Amazon vs. Google: Why Jeff Bezos won’t buy Google’s Product Listing Ads (PLA)

Amazon vs Google

What is worse – to forgo the chance of earning $1,000,000 or to earn $1,000,000 knowing that you have to pay half of it to your strongest competitor? Amazon CEO Jeff Bezos decided that, no matter how many millions they could earn with it, Amazon won’t buy Google product ads.

Amazon & Google – from “friends” to rivals

Once upon a time, Google and Amazon were mutually making their race – each to become the world’s biggest player in their area of business. Google was Amazon’s main resource to deliver customers and Amazon was Google’s number one source of income.

But in Google’s world, there is no such thing as a gentleman agreement. Time after time, they tried hard to enter the retail branch. Just think of its effort to establish in 2010, which flopped and was merged into Google Product Search.

Amazon, on the other side, was called the “sleeping giant of the advertising world” because, despite of its huge customers’ data insights, it showed no big ambitions to get a foot into the marketing world. This dramatically changed with the announcement of the Amazon Advertising Platform (AAP) in October 2012.

“For the last couple years we have been very focused on building a global scalable ad business and figuring out what it takes to create a great customer experience. We just didn’t feel ready and now we do”, Amazon’s global head of advertising, Lisa Utzschneider, stated in an interview with Ad Age shortly after its official announcement.

For Google, this announcement must have sounded almost like a declaration of war. What once had started as a strategic win-win relation had later become a respectful rivalry of two super powers and then ended up in open battle.

The battle to become the no. 1 search engine for product searches

“Google and Amazon both have the same end goal, to be the destination that people go to to do their product searches, and Amazon’s winning that battle,” market insider Michael Griffin told The New York Times in 2012.

But today, two years later, it is Google who won the first battle. Google’s Product Listing Ads and the switch to a paid shopping platform (Google Shopping) were a huge success story since their worldwide rollout in 2012 and 2013.

With this move, Google killed several birds with one stone:

  • Both data relevance and user-friendliness for retail product searches with Google have increased a lot – and therefore Google could gain market share.
  • Organic search results have lost relevance compared to the straight-forward PLAs that include product images and prices. For Amazon this is a slap in the face as they rank on top positions for most retail searches.
  • With Amazon Marketplace, Amazon earns a commission with every sale, but Google gets paid by click. And it is a lot easier and less committal for a retailer to set up a Google Shopping Campaign than to sell products at Amazon Marketplace.

No wonder, that Amazon doesn’t want to play along and buy Google Product Listing Ads – and pay for customers they had for free before Google started PLA.

Amazon strikes back: Product Ads á la Amazon

Instead, Amazon decided to offer product ads themselves. They had already been doing this for several years, but only within the U.S. market and on a very low scale. Now they decided to get more money out of pay-per-click product ads on their own website and increased its effort to promote Amazon Product Ads. The program was rolled out in other countries (Great Britain, Germany and France) and product ads are now displayed on more prominent spots on the Amazon site than ever before.

  • Screenshot 1: Amazon Product Ads prominently displayed in the offer listings page together with Marketplace listings

Product Ad on the Marketplace listing

  • Screenshot 2: When a product is not available within the Amazon Marketplace, Amazon Product Ads with external links even show up as search results

Product Ad on the Amazon search page

What do you think, did Amazon make a rational choice to boycott Google PLAs – or are they just losing a lot of money fighting a war they cannot win?

Further reading

[shareaholic app="share_buttons" id="19406647" link=""]


Andreas Meyer

Andreas Meyer has been an PPC specialist since 2009. In the years since, he has been in charge of accounts of all sizes among diverse industries. As of 2014, he works as a PPC analyst in the Business Intelligence division. His areas of expertise are PPC account optimization and Google Shopping.

  • I have to admit that amazon’s product ads do not look like ads. Good job! But I’m not sure if any big online retailer can afford to boycott Google. The issue with Amazon and PLAs reminds me of the Google knowledge graph and Wikipedia. As long as Google provides a service that offers the users what they are searching for, other companies almost need to use paid services or they gonna loose valuable traffic (although there is no paid service available for Wikipedia…).

  • Andreas Meyer

    Hi Max – you’re right; Amazon Product Ads don’t really look like ads. That’s good for the amount of clicks, but bad for the conversion rate (many users will immediately go back to Amazon as soon as they realized that they are on an external site). According to CPC Strategy’s Comparison Shopping Report, Amazon’s conversion rate was about equal to PLA (even a little higher) in Q3 and Q4 2013 but really fell behind in Q1 2014 (see ). As a profit driven online marketer, I would sometimes prefer that Amazon Product Ads looked more like ads – and got less traffic but had a higher conversion rate.

    For the retailer, the best method to increase conversion rate at the moment would probably be to imitate Amazon’s design and offer Amazon Checkout as most prominent paying method (at least for Amazon Product Ad customers) …

  • MBA

    Amazon really needs to “fix” their home page. If they want to take on Google, they need to stop selling and start servicing. It’s been staring them in the face for a decade. Google brilliantly fought the urge to clutter their home page with ads. Amazon needsd to do the same. Stop thinhing like a profit driven sales machine and start thinking like a consumer. The home page should have a large Amazon logo with a large searh box with MAYBE the phrase: What are you looking for? Simple as that.

    • I like your thought that Amazon needs to work on their homepage. They actually have developed great service features (like the rating or recommendations) in the past, but poorly integrated them in regard to design and usability.
      I also think that a huge number of online shops lack the ability to address customers in the way they should be addressed, although I wouldn’t want to compare Amazon and Google here as there is more to Google than just selling products. I personally use Amazon because I can find everything in one place, which is handy. But it is not a great shopping experience or fun…