While most of us were busy stuffing our faces over the festive period, Amazon was gearing up for 2017 by testing Product Listing Ads (PLAs) on AdWords. This marks the retailer’s first venture into PLAs and it could be a significant one if it goes ahead with the move.
The question on other retailers’ minds will be: what does this mean for us? A Google Shopping experience dominated by Amazon’s endless advertising budget is the last thing other retailers will want to see – but should they be worried?
What would Amazon PLAs mean for other retailers?
If Amazon goes ahead with running PLAs for the long-term, there’s no denying it will have an impact on other retailers. Over the last few years, retailers and marketers have been signing the praises of PLAs and how they outperform regular text ads. And it seems Amazon – who spends a serious amount of wedge on AdWords text ads – has been paying attention.
One of the biggest selling points of PLAs for retailers is they’ve been a relatively level playing field for smaller retailers. Google Shopping is a place where smaller brands can get their products seen by hungry shoppers and there aren’t many platforms that still make this possible.
The fear for smaller retailers will be that a Google Shopping experience dominated by Amazon PLAs will leave little space left for them. While there’s also the risk of Amazon’s endless advertising budget increasing the average cost of PLAs and pricing smaller retailers out of the race.
Will all of this happen? Not necessarily – but it’s easy to see why retailers are a touch nervous about the notion of Amazon PLAs.
What Would Amazon PLAs mean for Google?
Amazon already spends more on AdWords ads than any other brand, which puts Google in a funny position. Amazon is one of the search giant’s biggest rivals but also the biggest contributor to its main source of income – and will only be more true if Amazon goes ahead with PLAs.
If Amazon gives up on PLAs after a few weeks of testing, it’ll be little more than a few points scored for Google. The fact Amazon is even testing the ad format shows it’s intrigued by the notion but the big question is what happens if Amazon invests big in PLAs?
Google could be looking at a significant win in terms of ad revenue but it’ll be handing yet more business over to a rival. Amazon is already moving into the PPC and Google’s desire to become an online retail tool puts in direct competition with Amazon.
It doesn’t all necessarily come down to money, though. In terms of what users want from the Google Shopping experience, you have to say they would rather have Amazon listings included. And Google’s biggest victory could be creating a complete online shopping experience where users can truly browse a web full of PLAs without leaving Google.
Is it time to hit the panic button?
No, of course not. We don’t yet know if Amazon is serious about investing in PLAs on AdWords or what kind of categories it is most interested in. If the retail giant decides to go ahead with PLAs it will mean smaller retailers getting more strategic with their Google Shopping campaigns – just like we’ve had to do with regular AdWords text ads in the past.
So no need to panic (at least not yet) but we’ll all be keeping a keen eye on Amazon PLAs to see if they become a permanent fixture in Google Shopping.
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