It’s been said that a major percentage of e-commerce searches start with Amazon (NASDAQ:AMZN) and end with a purchase on Amazon. For the longest time, however, any kind of search mostly began with Google, and the observation that when it comes to e-commerce, more and more searches now begin with Amazon, says a whole lot about the change that has been slowly taking place.
In a report by Business Insider, ad agency 360i executive chairman Bryan Wiener was quoted as saying (about Amazon): “They are becoming a significant player. They are starting to take revenue off of Google’s plate. It’s just started to reach a tipping point.”
The reason behind this shift isn’t too difficult to understand. Anyone who has goods to sell has to make sure that Amazon is the primary sales channel because its audience and markets are simply too large to be ignored.
But that’s not the only reason, though. Amazon has already branched out from selling products — both from other vendors and their own — to selling sponsored product listings ; you know-those items that appear first when users search for items. And as such sponsored product listings seem to be working, more and more ad agencies are jumping in on the trend, making Amazon’s future on this side of business more and more attractive by the minute.
360i is among the agencies whose clients are now selling their products on Amazon, with the agency reportedly trying to quickly build on this venture. Another agency that’s doing almost the same thing is Bullish. In fact, one of its managing partners, Michael Duda, confirmed that they have recently pulled out ads from Facebook and Google, had these transferred to Amazon, and immediately saw a 10% jump in sales.
Of course, the road ahead may be lucrative and promising, but bumps and stops are to be expected.
To begin with, Amazon’s main strength lies in getting consumers to buy stuff they’re already interested to buy, and not in enticing customers to buy stuff they don’t know about. Which means, when it comes to random searches, search giant Google and social networking Facebook will continue to have the edge, unless Amazon figures out a way around this.
Second, now that it has its own products to sell, Amazon’s focus might get diverted to selling their products and prioritize these above everything else.
Third, it might be harder to quantify the results of advertising on Amazon compared with advertising on Google and Facebook because the team that will handle advertising may not be as well-versed on digital ads as Google’s and Facebook’s teams are. This, in turn, will make it harder to strategize and decide on whether adjustments are needed or not.
Suffice it to say, while Amazon may be causing a stir in the digital ad front, it still has quite a long way to go. So for now at least, Google and Facebook need not to worry too much. But they shouldn’t remain complacent either.