It appears Amazon is saying goodbye to Google Shopping—for now.
In late April, we saw the e-commerce giant suddenly disappear from our customers’ Auction Insights reports. The move could potentially end Amazon’s year-and-a-half run in Google Shopping, a period in which it grew to become one of the largest competitors within the channel.
Speculation as to why Amazon has paused its Shopping campaigns continues to grow. Any number of reasons could be driving the company’s decision. Until Amazon issues a statement regarding its departure (unlikely), it’s all a guessing game.
Amazon’s Shopping efforts were most heavily invested in the house and home vertical, but the retailer won majority impression share in several other categories in 2017, including pet care, sporting goods, and appliances. We analyzed Amazon’s impression share in these verticals in the 2018 Google Shopping Benchmarks Report, confirming the retailer’s increasing presence in the space throughout 2017.
2018 has been a different story for the world’s largest retailer. In January Amazon’s impression share began to dip in all major verticals but pet care. By March all four verticals had experienced a sharp decline, with each dropping to its lowest point since April 2017. A brief increase followed in April before Amazon paused its Shopping Campaigns.
Below is a look at Amazon’s impression share by vertical in Google Shopping over the last 16 months. For more information on Amazon’s presence in Google Shopping, consult the Sidecar Point of View series on growing competition within the space.
Exactly why the mega retailer suspended its Shopping campaigns remains unknown, but news of Amazon’s pause in Google Shopping raises new questions for retail marketers: What does this mean for my approach in Google Shopping? Is there potential to capitalize in the channel while the company remains dormant? Should I adjust campaigns and bids immediately in Amazon’s wake?
To be fair, there are no definitive answers. No one can be sure if and when Amazon will return, and its absence may make other major retailers rev up their strategy to increase impression share.
What Does This Mean for Retailers?
Since Amazon shuttered its Shopping campaigns in late April, we haven’t seen CPCs drop dramatically across the four verticals the retailer was most invested in. However, there is a possibility that CPCs will still dip in those sectors, giving retailers who were once outperformed by Amazon the opportunity to capitalize on traffic at a lower cost. This “best bang for your buck” philosophy may hold true for many retailers with Amazon leaving a void, but the trend could be short-lived if retailers jump in to drive CPC back up.
If you’re in a niche industry where Amazon had a presence and served as the main competitor, its exit will likely have a bigger impact on your Shopping performance. For smaller companies and companies in a competitive vertical, don’t expect to see a dramatic increase in traffic within the channel.
Stay Within Your Means
No universal method of capitalizing on Amazon’s hiatus exists across verticals. With that said, it’s important not to overextend your strategy in wake of the company pausing its Google Shopping spend. Your performance may improve and you’ll be more efficient by analyzing CPCs and traffic, but with the news still fresh and retailers waiting for the smoke to clear, thinking rationally is a smart strategy. Keep your budget steady and remain focused on your goals while closely monitoring any new trends that arise.
Look at Impression Share and CPC Regularly
Analyzing competitive reports is a monthly task for most retailers. In an effort to to get the most out of Amazon’s absence, consider looking at impression share and CPC on a daily basis. This will help gauge whether Amazon has returned to the channel, what’s regularly affecting performance, and how you can capitalize if Amazon stays out of Google Shopping long term.
Measuring mobile and desktop performance may also shed light on where to invest more. For instance, if you saw Amazon bidding more aggressively on mobile within your space, its departure will free up a large amount of clicks for retailers to absorb. That same sentiment goes for desktop. View your device metrics and see where you can hone in on optimizing performance.
Don’t Overreact, Don’t Underreact
Google Shopping is a channel in flux. With the competitive landscape constantly changing, retailers can operate from a position of strength by staying close to developing trends and keeping them in perspective. Avoid sweeping bid strategies, and while Amazon remains dormant, enjoy some extra efficiency and traffic without increasing cost.
In the same vein, don’t take Amazon’s dropout for granted. Turning a blind eye to the news could be a missed opportunity. Stay agile in your approach and continue to monitor your performance regularly. Should Amazon permanently stay out of the space, retailers with an adaptable strategy may be best positioned for a big win in the long term.