Amazon and Pinterest Challenge Google in Search Advertising

For years, Google dominated the search advertising market because two-thirds of all Internet searches are performed on the site. Now, Amazon is entering into the mix with new ad products that are competitively priced and bring consumers directly to the Amazon product pages. Pinterest also launched search ads last month that rely more heavily on images than Google’s text-based search ads. Advertisers believe players like Amazon and Pinterest could add much needed innovation. Both companies are trying to chip away at Google’s hold on the $37 billion market.

The competition could force the Internet companies to create better products and lower prices to lure advertising dollars. Currently, Google gets about 76 percent of the search ad spending in the U.S., compared to 8.3 percent for Microsoft and less than 1 percent for Amazon, reports The Wall Street Journal.

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That could change in the next few years as more users turn to Amazon for their online shopping needs. Amazon has spent the last year focusing on search ad sales. The company created “Product Display Ads” to show items related to a user’s search term. The ads have both a product image and text that link to the item’s Amazon page. Amazon has also began building some of the tools, like advanced ad-buying software and a digital dashboard, that advertisers expect.

Pinterest also launched new search ads on their site. Because they are not as in demand as Google, advertisers are getting steep discounts on Pinterest search ads. Pinterest also recently partnered with the ad buying platform Kenshoo, which helps huge retailers like Macy’s and Home Depot buy digital advertising.

The real question is whether marketers will make room for new players in the competition. Many already have sophisticated buying operations that don’t show signs of slowing growth. For example, 96 percent of all search-ad clicks on mobile devices during the fourth quarter were on Google search ads. Still, search engine marketing experts are preparing their clients for a new era in search ad buying.