Google has long dominated the paid search market, capturing 78% of $36.7B US search ad revenues in 2016. However, according to the same report, Amazon and Yelp are expected to see the strongest growth rates, as more and more users start their searches for products and places in those popular services. This trend — with respect to Amazon in particular — is having an impact in the CPG paid search realm.
For CPG brands that are not already making a serious commitment to Amazon for paid search, now is the time to do so for three key reasons:
First, according to a report last year, 55% of online shoppers start their product searches on Amazon, while only 28% start their searches on search engines like Google.
Second, the retail focus of Amazon, as compared to general search platforms like Google, results in less noise around keywords. Less noise around keywords means less competition, which results in potentially lower CPCs. Here is an example of what recommendations show up when you search for “dove,” a Unilever brand, on Google versus Amazon.
Finally, since a shopper can purchase products directly from Amazon, it is easy to measure conversions and ROI for CPG paid search spend. On Google, it is hard to connect click-throughs to purchases, making the measurement of conversions and ROI more difficult.
So, should brands reallocate all of their CPG paid search dollars to Amazon? Probably not. There is value in purchasing keywords on Google, particularly from a branding perspective. However, in order to make smart spend allocation decisions, it would be wise to begin thinking about the performance of keywords from a cross-channel perspective, like shown in the example below.