Amazon Ad Engine Getting Hungry: Look Out Google Shopping
Will Amazon add a comparison shopping engine on top of its marketplace results? We may soon find out.
This week, Amazon made an announcement that it was starting to experiment in its mobile app to send users off Amazon. Seems crazy right? What about all the money Amazon spends to get users in the app? Well, let's be clear about the backdrop.
1 - Google continues to be under threat from AI, particularly ChatGPT and others. So we are in a particularly turbulent period of disruption that a leading edge set of consumers are working through new behaviors, which over the next 10+ years will ripple through the larger population.
2 - Amazon's own AI ambitions need more user intent data. A lot of that data is going to Google and ChatGPT today. Amazon is on the outside looking in.
3 - Amazon's needs more ad inventory. Prime Video and live sports have been huge unlocks for Amazon, and video ads are getting much smarter/interactive. But online, people go to Amazon to shop for things with a guarantee to shop quickly, not to find any product across the world. Above the fold of most Amazon searches are 60%+ or more populated with ads. There is only so much more to "add". More search terms creates more ad inventory. Google has been the best at this for almost a generation now.
So what is Amazon's experiment? Amazon says:
"we’ll show select products in our search results even if we don’t sell them in our store, and link to the brand’s website to make it easy for customers to purchase them there"
Notably, the quote is from Amazon's VP of search and "conversational shopping". Amazon recognizes that consumer purchase experiences can increasingly become a conversation and the destination inventory may not be in an Amazon-affiliated warehouse.
How does Amazon get information from a brand?
Right now, you have to request to get into the experience via an e-mail address. Soon, you may see Amazon become more like a comparison shopping engine. Perhaps the engine that Google Shopping could have been if Google knew what it was doing.
The fact that the experience is in Amazon's mobile app means that Amazon has a pretty good idea where you are as well which could increase the localized experience.
The fact that a lot of this messaging around this announcement is for "brands" and not "sellers" gives you some idea where their priorities lie. I expect this could be tied to Brand Registry even. More information to display means users can ask Amazon more questions and get better answers. It also ultimately gives Amazon more ad surface to display.
Amazon is also targeting Google "second search" behavior which is also common. After Amazon, Google Shopping is many times my second search. Amazon is asking a simple question: "Why not us?"
We might soon know the answer.
