it’s difficult to quantify the impact that Amazon has had on these advertisers’ Shopping programs, it certainly pulled clicks and sales that would have otherwise gone elsewhere.
One recent update that may or may not have played a role in Amazon’s decision is the rollout of Google Shopping Actions in late March, placing Google Express ad units in the Shopping carousel via a pay per sale model in which Google earns a commission on every conversion from participating Express retailers. Looking at the same set of advertisers that saw Amazon regularly popping up as a competitor, all of them are seeing Google Express as a competitor in Auction Insights to some extent, though its impression share is fairly limited against most.
Amazon’s impression share began to fall prior to that announcement, so there were certainly other considerations at play. Still, it’s possible it played some role.
It’s also possible that this is only a temporary exit from Google Shopping. As always, we’ll post any updates to the situation here on the Merkle blog.