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 percent, below the increases of 50 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. Morgan Stanley estimates that Amazon’s ad business is worth $125 billion, more than Nike or Starbucks.
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.