The Wall Street Journal, citing people familiar with the matter, reported WPP, the biggest ad buyer in the world, increased its ad spend at Amazon in 2018, spending $300 million for clients on Amazon search ads. Of that budget, The Wall Street Journal reported 75 percent came from money that was allocated for Google search ads. The ad spend on Amazon by WPP is up between $100 million and $150 million from how much it spent on Amazon in 2017. In 2018 WPP did spend around $3 billion on Google search ads, noted the report.
Omnicom Group, another ad agency, spends 20 percent to 30 percent of client budgets on Amazon search ads, with the majority of the money being moved away from Google search ads. All told for 2018, Omnicom spent $1.2 billion on search ads in the U.S. The report noted that the ad spend going Amazon’s way is still tiny compared to Google. Google accounted for 78 percent of the U.S. search ad market last year, raking in $44.2 billion. The Wall Street Journal cited eMarketer, the research firm, for that data.
The increased focus on the part of advertisers underscores a change happening among consumers. They are no longer checking with Google when searching for products and going direct to Amazon instead. “Consumers are no longer double hopping between Google and Amazon, they just go straight to Amazon,” said Scott Hagedorn, chief executive officer of Omnicom Media Group North America, the ad-buying division of Omnicom, in an interview with the WSJ. He said dollars going toward Amazon ads are from companies that sell products on the platform. What makes Amazon so attractive to product makers is that Amazon can tell advertisers if the ad resulted in a consumer purchasing a product on the platform.
At the same time that advertisers are sending more money Amazon’s way, the eCommerce giant is stepping up its focus on that area of the business. Amazon now offers ad opportunities beyond search. The paper noted marketers can purchase display ads, ads for live sports events and targeted ads that follow people around the internet. It is now the third largest venue for digital ads behind Google and Facebook, noted the report.