Yes, You Can Compete Against Amazon in Paid Search. And Even Win.

Posted by Jim on August 10, 2012 to

Just ask Target, Toys“R”Us, Victoria’s Secret & More

One of the most common questions we hear from AdGooroo clients engaged in paid search is ‘How are we doing compared to Amazon?’ followed by ‘Is there anything we can do to pull ahead?’ Not surprising, considering Amazon’s preeminence in the e-tail world and its reputation as a juggernaut in PPC.

As such, we decided to take a closer look at the online retail giant compared to its paid search competitors in a new research report, and the results were surprising.

Yes, Amazon’s brilliant business model, its massive spend on Google AdWords (nearly twice the amount as the next largest spending retailer—Target) and estimated portfolio of millions of keywords across all categories of merchandise make it a force to be reckoned with in the PPC arena. However, AdGooroo’s research into three categories outside of the e-tailer’s traditional strong suit (books, music and other media) found that Amazon is not always the dominant player in paid search.

Here’s a quick synopsis of the report’s findings:

Children’s Products
Despite sponsoring 12.7 percent of the highest PPC spend keywords in Children’s Products, Amazon was outperformed by advertisers with strong brand recognition, who garnered more desirable ad positioning (American Girl, Lego, Hasbro, Toys“R”Us and Children’s Place) and a much larger share of impressions on their chosen category keywords (Children’s Place – 81 percent; American Girl – 69 percent; Lego – 68 percent; Toys“R”Us – 50 percent). Even Target, whose offering and SEM strategy resemble Amazon’s more than the children-centric brands studied, garnered 52 percent of impressions on their category keywords compared to Amazon’s 31 percent.

Fashion and Apparel
Although Amazon again leads in the percentage of top PPC spend keywords sponsored (13.9 percent), its competitors in the category earned more favorable results. The top five SEM advertisers in the category based on ad position, Express, Victoria’s Secret, Bloomingdales, 6pm.com and Loft.com, together earned an average of more than 1,600 impressions per keyword per day on the terms that they sponsored compared to Amazon’s 349 impressions. Further, Amazon had the lowest ad coverage, the second lowest clickthrough rate, and the third highest cost-per-click. Although it trailed the pack in terms of average ad position, Target recorded higher clickthrough rates and a larger share of impressions than Amazon on the category keywords that it sponsored.

Auto Parts
Although not traditionally thought of as a provider of automobile parts and accessories, Amazon’s broad set of Auto Parts keywords, second only to AutoZone, demonstrated a concerted effort to compete in the category. However, its paid search performance compared unfavorably to its competitors, generating the highest CPC, the lowest average position and only a 13 percent share of impressions on the keywords that it chose to sponsor. AutoZone, O’Reilly Auto Parts and even Target appeared to be competing less with Amazon than with each other.

For complete details, as well as insights into strategies and tactics of the most successful PPC campaigns, download the full report here:
Beating Amazon in Paid Search – An AdGooroo Special Report