Amazon is eating up Google’s dominance in search ads
Amazon boss Jeff Bezos
Andrew Harrer / Bloomberg via Getty Images
Google still holds the lion’s share of search ad revenue in the US, but according to a new eMarketer forecast, Amazon is expected to tear that dominance over the next several years.
Amazon’s advertising business has grown significantly in recent years. Revenue in the company’s Other category, which includes Amazon’s increasingly important online advertising business, rose 37% to $ 3 billion in the second quarter. The company’s digital advertising division is increasingly seen as a contender for the “duopoly” of Facebook and Google. eMarketer said in February that Amazon is projected to consume 8.8 percent of US digital advertising spend in 2019, up from 6.8 percent in 2018.
Meanwhile, advertising is critical to Google: it made up about 84% of Google’s parent company Alphabet’s revenue last quarter, with search ads being a key component.
The new study focuses on search advertising and says the U.S. search ad market is expected to grow nearly 18% this year to $ 55.17 billion. Google holds a 73.1% stake in that, which equates to $ 40.3 billion, eMarketer said. Meanwhile, Amazon is expected to grow nearly 30% year over year, reaching $ 7.09 billion in 2019 and reaching 12.9% of the market share. Amazon’s share is expected to grow to 15.9% by 2021, while Google’s is expected to shrink to 70.5% of the market.
According to eMarketer, Amazon overtook Microsoft last year and is the second largest search ad platform in the United States. After Google and Amazon, Microsoft, Verizon Media, and Yelp hold smaller percentages of search ad revenue in the United States. In 2019, Microsoft has 6.5%, Verizon Media 2%, and Yelp 1.8%.
Top 5 companies in the US ranked by search ad revenue
At Amazon, sellers can bid on specific terms to make them appear higher in users’ search results, so brands can reach people right away when they’re ready to pull the trigger for a purchase.
In the past year, the company’s advertising functions have simplified the branding and merged to form “Amazon Advertising”, and have since been spicing up the offer even further. The company agreed to purchase an ad server and dynamic creative optimization unit from Sizmek in May, which will help advertisers with ad placement and measurement of effectiveness and personalization of ads using data.
In early October, the company hosted an event called “AdCon” to showcase Amazon’s growing list of promotional products. The event drew about 400 people in Seattle, CNBC reported.