Amazon’s advertising business alerted Google and began to launch e-commerce search business

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Tencent technology news on September 30, 20 years of strategic change has finally made search giant Google catch up with e-commerce giant Amazon in the field of online retail advertising.
The change is part of Google’s broader reform to revive its e-commerce business during the pandemic. In the past year, Google has stopped requiring third-party businesses to list their product advertisements in shopping searches. It also stopped charging shopping commissions and worked with Shopify to simplify the search list of 1.7 million businesses.
Google is trying to protect its core search and advertising business from Amazon’s continued invasion and the ambitions of Wal Mart and other companies. These companies have begun to sell advertising as part of their e-commerce business. Although Google still dominates in search and digital advertising, Amazon’s absolute leadership in e-commerce has made it the starting point for about 53% of consumer goods searches in the United States. According to the data of emarketer, a market research company, while chasing these hits, advertisers have shifted some of the spending originally invested in Google to Amazon, promoted the latter’s share in search advertising sales to one-fifth of the market share, and reduced Google’s share from 61% in 2019 to 57% today.
In the first half of this year, Amazon’s advertising sales were $14.82 billion, a year-on-year increase of 82%. Although Google’s total advertising revenue is more than six times higher than Amazon’s, it has increased by less than 50% in the same period. According to former Google executives, Amazon’s instant ads advertising business has aroused vigilance within Google, prompting the company’s CEO Sundar Pichai to assure the alphabet board that revitalizing its flagging e-commerce efforts is a top priority. Pichai must solve the chaos created by Google itself. Former Google executives said the company had revised its e-commerce strategy at least four times in the past two decades and replaced five heads of e-commerce business within a decade.
Guru Hariharan, chief executive of online retail service provider commerceiq, said that in the field of e-commerce, “Google is almost like a living dead man. There are no consumers shopping through Google.”
According to executives and industry observers, Google’s current strategy reflects its attitude towards the smartphone market. Just as the company built the Android open source operating system as an alternative to Apple’s “walled garden”. Google executives developing around the iPhone ecosystem hope to become search solutions for direct consumer facing enterprises looking for new business outside Amazon’s shopping and distribution system.
“If you wake up in a few years, this is a very interesting world. There is only one place to buy things,” said Bill ready, President of Google commerce. In 2019, Pichai hired Reddy from PayPal to take charge of the company’s e-commerce business. Although an outsider, Reddy is familiar with the development history of Google’s e-commerce business.
In 2002, Google launched froogle, the company’s first online shopping website to rank products. Ten years later, it evolved into a Google shopping tag. In order to avoid listing out of stock, it provides merchants with shopping product list advertisements so that their products appear in the shopping search list. Former executives and industry observers said this increased Google’s revenue but reduced its ability to attract small businesses. The reduction in the number of products on the shelves has reduced its appeal to consumers, resulting in a significant reduction in search volume. At the same time, Amazon persuaded more clothing and consumer goods companies to shift advertising budgets from Google, said mudit jaju, global e-commerce director of wavemaker, a media agency. “Google is no longer the entrance for consumers,” Jia said.
Reddy tried to reverse these trends. He divided the shopping team into two groups: one group focused on consumers; The other group focuses on businesses. Former Google executives said they shortened the development cycle of new products from nine months to six weeks.
Last year, Google canceled the need to pay for advertising and provided a free product list. The company also negotiated cooperation with Shopify, which has become a check and balance force for Amazon by helping enterprises establish and manage online stores. Google has introduced a turnkey system on Shopify, allowing its customers to list products in shopping search and develop Google advertising campaigns for these products.
Randy Williams, founder of Shopify, said that tally & twin watch Co., a direct consumer watchmaker, has been difficult to list products on Google shopping website through Shopify for many years because it has to manually store all 200 watches sold. The cooperation between Shopify and Google introduces the technology of automatically importing product information from Shopify, and makes it possible to quickly create Google advertisements. “It used to be really bad,” Williams said. He said the reform pushed tally & twin watch Co. to transfer its advertising budget from Facebook. This year, the watchmaker spent $100000 on Google Advertising and received more than $400000 in sales from these promotions.
In the three months to the end of June, Google reported that advertising revenue increased by 69% to $50.44 billion, of which retail was the largest contributor. Google’s revenue growth coincided with the closure of retail stores during the pandemic. In addition, Apple’s new privacy restrictions on iPhones have prompted advertisers to shift their budgets from Facebook. “Google seized a lucky opportunity,” said Jia Ju of wavemaker, who recently transferred customers to the company’s advertising.

Google’s next change is to focus on consumers. Reddy said that the new visual search experience will guide users to enter “cut jacket” and enter a login page that looks more like Amazon shopping search – displaying rows of jacket images rather than text links currently provided by Google. Google said its testing of the format found that users like to be able to view brands and styles faster.
In the future, he hopes to add e-commerce to Google’s entire products, from search to maps to Youtube. Randy imagines that when people watch a YouTube video, someone is unpacking a new dress. The audience can click to buy the dress, or if they want to find clothes in the future, they can search on Google.
So far, Google’s work has hardly weakened Amazon’s dominance. According to Channel Advisor, an e-commerce consulting firm, Amazon’s product search share has increased by 1% to 54% in the past year. (compiled by Tencent technology / Wuji)