[Report] How Amazon Dominates the Competitive Search Landscape

Pat Hong Posted by Pat Hong

AmazonBox

After threatening to explode into the Australian retail landscape in time for Black Friday, Amazon has finally launched in Australia. Adthena’s latest report explores the impact they will soon be making in Australian online retail.

To quote Adthena’s CEO, Ian O’Rourke, Amazon entering the Australian market will begin the “biggest disruption to a digital marketplace that we’ve seen in decades”. Analysts have focused on how this will impact regional revenues: UBS forecast that the tech giant will be doing AU$3.5bn in revenue by 2023 when the market is fully established, and Morgan Stanley predict that Amazon will be winning AU$12bn in the region by 2026. Unsurprisingly, regional retailers such as JB HiFi, Harvey Norman, and Myer, are expected to lose out as a result.

These numbers give us an idea of what Amazon will do. A lesser explored idea is how Amazon will reach these huge numbers?

What will be the fuel for Amazon’s rapid growth?

This is where Adthena’s unique competitive intelligence data and expertise is able to provide some insight. By studying their online performance in established markets such as the US and UK, we can begin to build a picture of how Amazon will be focusing their paid search investment to drive growth in the region.

Read the insights in full:

Download the Report

How do Amazon dominate the competitive search landscape?

Our research revealed one astonishing stat: across the entire US consumer electronics market, Amazon’s 15.35% share of adspend wins them 49.65% of the share of clicks (Desktop, Nov-Oct ’17). This is on the back of significant clickshare on branded search terms (such as ‘amazon’, and including terms such as ‘kindle’, ‘amazon prime’, and ‘fire tv’).

So what would the Australian CE vertical look like if Amazon replicate this success?

Amazon_AU

By any comparison, that is a massive disruption to a retail vertical.

Even for a company as large and powerful as Amazon, that kind of success can’t be built overnight. Our research revealed that there are three main ways Amazon will architect their search campaigns in order to hit these numbers.

  1. The range and expansiveness of the search terms that they advertise on.
  2. Consistency in average positions of their top ads.
  3. The frequency of their top ads.

“Amazon is winning the search wars for three reasons. They are running campaigns against more search terms than their competitors, have high consistency in SERP ads, and are the most frequent advertiser in major verticals.”

– Ashley Fletcher, Director of Product Marketing, Adthena

How should retailers respond?

In order to win in a period of such extreme disruption, retailers will need to embrace big data and competitive intelligence. When any new competitor enters a marketplace, testing, aggressive bidding, and brand and keyword infringement are likely to increase across the landscape. Competitive intelligence enables retailers to monitor changes, keep on top of them, and beat competitors to new opportunities as budgets are reallocated and campaigns are adjusted.


Featured in the report:

Included below are the interactive graphs included in the report. They visualize the extent to which Amazon have built a commanding grasp on the search landscape.

1. Range and expansiveness of search terms

Amazon advertise on over 30k search terms. As you can see, this directly influences the number of impressions they win over competitors such as Walmart and Bestbuy.

Amazon advertise on over 55k search terms in this sector, which is more than double that of their closest competitors.

The coloured dots represent unique search terms that an advertiser is advertising on but their competitors are not. The large amounts of blue dots represent the search terms that only Amazon is advertising on. The even spread indicates that in this segment at least, the search terms that Amazon advertise on have a range of CPC values.

2. Consistent positions in the SERP

The graph above shows how each competitor’s search terms relate to ads with a top 3 ranking position. High average positions which are combined with a large number of search terms is a recipe for strong search performance.

In this vertical, Amazon appear to blow the competition out of the water by the number of position 1 ad rankings they command.

3. High ad frequency

Drilling down in more detail for a randomly selected segment which won 10-80k estimated impressions, reveals consistent performance across a variety of ads. For ads winning 80k+ monthly impressions their ads performed  better comparatively than their competitors.


If you have any questions about this report, or would like to find out more about Adthena’s unique competitive intelligence solution, send us a message at hello@adthena.com.

About the author

Pat Hong
Pat Hong

Pat is the Digital Content Strategist at Adthena. He works on Adthena’s content projects, covering adtech news, trends, and insights. He studied Film and Television at the University of West London.