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

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.

Cost Per Sale Google Shopping vs Amazon Product Ads

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.

Conversion Rate Google Shopping vs Amazon Product Ads

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.

Related Topics: Channel: SEM | Google: AdWords | Google: AdWords: Product Listing Ads | Search Marketing: Shopping Search Marketing | SEM Industry: Stats | Top News

Sponsored


About The Author: 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.

Connect with the author via: Email | Twitter



SearchCap:

Get all the top search stories emailed daily!  

Share

Other ways to share:
 

Read before commenting! We welcome constructive comments and allow any that meet our common sense criteria. This means being respectful and polite to others. It means providing helpful information that contributes to a story or discussion. It means leaving links only that substantially add further to a discussion. Comments using foul language, being disrespectful to others or otherwise violating what we believe are common sense standards of discussion will be deleted. Comments may also be removed if they are posted from anonymous accounts. You can read more about our comments policy here.
  • 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!

Get Our News, Everywhere!

Daily Email:

Follow Search Engine Land on Twitter @sengineland Like Search Engine Land on Facebook Follow Search Engine Land on Google+ Get the Search Engine Land Feed Connect with Search Engine Land on LinkedIn Check out our Tumblr! See us on Pinterest

 
 

Click to watch SMX conference video

Join us at one of our SMX or MarTech events:

United States

Europe

Australia & China

Learn more about: SMX | MarTech


Free Daily Search News Recap!

SearchCap is a once-per-day newsletter update - sign up below and get the news delivered to you!

 


 

Search Engine Land Periodic Table of SEO Success Factors

Get Your Copy
Read The Full SEO Guide