(By: 2019 New York Times News Service, news.abs-cbn.com)
For years, Google and Amazon stuck to their strengths. Google’s search monopoly and universe of online services seemed to present little overlap with Amazon’s web commerce empire.
But as the ambitions of each has expanded, it is becoming unavoidably, inescapably, clear that the technology giants are heading for a collision.
On Tuesday, at its annual Google Marketing Live conference, Google unveiled a list of new products meant to help it become a destination for shoppers and for marketers hoping to reach consumers considering spending decisions.
Google’s latest move into Amazon’s core business is playing out as the retail giant makes gains in what has traditionally been the search company’s home turf: digital advertising.
As online commerce has become synonymous with Amazon, shoppers are starting their product searches at the company’s website instead of Google’s — the traditional on-ramp to all things internet — and marketers are spending advertising money there.
In 2015, about 54 percent of product searches started on Google, and 46 percent started on Amazon. By 2018, the numbers had flipped, according to the marketing analytics firm Jumpstart.
“Both of these companies are arriving at the same conclusion from different points,” said Juozas Kaziukenas, founder of the Marketplace Pulse, a research company. “For Amazon, it makes sense because why wouldn’t they? They have all this traffic, and all this interest from brands.”
The two companies, which only competed on the fringes of their businesses for years, now have a range of overlapping interests.
Google Cloud is challenging Amazon Web Services in cloud computing. Amazon’s Twitch is becoming a popular alternative to Google’s YouTube for online video content. The Google Home and Amazon Echo are smart speaker vessels for competing intelligent assistants from the companies.
Google said on Tuesday that it planned to introduce a shopping feature that would allow people to make purchases directly from searches, images and YouTube videos. By clicking ads in those settings, a shopper would buy products through Google.
For users whose credit card and shipping information is stored with Google, which declined to say how many that is, the company would fill out that information to speed up checking out. Google said it wanted to make shoppers more comfortable buying from retailers that they may not be familiar with by serving as a middleman that guarantees a consistent return policy and customer service.
Google also said it planned to introduce new “Discovery” ads in YouTube, its Discover news feed and Gmail later this year. The goal is to target audiences across different Google properties using what Google knows about users based on their online searches, the videos they watch on YouTube, the websites they browse and the apps they download.
“We’re making more of Google shoppable,” said Brad Bender, the vice president of product management for the company’s ads division.
Google has made other efforts to slow Amazon in e-commerce, with little success. It started a shopping service in 2013, initially offering free same-day delivery before scrapping it. It also tried grocery delivery but gave up on that, too.
More recently, Google has become an online shopping mall of sorts, featuring more than 1,000 retailers, including Best Buy, Costco and Target. As part of its new shopping push, Google said it would create a shopping home page that was personalized for users.
Google is adding new advertising and shopping products as it tries to quell concerns that its revenue growth has started to decelerate.
Last month, Google’s parent company, Alphabet, announced quarterly results that fell short of Wall Street expectations, dragging down its share price. One concern raised by analysts was that ads on sites like Google and YouTube grew 39%, below the increases of 50 percent to 60 percent in recent quarters.
Even as Amazon has become a giant in online sales, only recently has it had an advertising awakening. Many analysts see advertising as a rising third pillar of the business, along with the company’s retail sales and cloud computing services. In an analysis released Tuesday, Morgan Stanley estimated that Amazon’s ad business was worth about $85 billion.
The company has been building more tools for brands to place ads on and off its website, and it has also added more space for ads when people search for products. Amazon’s “other” business segment, which it says is primarily ads, brought in $10.8 billion in the past 12 months.
People may turn to Google to research their interests, but “Amazon is about buying actual goods,” said Brian Wieser, who analyzes media for GroupM, which directs more than $48 billion in ads each year on behalf of brands. “You are actually doing, not just intending to do, which is why it’s viewed as being so much more useful.”
The core of Amazon’s ad offerings are “sponsored product” listings, which direct shoppers to specific items based on the keywords they searched. The top of most search pages also now have rectangular banner ads, called sponsored brands, that point shoppers to a company’s page or to particular items.
Amazon has also quietly been building tools to help brands show video and display ads to consumers on other websites based on the rich data they have on their customers. For example, someone using a credit card from one bank to pay for their Amazon purchases may see ads for another bank’s cards when they are reading the news online.
Google’s latest move lets the company sell ads and services that are more closely tied to actual transactions, which they can charge more for.
Kaziukenas said that for now, Google’s plans were “not a risk at all” for Amazon. The reason, he said, is that Amazon has a large advantage over other retailers after more than a decade of building out the infrastructure to ship items quickly and reliably, while Google is depending on merchants to fulfill orders on their own.
“Google historically has tried to not do things in the physical world,” Kaziukenas said. “Obviously for them that has been very profitable.”
The article is first published HERE on May 15, 2019.