Per CNBC, industry sources says some advertisers are moving more than half (between 50-60%) of the budget they normally spend advertising with Google search to Amazon ads instead.
It’s not just 1 or 2 companies: The moves, so far, have amounted to hundreds of millions of dollars, according to execs at multiple agencies.
Amazon is making huge headway in the advertising game, becoming the 3rd largest US digital advertising platform behind Google and Facebook.
It also doesn’t hurt that around 49% of product searches begin on Amazon — meaning that Google is becoming an unnecessary middleman.
One agency exec told CNBC that brands want to move to Amazon because its platform directly facilitates sales, while Google’s search ad could require consumers to set up accounts and input credit card info on separate websites.
Thus far, Google parent Alphabet has remained fairly unaffected (its overall ad revenue growth actually accelerated in the first half of 2018). Google is still the dominant platform in the US, bringing in an estimated 37% of digital ad budgets in 2018.
But, Amazon’s growing success could spell trouble down the road for Alphabet, which generated $95.4B in ad revenues last year — or 86% of its total revenue. And guess what? 83% of that number came from search ads this year.