Amazon Yanks Own Digital Advertising On Google As Rivalry Grows

Amazon Yanks Own Digital Advertising On Google As Rivalry Grows

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By REINHARDT KRAUSE, investors.com

 

E-commerce giant* Amazon.com* (AMZN) reportedly has cut advertising on search result pages of Alphabet's (GOOGL) Google as the two are facing up as rivals in the digital ad market along with fellow tech powerhouse Facebook (FB).

Amazon no longer bid for slots, known as product listing ads (PLAs) that appear when consumers shop online, said an AdAge report. Released late last week, the report discusses ads that appear at the top of search results.

Amazon's own advertising business has gained traction owing in part to its popular voice-activated Echo smart home speakers. Google is No. 2 in the digital home appliance market.

Amazon's ad revenue growth caught the attention of some analysts after it reported first-quarter earnings and revenue that blew past estimates.

"The advertising business is also starting to inflect," said Brent Thill, a Jefferies analyst in a report.

$20 Billion Coming

Daniel Salmon, analyst at BMO Capital Markets said in an April 27 report: "We now see the company generating around $9.5 billion in advertising revenue in 2018 and believe this business can reach nearly a $20 billion revenue run rate in (the fourth quarter of) 2019."

Facebook remains the top destination for digital advertisers on social and news feeds, but Amazon can carve its own niche, says Thill.

"Amazon's billions of touch points with the consumer have allowed it to optimize its supply chain, now they are applying this same data to help advertisers optimize spend for both a brand and conversion basis," he said in a March report. "Amazon's owned-and-operated inventory in product search will expand into other inventory sources such as video, digital in-store via Whole Foods, and other direct to consumer offerings over time."

Amazon was down fractionally to close at 1,601.54 on the stock market today. Google was up marginally to 1,106.60.