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Advertising at Google and Amazon

Google’s parent company, Alphabet, generated 95.4 billion dollars in ad revenues last year, which made up around 86 percent of the companies total revenue.  These numbers show how Google is one of the most dominant advertising platforms.  Most of the revenue is based on search ads, making up 83 percent of total ad revenue.  Alphabet is even showed increased ad revenue growth through the start of 2018, but Amazon is emerging as strong competition to Google’s advertising dominance.

Not all types of goods can be sold on Amazon, so advertising in for areas such as automotive and travel are still remaining with Google.  For the most part, the brands moving to Amazon are selling consumer packaged goods.  Amazon is showing advantages in advertisements leading to purchases, which is part of why more advertisers are moving their ads over from Google to Amazon.   Some of these advertisers are moving over half their budget over, resulting in hundreds of millions in possible revenue shifting. From the article, it is also seen in some cases that 90 percent of searches for products on Amazon lead to sales.

This relates to class in how advertisers are deciding which sites are the best to show their ads, whether it be Google or Amazon.  While advertising on Google might lead to greater number of clicks or views, ads on Amazon have greater results in leading to purchases.  In the case of these consumer packaged goods, Amazon is the best place to show ads which will lead to purchases.  In areas such as entertainment, auto, and travel, where these can’t be directly bought off Amazon, Google still is the best place to advertise.  Google is looking for ways to maintain advertisement on its own platform, since Amazon is starting to pose a larger threat.


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October 2018