Amazon dominates commerce. The company’s ad revenue grew 18% in Q2 ’22, faster than Meta’s, Snap’s, and Twitter’s, all of which were hurt by the pullback in ad spending. Today, Amazon captures 41% of e-commerce sales, and according to our latest Consumer Energy And Retail Pulse Survey, 66% of US consumers rely on Amazon to research products online. Because of its dominance, competing with Amazon in the Google Ads auction is uniquely challenging. Amazon has deeper pockets than almost any competitor, so it outbids brands in the Google Ads auction for nearly every product category, helping its impression share reach record highs. Unlike other retailers, Amazon doesn’t tolerate shelf strategies, which allow brands to negotiate bids with retailers that distribute their products so that retailers don’t erode brands’ impression shares.
Although competing with Amazon in the Google Ads auction may, at times, feel hopeless, resourceful marketers can outexecute Amazon using these four strategies:
- Account for seasonality. Remember that Amazon’s dominance is seasonal. Amazon’s bids peak each year around Prime Day, Black Friday, and Cyber Monday. Don’t overspend during these periods. Instead, respond to seasonal spikes by focusing spend on high-margin products and on less competitive, long-tail keywords — specifically 3–5-word keywords — that signal strong purchase intent.
- Take advantage of Amazon’s scale. Amazon’s tremendous scale gives it an advantage but also limits its agility. To outexecute Amazon, marketers should nimbly adjust paid search strategies on the fly and embrace rigorous, always-on creative testing to learn how each variable within their ads performs. In addition, map content to queries to reverse-engineer better performance. For instance, learn which queries result in videos and test creative variables within their videos to make sure that their most compelling content appears on the Search Engine Results Page (SERP). Such engineering eliminates guesswork, arbitrary decision-making, and risk.
- Emphasize your brand’s distinctive values. As e-commerce becomes ubiquitous, many brands’ selling propositions get lost in a sea of sameness. But according to our Consumer Trust Imperative Survey, 2022, roughly four in 10 US consumers consider brands that express their values to be more trustworthy, and almost half want to learn about a brand’s values. Therefore, rather than emphasizing price or convenience, which are Amazon’s unique selling propositions, marketers should convey their brand’s distinctive values through advertising. To further align their brands with consumers, link consumers to review sites such as Trustpilot or G2, which, incidentally, deter reliance on Amazon’s reviews.
- Segment audiences based on loyalty. Marketers should define audiences based on their amount of loyalty to more effectively set budgets. For example, highly loyal, repeat customers are more likely to organically search for, rather than constantly rediscover, a given brand. For those audiences, minimize spend on branded keywords to prevent paid search from cannibalizing SEO’s efficacy. Focus spend on audiences most susceptible to Amazon — audiences comprised of consumers who are willing to test lower-cost brands if their preferred choice isn’t available — with content that conveys your brand’s distinctive values.
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