As two of the biggest potential sales channels for online retailers, both Google and Amazon can offer new customers and revenue alongside other benefits. But there are some key differences between Shopping Ads on Google and Amazon Sponsored Product advertising which could lead to costly mistakes for your business.
The distinctions between Shopping Ads on Google and Amazon Sponsored Product adverts can catch out new advertisers and marketers. And those with more experience can fall into the trap of just copying their existing approach directly onto a new channel. Running both advertising services in a complimentary way can bring the biggest rewards, but requires a strategic approach for how each platform forms part of your retail plans.
The key difference between Shopping Ads on Google and Amazon Sponsored Products comes from the different background of both internet giants. There can be few people unaware of Google’s dominance in search, but it’s important to note their continued reliance on advertising as a primary revenue source. In addition, their retail search dominance has continued to develop and evolve over many years since the launch of Froogle in 2002.
Amazon offers retail advertising from a different perspective as an eCommerce business which has expanded into other services. The main source of revenue comes from Amazon selling products for itself, or allowing third party retailers to do the same. Advertising provides around 1% of the profits Amazon makes from selling products to consumers.
As a result, Shopping Ads on Google is designed to deliver returns to retailers from both delivering sales and the additional benefits of advertising a business, but Amazon Sponsored Product Advertising is focused on delivering an individual customer transaction.
With continued growth for Google and Amazon, along with an accelerated rise in online retail, it’s essential for anyone in eCommerce to understand the similarities and differences of both platforms to deliver the best value to your business.
How adverts display with Shopping Ads on Google and Amazon Sponsored Products
Retailers within the UK and European Economic Area will need to use a Google Comparison Shopping Service to run Shopping Ads on Google. You can see a complete guide to CSS partners, here, with the choice of accessing tools for your business to run campaigns, or to have a managed service from a Google Premium CSS partner such as RedBrain.
There are additional promotional options available, but the core Shopping ads are
- Product Shopping Ads: Individual product listing advertisements which appear on search results pages, within the Shopping tab, or on third party websites via Google Search Partners and the Google Display Network.
- Showcase Shopping Ads: groups of related products which will display on more general, category-level search results, allowing customers to compare relevant items from your range.
- Local Inventory Ads: These are used to share in-store information and products to encourage traffic to your physical locations.
Amazon Sponsored Product ads have some similarities to Shopping Ads on Google. The advertising is available to both third party sellers using Amazon to retail products, and vendors whose products are shipped and sold by Amazon.
Any product ads will need to be eligible for the Amazon Featured Offer box (the box on the product detail page which allows customers to start making a purchase) to be enabled for display, which requires a Professional Amazon Seller account along with a mix of competitive factors including price, shipment and seller reputation. To be able to use the Sponsored Brands adverts, businesses need to be included in the Amazon Brand Registry.
- Sponsored Product Ads: Displays individual products throughout the results when a customer conducts a search on Amazon.
- Sponsored Brands: A headline banner displayed at the top of search results which allow the display of multiple products accompanied by a custom headline and logo.
- Sponsored Product Display Ads: Allows you to display individual items on the specific product page for similar or alternative products.
Both of the advertising platforms are based on an auction system with costs calculated on a cost-per click (CPC) basis when users interact with them for product ads, and a cost-per-engagement (CPE) basis for Showcase Shopping Ads when a user expands the advert for 10 seconds or more.
In 2020 Google (and Bing) opened up their Shopping advertising with free listings appearing alongside the paid promotions to aid smaller businesses during challenging times.
Shopping Ads on Google and Amazon Sponsored Products Similarities
As a dominant example of a business generating revenue primarily from advertising, it’s not surprising that the Google model for ad auctions has been adapted by a number of platforms including Amazon Sponsored Products (along with Bing Shopping, Facebook and others).
Google selects adverts to display based on the bidding amount in conjunction with a Quality Score to ensure customers are likely to click on promotions and find what they have been searching for. The same idea is used by Amazon, although it focuses more on profitability alongside relevance.
This means that success on either advertising platform requires ongoing optimisation to ensure you have a good quality score and therefore more success at potentially lower cost (Google), or that you’re winning the battle to secure the Best Buy box (Amazon) and your adverts remain relevant and profitable.
Bid management options for both advertising platforms are also similar. Businesses have the option of setting manual fixed bids, or using automated options built into each service. With Google’s Enhanced CPC or Smart Bidding, or Amazon’s Dynamic Bids, the system will raise amounts based on the chance of an advert being more successful.
The success of campaigns on both Shopping Ads on Google and Amazon will rest on both your bidding, and the optimisation of your campaigns. This includes the structure of your product categories, the product titles and information, images, and other associated data such as user reviews.
You can see more detailed advice in our guide explaining how to drive sales with a great product data feed for Shopping Ads on Google. And the same elements of optimisation are available for products being promoted via Amazon. This includes highlighting the most important relevant product information and selling points, and images do a great job of selling your products visually.
Key Differences between Shopping Ads on Google and Amazon Sponsored Products
Although there are similarities between both retail advertising options, it’s the differences between Amazon and Google services which will have the biggest impact on your business. Especially when it comes to ensuring your campaigns drive significant success and profitable sales.
As the most dominant search engine for most of the world, Google can deliver a huge volume of potential customers. This is true in the UK, where it consistently holds around 86% of the search engine market, and 56% of British shoppers use it for discovery and recommendations.
This means Shopping Ads on Google can reach potential consumers at all stages of the conversion funnel towards a purchase, fuelling brand awareness and recognition before capturing purchases based on more transaction keywords.
By contrast, Amazon is used by almost 90% of UK shoppers and Amazon Prime is accessible to 40%, with a market share estimated to be more than 30% of all UK eCommerce. Unlike Google users, this audience is beyond discovering and researching potential purchases, and is at the final stages of the consumer journey.
The result is that Amazon advertising is likely to have a higher conversion rate based on an audience focused on purchasing, but it doesn’t contribute as heavily to finding new customers and raising brand awareness as Google.
Shopping Ads on Google is slightly unusual in online advertising, as it doesn’t allow you to bid on specific keywords for your products to appear against. Instead, Google uses the information supplied by your product categorisation and data to choose when your inventory should appear.
This process can be refined by adding negative keywords to prevent products displaying for the wrong terms, and built on with a range of options including remarketing lists, retargeting previous customers or those who failed to complete a purchase, and detailed bidding adjustments through each day to ensure you’re reaching the right people at the right time.
Our data shows, for example, that if someone browses a review site for a television on Saturday, then they’re most likely to complete a purchase on the following Monday, making it the ideal time to remarket your TV range to them.
Amazon is more traditional in using manual or automatic keyword targeting with options for Exact, Broad or Phrase matching via manual targeting, and the ability to add negative keywords. More information on the Amazon advertising keyword functionality is available via Amazon Seller Central, and will be familiar to anyone with experience in PPC advertising.
Audience Interaction and Data:
The role of Google is to direct potential customers to the retailers who can meet their needs. As a result, Shopping Ads on Google direct visitors from your adverts to your eCommerce website which allows you the opportunity to increase brand awareness and loyalty, upsell and cross-sell other products, and lets consumers share data with you.
Your business can use that data for retargeting and remarketing. And a percentage of the customers obtained via Shopping Ads on Google are likely to return to you directly in future, delivering a higher lifetime customer value.
Selling via Amazon means that customers will complete their purchases through the Amazon website, which means you will relinquish your ownership of the customer relationship. Sales are viewed as one-time transactions, which means you can’t remarket to previous consumers, or direct them to your website. Brand awareness is limited to your Amazon storefront, and Sponsored Brand advertising.
The costs associated with Shopping Ads on Google campaigns will largely be defined by the choice of CSS. Many, including Google Shopping EU, will charge a fee based on a percentage of bidding amounts, or may require a set monthly fee. Some, including RedBrain, offer a managed CSS service purely on the basis of commissions from completed sales, with no upfront costs.
Advertising on Amazon requires a Professional Seller Plan, which costs £25 per month, and Amazon will also take a referral fee on each item sold, which varies between product categories. This is in addition to any CPC fees you pay to advertise your products.
Should your business use Shopping Ads on Google or Amazon Sponsored Products?
Smaller businesses may benefit from the free listings introduced by Google with relatively little investment of time to set up a product data feed, or manually uploading inventory in the required format.
Larger companies with substantial product inventories should see significant uplifts via Shopping Ads on Google whether from internally-managed campaigns, or by working with a Google Premium CSS partner such as RedBrain. By using a commission-based CSS service, it removes the financial risk from trialling Shopping Ads, and offers the benefits of proven artificial intelligence and human expertise.
Perhaps the biggest recommendation is that Amazon itself advertises products through Shopping Ads on Google to capture sales earlier in the purchase funnel.
It’s harder to state a general rule for businesses to use Amazon Sponsored Product advertising. Profitability is a key concern as any sales from advertising will result in both CPC costs and seller referral fees which can significantly reduce profit margins.
You will also be paying to promote product sales where Amazon will own the customer relationship, which may be a concern for businesses focused on increasing lifetime value. Your Amazon sales will be largely ring fenced within the eCommerce marketplace, which means you may need to keep investing in repeating existing advertising to retain customers in addition to finding new business.
But this shouldn’t prevent you from retailing through Amazon as a secondary channel, and advertising when it makes sense. With 40% of UK shoppers able to access Amazon Prime and the benefits of faster free delivery, many customer journeys will start and end within Amazon. Seasonal holidays and events are key times when free one-day shipping will be a huge incentive to consumers, especially if you charge for the same benefits through your own eCommerce website.