Google still holds the lion’s share of search ad revenue in the U.S., but Amazon is expected to chip away at that dominance over the next few years, according to a new eMarketer forecast.
Amazon’s advertising business has seen big growth in recent years. Revenue for the company’s “other” category, which includes Amazon’s increasingly important online ad business, climbed 37% to $3 billion in the second quarter. The company’s digital ads unit has been increasingly considered as a contender to take on the “duopoly” of Facebook and Google; eMarketer said in February Amazon was projected to claim 8.8 percent of U.S. digital ad spending in 2019, up from 6.8 percent in 2018.
Meanwhile, advertising is critical for Google: It made up about 84% of Google parent company Alphabet’s revenue last quarter, with search ads a major component.
According to a latest report from eMarketer, Google’s share of search ad revenues will drop due to Amazon’s rapid growth. Advertisers are moving to Amazon to capture consumers who are searching for products to buy. eMarketer predicts that Google will have 70.5% of the search ad market by 2021. It is important to note that Amazon surpassed Microsoft Bing in 2018 to become the second-largest search ad platform in the US.
Amazon last year passed Microsoft to become the second-largest ad platform for search in the U.S., according to eMarketer. After Google and Amazon, Microsoft, Verizon Media and Yelp hold smaller pieces of the search ad revenue in the U.S. In 2019, Microsoft has 6.5%, Verizon Media has 2% and Yelp has 1.8%.
On Amazon, sellers can bid on particular terms so they show up higher on users’ search results, which make it so that brands can reach people right as they’re ready to pull the trigger on a purchase.
Last year, the company’s advertising functions simplified their branding and came together as “Amazon Advertising,” and has since continued to beef up the offerings. The company agreed to buy an ad server and a dynamic creative optimization unit from Sizmek in May, which will help advertisers place ads and measure effectiveness and aid in personalizing ads using data.
In early October, the company held an event called “AdCon” to showcase Amazon’s growing list of ad products. The event drew about 400 people in Seattle,