Amazon’s fortunes in the online advertising market continue to rise. The retail giant is the No. 2 destination for sponsored search ad dollars—albeit a distant second place behind Google.
Almost three-quarters (73.1%) of U.S. search ad dollars are spent with Google, which is on course to pocket $40.3 billion in revenue from such activity this year. However, that figure will drop to 70.5% by 2021, according to a forecast by market research company eMarketer.
The eMarketer report also cites polling that suggests most product searches—different from search queries, in the opinion of marketers—now take place on Amazon when explaining its predicted rise. By the end of 2019, the firm expects Amazon’s search business to grow nearly 30% over last year, pushing net search revenues to $7.09 billion.
Additionally, eMarketer also noted that Amazon was the only company in the sector whose share of the search advertising market will continue to rise from its current level (12.9% in 2019) to 15.9% by the close of 2021, which will generate $11.7 billion.
“Amazon’s ad business has attracted massive increases in spending because advertisers can reach consumers during product queries, a time when they’re ready to buy,” said Nicole Perrin, principal analyst at eMarketer. “Amazon has also rolled out better measurement and targeting tools, making it even more attractive for advertisers.”
Amazon surpassed Microsoft—which is on track to command a 6.5% share of the paid-search market in 2019—to become the second-largest platform for search advertisers last year. This summer, Amazon bolstered its tech wares by purchasing the Sizmek ad server.
Although Amazon’s advertising business is currently a great degree smaller than that of Facebook or Google—also known as the duopoly—some in the industry are already speaking of a looming “triopoly” that advertisers will have to navigate.
“Today, marketers align their investments in the duopoly to specific stages in the customer lifecycle,” according to a recent report from research outfit Forrester.
“But 2020 will be the year for marketers to stop thinking of Amazon’s search ad product and demand-side platform as separate from their search marketing or programmatic advertising strategies.”