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Amazon vs. Google – What’s the Impact for Advertisers in Ireland?

7 min read

Shane Lyons, Head of Search Strategy

by Shane Lyons, Head of Search Strategy


Alphabet (the holding company of Google), recently released their financials for the first quarter of 2019 and to many people’s surprise, their revenue fell below analyst estimates. Google have consistently expanded at 20% or more in previous quarters, whereas in the first quarter of this year they achieved growth of 15%; nearly a 10% decline in growth for the same period last year.


Of course, at the scale that Google now operates at, it is difficult to constantly achieve large scale growth, but it is also interesting to consider the reasons as to why they are experiencing this deceleration in ad revenue growth. Similarly, we are asking how these reasons might impact local advertising strategies here in Ireland.



The Rise of Amazon as a Marketing Platform


The main factor appears to be the rapid growth of Amazon’s Advertising Suite in markets like the US and UK. For the first time Google have a serious rival and many advertisers, especially online retailers, have diverted some of their Google budget into trialling activity on Amazon. Amazon is certainly popular here in Ireland but not remotely as ubiquitous as it is in the States where it is an absolute giant of eCommerce. $160.2B of the company’s total net sales of $232.9B in 2018, were generated from the US (69%), mostly thanks to the mass adoption of Amazon Prime over there.

More than 100 million people subscribe to Prime in the US and this has completely changed the way people shop there. Prime members are extremely loyal to Amazon, a recent survey by Feedvisor found that of all consumers who belong to Amazon Prime, nearly half (48%) buy products online once a week and nearly three-quarters (74%) shop online at least every few weeks. Once a shopper is subscribed to Prime, it seems that Amazon automatically becomes first preference for most purchases. They have already paid $119 for the privilege of free, two-day shipping so why not make the most of it?

What’s most concerning for Google however is that Amazon rather than Google is seen as the place to initiate research and then ultimately purchase products. Two-thirds of respondents (66%) typically start their search for new products on Amazon, compared with one-fifth (20%) who start on a search engine such as Google. And when consumers are ready to buy a specific product, 74% go directly to Amazon.

Locally, research on the e-commerce market is limited, so predicting the number of Amazon customers in Ireland is difficult however, An Post revealed a substantial growth in online shopping in general, up 40% in 2018 versus the previous year. It’s safe to say that Amazon’s influence on the retail market will continue to increase like other markets, but what will this mean for advertisers?



What is Amazon’s Advertising Offering?



Obviously with such an enormous audience of users, researching and making purchases on the site, it made logical sense that the company would step into the advertising space. Amazons Advertising suite was launched and flew fairly under the radar until revenue for the ad division surged from $2.8 billion in 2017 to $10 billion in 2018.  Suddenly there was a new digital advertising powerhouse capable of competing with the duopoly of Google and Facebook.

But what are the main products of Amazon Advertising? Like other platforms Amazon has several formats, allowing advertisers to target customers across search, display and video, below are the three that Core believe will be most popular with Irish advertisers:

– Sponsored Brands – Sponsored Brands appear in search results just below the search bar and showcase your brand logo, a custom headline, and up to three of your products. They have a high visibility placement and you can target your ad to keywords that are relevant to your brand and products.

– Sponsored products – Sponsored products are an ideal format to drive volume sales of specific products. Again, this format is keyword targeted and ads will appear as a sponsored listing among the first page of search results for specific products.

– Video ads – Amazon have recently boosted their video offering with the rebrand of IMDb TV where brands can run 15 and 30 second spots as commercial breaks within movies and shows. There are also video ad formats that can run on the Amazon site itself or an inline ad placement that can run on Fire TV.



What does this mean for our Clients in Ireland?


Unfortunately, there is no website just yet meaning we often don’t experience the same product consumers in the US or UK would use. Irish users can still register for Amazon Prime, but they must use the Amazon UK site for their online shopping.

Similarly, Ireland is behind other larger markets in the rollout of Amazon Advertising. It is currently possible to run display-based activity. Last year Core became the first Irish agency to use the platform locally with AIB and the hope is that the full advertising offering launches in Ireland sometime soon.

Google have a higher percentage share of search in Ireland than they do in US so ultimately it means that when it comes to search marketing right now Google is still the main player here in Ireland. However, looking at the trends of what has happened in the US it seems inevitable that when Amazon does launch locally it is going to significantly alter the search marketing landscape. We still do not know when that launch will take place but as soon as it does, you’ll hear about it.

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