How Google Is Going To Hurt Amazon During The Busiest Shopping Season Of The Year
The holiday shopping season seems to start earlier every year: Google says more than half of consumers will start making their holiday purchases before Thanksgiving.
This year, it's trying to make it even easier for shoppers to get quick product information and price comparisons by expanding the format of its visual product listing ads (PLAs).
You've likely noticed Google's PLAs before if you searched online for a product:
The company launched PLAs in late 2012 and they've been a big success for the Google as more and more companies decide to buy the visual ads.
Now, in time for the holiday shopping rush, Google's going to start rolling out some changes to make its PLAs more useful to shoppers. When you search for a broad category, like "tote handbag," Google will start letting you click into a "virtual showroom" where you can check out even more different brands and models with pricing information. It will look a little like Google images, but with a bunch of products.
Finally, if you search for something like "best tablets," Google will start showing you a visual ranking you can scroll through based on customer reviews pulled from other sites.
These tweaks will be great for Google, which can sell more ads, and will likely be good news for shoppers, because it will let them do a little easy research before they buy something.
It's bad news, however, for Amazon.
So far, Amazon has refused to buy Google's PLAs (and a recent report by analysts at Jefferies Equity Research shows that even Amazon subsidiaries, like Zappos or Diapers.com, have cut back). That means that you won't see products from Amazon showing up in Google's new photo grids and you won't see it listed as a buying option for specific products.
Google's ads push Amazon's naturally high-ranked search results farther down the page. Even when Amazon does pay for an ad (like it did in the hydroflask example above), it still now has to compete with the bigger, much more eye-catching PLAs. The further down the page a link is, the less likely anyone will click on it.
A way Amazon would like to avoid this problem is by having more people start their searches directly on Amazon.com. However, the more Amazon-like features that Google offers through PLAs - like product descriptions and reviews - the less likely people will be to intuitively start there, unless they're already loyal Amazon users.
By making these tweaks to its PLA format, Google is essentially delving Amazon a big blow right before the busiest shopping season of the year.
Business Insider reached out to Amazon for comment, and will update when we hear back.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.
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