A new report from CPC Strategy looks at how Google Shopping fared against its rival, Amazon Product Ads, after making the switch to a commercial model in Q3 last year. The analysis finds its performance changed significantly compared to Amazon Product Ads, and further evidence that the move bolstered Google Shopping.
Surge in Traffic & Lower CPCs
In the second half of last year, Google Shopping sent 120% more traffic to merchants than Amazon Product Ads. In fact, Google Shopping more than doubled the amount of traffic it sent to merchants compared to 2011.
At $0.31, Google Shopping’s average cost per click was 32.5% lower than Amazon Product Ads cost per click of $0.41 in Q4.
More Cost Effective
In addition to seeing lower CPCs, advertisers’ cost per sale on Google Shopping was 32.7% lower than on Amazon Product Ads in Q3 and Q4. The chart below highlights the increased cost effectiveness of Google Shopping in the 4th quarter.
CPC Strategy sites Google Shopping’s lack of minimum CPC bid requirements and more sophisticated campaign management tools as contributing factors for yielding higher profits for merchants.
Sign of Weakness: Declining Conversion Rate
However, the study’s findings on conversion rate point to a potential Achilles’ heel for Google Shopping. Google Shopping has seen its conversion rate decline for 4 straight quarters. In contrast, Amazon Product Ads conversion rate has been rising since Q2 and surpassed Google Shopping in the fourth quarter for the first time in a year.
CPC Strategy notes that major changes made to the Google Shopping algorithm to allow bids to impact ad serving could be a contributing factor to the conversion rate drop. While Amazon Product Ads benefited from Amazon’s ongoing efforts to boost its reputation and trust among consumers.
For now, Google Shopping’s significant lead in traffic volume and lower CPCs helped give it an edge over Amazon Product Ads. It will be interesting to watch conversion rate and CPC trends as Google Shopping adoption rates mature.
The study looked at more than 6 million clicks, $2.4 million in ad spend and $14.6 million in revenue from more than 200 advertisers.
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