Amazon Sponsored Products Ads Account For 82% Of The Marketplace Ad Spend

Amazon Sponsored Products Ads Account For 82% Of Its Marketplace Ad Spend

by Laurie Sullivan @lauriesullivan, October 25, 2017

Amazon Sponsored Products Ads Account For 82% Of The Marketplace Ad Spend | DeviceDaily.com

Amazon continues to build up its advertising business and analysts, and industry insiders and analysts are taking notice. Advertising agency Merkle, for example, has begun analyzing Amazon’s impression share for home goods product listing ads, and added into its latest quarterly search report a breakout of the type of ad formats and the growth rates.

The biggest ad format on Amazon, Sponsored Products Ads, gets about 82% of the company’s ad budget, estimates Mark Ballard, senior director of research at Merkle. Between second-quarter and third-quarter 2017, that ad format grew about 52%. Compare that with Google Shopping, which typically sees a seasonal decline in that time frame.

The data from Merkle’s quarterly search report shows that Amazon’s product display ad, the fastest growth format, grew more than 100% between the second and third quarter this year. “It’s all pretty nascent, but growing rapidly,” he said.

Total spending on paid-search ads grew 22% year-over-year in the third quarter, up from 20% compared with second-quarter 2017.

Google had a successful third quarter despite UK antitrust concerns that now allows comparison shopping sites to participate in Google Shopping auctions. Product listing ads (PLAs) generated 57% of retailers’ Google search ad clicks this quarter in the UK. Interestingly, Google UK CPCs rose slightly in third-quarter 2017, up from a 4% Y/Y decline in the previous quarter. UK click growth has slowed to 13% in third-quarter 2017. Advertisers also spend less. UK spend growth slowed slightly to 13% in Q3, from 14% in Q2.

In the U.S., spending on Google search ads rose 24% YoY in third-quarter 2017, as clicks grew 19% and cost per click (CPC) growth accelerated for the fifth straight quarter, rising to 4%. Advertisers also spent more on Google Shopping ads. This media rose 37% Y/Y, while spend on Google text ads increased 15%. Google Minimum Bids were 11% lower in September than at the start of April, while non-brand campaigns rose 30%.

MediaPost.com: Search Marketing Daily

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