Advertisers shifting budget from search to Amazon

October 25, 2018

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NEW YORK – Amazon has become the third largest digital ad seller behind only Facebook and Google. And more than 30% of those polled in the Amazon Advertising Forecast released Thursday by Third Door Media (Search Engine Land’s parent company) indicated they plan to shift budgets from search to fund their spending increases.

The survey, conducted in late August and early September 2018, polled 681 digital marketers and advertisers to better understand the challenges and opportunities that Amazon advertising products present. It was presented Thursday at the SMX East conference in New York City.

The results show that not only has this sleeping giant awoken, but marketers plan to invest in staff positions and technology tied to advertising on Amazon, especially in its search group, Amazon Marketing Services (AMS).

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Why it matters. The shift from traditional search ad budgets to Amazon has potential implications for Google and Bing as they face growing direct competition from the online retail giant. As Third Door Media Editor-in-Chief Ginny Marvin notes in her preface to the survey findings, “The disruptive nature of Amazon’s ad business is starting to show, which begs the question: Has the Google-Facebook duopoly been put on notice? Perhaps it has.”

There are also ramifications for search agencies who will need to hire additional talent to manage the Amazon campaigns. Currently, nearly a third of advertisers outsource Amazon advertising to an agency or consultant, with a quarter reporting that they have an in-house Amazon marketer or team. Another 22% rely on their in-house paid search team, while 14% have a dedicated in-house e-commerce marketer or team.

Bottom line: The survey results demonstrate the robust health of the online advertising landscape. Although budgets are shifting from more traditional ad formats, the overall trend is for continued growth as new channels, such as those offered by Amazon, continue to emerge and offer attractive avenues to reach prospects and customers.

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