October 11, 2018

Advertisers are ditching Google and putting their search budgets into Amazon

Google is losing advertising partners as Amazon’s more centralized, seamless experience has enticed many firms to jump ship.

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.

BREAKING: Once again, Amazon brings the heat

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.

Ain’t nobody got time for that!

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.

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