Google Shopping Tops Amazon Product Ads: 32.7% More Cost Effective

Feb 20, 2013 at 2:11pm ET by Ginny Marvin

A new report from CPC Strategy looks at how Google Shopping fared against its rival, Amazon Product Ads, after making the switch to a commercial model in Q3 last year. The analysis finds its performance changed significantly compared to Amazon Product Ads, and provides further evidence that the move bolstered Google Shopping.

Surge In Traffic & Lower CPCs

In the second half of last year, Google Shopping sent 120% more traffic to merchants than Amazon Product Ads. In fact, Google Shopping more than doubled the amount of traffic it sent to merchants compared to 2011.

At $0.31, Google Shopping’s average cost-per-click was 32.5% lower than Amazon Product Ads cost-per-click of $0.41 in Q4.

More Cost Effective

In addition to seeing lower CPCs, advertisers’ cost-per-sale on Google Shopping was 32.7% lower than on Amazon Product Ads in Q3 and Q4. The chart below highlights the increased cost-effectiveness of Google Shopping in the 4th quarter.

CPC Strategy cites Google Shopping’s lack of minimum CPC bid requirements and more sophisticated campaign management tools as contributing factors for yielding higher profits for merchants.

Sign Of Weakness: Declining Conversion Rate

However, the study’s findings on conversion rates point to a potential Achilles’ heel for Google Shopping. Google Shopping has seen its conversion rate decline for 4 straight quarters. In contrast, Amazon Product Ads conversion rate has been rising since Q2 and surpassed Google Shopping in the fourth quarter for the first time in a year.

CPC Strategy notes that major changes made to the Google Shopping algorithm to allow bids to impact ad serving could be a contributing factor to the conversion-rate drop. And, Amazon Product Ads benefited from Amazon’s ongoing efforts to boost its reputation and trust among consumers.

For now, Google Shopping’s significant lead in traffic volume and lower CPCs helped give it an edge over Amazon Product Ads. It will be interesting to watch conversion rate and CPC trends as Google Shopping adoption rates mature.

The study looked at more than 6 million clicks, $2.4 million in ad spend and $14.6 million in revenue from more than 200 advertisers.

About The Author: Ginny Marvin writes about paid online marketing topics including paid search, paid social, display and retargeting. Beyond Search Engine Land, Ginny provides search marketing and demand generation advice for ecommerce companies. She can be found on Twitter as @ginnymarvin. See more articles by Ginny Marvin

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ScottyMack

I never put any trust at all in fourth quarter numbers. People desperate to get any gift as quickly as possible for Christmas presents skew the numbers greatly in December. The Google decline in conversion rates makes sense as more and more merchants are finally realizing that whining about having to pay doesn’t get them any sales and the competition has increased from just a handful of sites paying for Product Listing Ads to dozens in each niche. More selection for the consumer means they are exposed to the competition who will inevitably capture some of the sales/leads.
http://www.facebook.com/ric.sansand Ric Sansand

This is crap because advertising ROI is flawed by its measurement and if you factor in loyalty to Amazon from repeat buyers like myself, Google cant really compete.

I buy from Amazon a dozen times a year and have never bought via Google once. point made!