Amazon Has Stopped Using Google Shopping Ads. Completely.

Up until recently, Google Shopping ads were dominated by Amazon listings. It didn’t seem to matter what you searched for, chances are you’d see at least a handful of Amazon ads on there – but not any more.

The eCommerce giant employed a ‘Trojan horse’ strategy for years, advertising its products on Google Shopping – effectively a competing service. On 22 July, however, it retreated from Google Shopping auctions worldwide, effectively eradicating its presence on the ad platform overnight.

So, what actually happened here – and what kind of an effect will this have on Google and competing eCommerce brands?

The warning signs were there (kind of)

Amazon previously withdrew from Google Shopping when the Covid-19 pandemic began in 2020, so this isn’t the first time this has happened. The retailer had been gradually reducing its presence on Google Shopping over the past year or so too, presumably to test the impact it would have on sales and revenue – so there was some indication that the tide was turning over at Amazon.

Still, nobody could have predicted that the company would suddenly pull out of Google Shopping entirely, seemingly out of nowhere. Continue to reduce its ad presence, sure – but not withdraw completely. That’s what happened though – yet another reminder of just how volatile and fast-paced digital marketing (and PPC ads in particular) can be.

What does this mean for eCommerce brands?

When the biggest eCommerce company in the world makes a decision like this, there are going to be consequences. Although it’s too early to tell exactly what those consequences will be, industry experts are predicting:

• CPCs on Google Shopping ads could fall gradually
• Businesses using Google Shopping ads could see their impression share rise
• Potentially, brands on Google Shopping might see an uplift in click-through rates

At the moment, it looks like the majority of eCommerce brands could benefit from Amazon’s exit; after all, reduced competition usually means ad prices fall, making it easier for smaller brands to get noticed. Provided you don’t sell on Amazon, this news should only be a good thing.

It’s definitely not a good thing for Google’s parent company, Alphabet. Amazon spends billions of dollars on digital advertising each year – and a significant proportion of this budget was spent on Google Shopping. To give you an idea of how significant this shift is going to be, Amazon’s median Shopping ad impression share was 60% in the US and 55% in the UK – and this shifted to 0% in both markets overnight.

But the question remains: is this a permanent decision on Amazon’s part, or will they return to Google Shopping later in the year? Only a handful of higher-ups know the answer to this question, and they’re certainly not going to tell us. We’ll be keeping a close eye on things to find out.