Google beefs up ecommerce to compete with Amazon for search revenue

Google continues to expand ecommerce opportunities within its search results in order to bolster revenues in response to Amazon’s advertising growth: The company announced that sellers who participate in the Buy on Google checkout experience will no longer have to pay a commission fee in the US, per a company release last week.

Net US ad revenue share, by company

Copyright © 2020 eMarketer Inc.


The prospect of no commission fees will likely entice brands to consider selling products directly on Google — as opposed to Amazon and Shopfiy, which are more costly — and more products sold via Google will give the platform’s search revenues a boost.

Google’s move comes as Amazon gains share in the search advertising market. Amazon’s key advantage over Google is the ability to sell search inventory closer to where consumers are making purchases, and over the past few years, Google has been slowly losing share to Amazon: We expect Amazon’s share of US search ad revenues to grow from 12.9% to 14.3% in 2020, while Google’s will fall from 73.1% to 71.1%. This lost share has likely received more attention from Google during the pandemic: Google’s net US digital ad revenue declined in absolute terms for the first time this year — falling 5.3% — according to our estimates. 

To reverse this trend, Google will need to convince both sellers and consumers to shift their commerce habits to Google’s search results. Google has the advantage in being the leading search engine, but displacing engrained consumer behavior is no easy task: Amazon remains the leading platform for ecommerce activity by a wide margin, accounting for over 30% of total retail ecommerce sales. It would likely take a significant amount of time for Google to convince brands to shift their ecommerce-oriented search budgets away from Amazon.

Want to read more stories like this one? Here’s how you can gain access:

  1. Join other Insider Intelligence clients who receive this Briefing, along with other Media, Advertising, & Marketing forecasts, briefings, charts, and research reports to their inboxes each day. >> Become a Client
  2. Explore related topics more in depth. >> Browse Our Coverage

Are you a current Insider Intelligence client? Log in here.

Source News