CHART: Google Raked In The Ad Dollars When It Went After Amazon Last Year
Google CEO Larry Page hinted to Wall Street on his Q4 2012 earnings call that he was "really excited" about Google's new e-commerce play, Google Shopping.
The new search feature allows retailers to buy search results for people looking for something like "laptops" and display them as products -- a bit like the way Amazon displays its goods.
Google Shopping was a big bet for Google because until September it was free for retailers to list products that were searchable in Google Shopping. The results of that free-for-all were not great, so Google asked clients to pay to be listed.
Google's listings appear ABOVE search listings for the same products on Amazon — an indicator that the two companies are locked in a war over e-commerce.
We've got data from Marin Software, a big buyer of ads on Google for clients such as Starwood hotels, showing a big boost in spending on "product listing ads," the ad format used by Google Shopping. The new payments appear to be working quite nicely for Google. Adspend on product listing ads increased 600% from January to December among Marin's clients, the company says:
“When Google announced their new enhanced shopping experience and the intent to transition shopping ads from organic results to paid, they took a risk that the move would alienate retailers,” says Matt Lawson, vp/marketing at Marin. “Google’s decision, however, appears to be paying ... During the fourth quarter of 2012, we saw some retailers allocate as much as 30% of their spend towards PLAs."
This chart shows that advertisers shifted their spending mix after Google asked them to pay for PLAs. Google Shopping ads are now eating into the market share of the traditional text ads that Google is known for, Marin says:
Disclosure: The author owns Google stock.
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