Amazon is Google’s Biggest Competitor

Amazon is Google’s Biggest Competitor

Back in 2014, former Google CEO and current Alphabet Chairman, Eric Schmidt, told a live audience in Berlin that his company’s biggest search competitor was not Bing or Yahoo. It was Amazon.

“But, really, our biggest search competitor is Amazon. People don't think of Amazon as search, but if you are looking for something to buy, you are more often than not looking for it on Amazon."

Eric Schmidt, 2014

He was right of course, and that trend continues at a pace that should trouble anyone who works for the search giant. 2016 was the year that those Amazon searches eclipsed consumer searches on Google; per BloomReach, 55% of all searches originate on Amazon.

 

Google’s Other Business Problems Don’t Stop with Amazon

The troubling news (especially for a company who still makes the vast majority of its income from search-based advertising) doesn’t end there. Facebook ads are much cheaper for consumer brands, making it easier for startups and boutique brands to do big promotional campaigns. Facebook ads are also more engaging, with visuals, video, and other features that offer more versatility than a flat text ad. Twitter and LinkedIn provide similar value for B2B companies, with audience-based targeting that goes far beyond keyword relevancy.

As Target, Amazon, and Walmart continue to expand their sponsored ad services, that widens the gap between Google’s primary value and any brands singular goal of getting products in front of searching customers. Buying those ads are becoming a valuable strategy for consumer packaged goods (CPG) companies. The Clorox Company recently revealed that it grew its online business by over 50% last year, with sponsored product ads in Amazon fueling much of that growth.

Eric Reynolds, Clorox CMO said: “Buying keywords in our category on Amazon — just like paid search on Google — is an efficient way to reach consumers. We are seeing great return on investment on Amazon because people are ready to buy there.”

With Walmart’s programmatic ad buying program expanding, it’s a given that more and more CPGs will turn to investing and diversifying their ad buys across big retailers. Reynolds:  “We treat Amazon the same way we treat Google, YouTube and Facebook, for example.”

 

Where does that leave Google?

Let’s be clear: Google is doing just fine. Now. Its profits climb, even with peripheral and existential threats to its primary revenue generator (search). Last quarter, Alphabet saw its revenue jump an eye-popping 21%, and that’s despite the headline-generating $2.7B fine issued by European regulators for “anti-competitive behavior.”

Google, in its earnings statement, pointed to the “Other Bets” side of their business as being only 1% of its overall income. (“Other Bets” includes anything that isn’t generated from search, its considerable cloud business, or the Google Play store.) The “Other” business is growing, but at $248M (and losses of $772), diversifying their footprint has a long way to go. Its move into consumer electronics shows, however, that the U.S.’s largest tech biz will use its considerable resources to experiment, even if that means “me, too” products like Google Home and the Pixel smartphone.

Google’s “other” experiments include an aborted attempt at the fiber business, and a recent announcement that it’s launching a streaming T.V. service. With Amazon pulling the plug on its proprietary live T.V. service, we can only assume that Google’s attempts probably won’t be met with much in the way of success.

 

What this Means for Vendors and CPGs

If there’s anything we know in 2017: brands can’t afford to get complacent, even with tried and true marketing tactics like paid Google search and SEO. Search behavior is more dynamic now than its ever been. So: what to do?

  • Try out ad models on all third-party sellers like Target, Walmart and Amazon. Start with small spends and invest more when you see when, and where, those spends drive the best results.
  • Don’t abandon your SEO efforts, especially on mobile. You still need to optimize your own e-commerce pages to take advantage of every available search opportunity.
  • Get smart about Amazon search; it doesn’t work like Google’s.
  • Give ALL of your product pages on EVERY retail site extra TLC with keyword optimized product titles, high-res and detailed images, reviews, and bulleted product descriptions.
  • Invest in resources that keep an eye on your entire online business. Your search and e-commerce team may need to grow, which could include outsourcing the management of all of our online content as well as your ad campaigns.

The bottom line: no matter how consumers find you, as long as you pay attention to their discovery path and their online search habits, your online business can grow.

 

 


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