How Amazon’s Gain Is Google’s Loss
Marketers may favor Amazon over Google
Amazon’s (AMZN) growing influence of online product searches, as shown by the United Parcel Service (UPS) survey, is bad news for Internet search engine companies such as Alphabet’s (GOOGL) Google, Microsoft (MSFT), and Yahoo (VZ). Amazon’s rise as a product search destination is also a threat to ad-funded companies such as Facebook (FB) and Twitter (TWTR). If shoppers are heading to Amazon to search for products to buy, then marketers may be encouraged to increase their ad spending on Amazon at the expense of the likes of Google and Facebook.
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Potentially strong draw for local merchants
The rise of Amazon as the favored destination for online product searches could appeal to local vendors. Since most people spend their time and money locally, local vendors may want to advertise more on Amazon.com to increase their sales. This local shopping has prompted Google and Facebook to bolster their local presence. Small businesses make up a large part of Facebook’s active advertiser population, as shown in the chart above.
Amazon could fuel revolt against Google
The survey showing Amazon’s popularity in online product searches couldn’t have come at a more delicate time for online advertising incumbents. Recent reports and interviews have shown that marketers are not pleased with the growing influence of Facebook and Google as advertising powerhouses. According to eMarketer, Facebook and Google alone could capture 60.0% of digital ad spending this year. Therefore, some marketers are contemplating increasing their ad spending on smaller advertising platforms, such as Amazon and Verizon’s AOL and Yahoo.