Amazon is eating into Google’s dominance in search ads

Amazon CEO Jeff Bezos

Photo: Andrew Harrer/Bloomberg via Getty Images

Google still holds the lion’s share of search ad revenue in the U.S., but Amazon is expected to chip away at that dominance over the next few years, according to a new eMarketer forecast.

The U.S. search ad market is expected to grow nearly 18% this year to reach $55.17 billion. Google holds a 73.1% share of that, equaling $40.3 billion, eMarketer said. Meanwhile, Amazon is expected to grow nearly 30% over last year to reach $7.09 billion in 2019, reaching 12.9% of market share. Amazon’s share is expected to grow to 15.9% by 2021, with Google’s expected to contract slightly to 70.5% of the market.

Google and Amazon are among the tech giants receiving antitrust scrutiny in the U.S. Google, for instance, has drawn criticism for its entry into the travel bookings and job search areas.

Amazon last year passed Microsoft to become the second-largest ad platform for search in the U.S., according to eMarketer. After Google and Amazon, Microsoft, Verizon Media and Yelp hold smaller pieces of the search ad revenue in the U.S. In 2019, Microsoft has 6.5%, Verizon Media has 2% and Yelp has 1.8%.

Top 5 companies in the U.S. ranked by search ad revenue

CNBC

Amazon’s advertising business has seen big growth in recent years. Sellers can bid on particular terms so they show up higher on users’ search results, which make it so that brands can reach people right as they’re ready to pull the trigger on a purchase.

Last year, the company’s advertising functions simplified their branding and came together as “Amazon Advertising,” and has since continued to beef up the offerings. The company agreed to buy an ad server and a dynamic creative optimization unit from Sizmek in May, which will help advertisers place ads and measure effectiveness and aid in personalizing ads using data.

In early October, the company held an event called “AdCon” to showcase Amazon’s growing list of ad products. The event drew about 400 people in Seattle, CNBC reported.

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