Amazon has cut spending on Google Ads to virtually nothing. Current events are the large reason why. Covid-19 buying trends show deep changes that may impact Google Ads, affiliate earnings and publisher advertising earnings. Knowing what is happening may help you get through this stormy moment.
According to a report by digital marketing solutions provider tinuiti, Amazon has been gradually reducing their Google Ads spend since the end of January and as of March 11, Amazon has almost turned off it’s advertising altogether.
Why is Amazon Virtually Cancelling Google Ads?
It appears that Amazon may be responding to changing trends in consumer spending due to the Covid-19 pandemic.
According to an article in Buzzfeed News, Amazon has reported a surge in buying that has necessitated hiring an additional 100,000 workers to meet the demand.
As reported by Buzzfeed:
“As Americans retreat to their homes to weather the coronavirus pandemic, they are increasingly turning to Amazon to get basic necessities such as groceries, as well as medicines, cleaning supplies, and, of course, toilet paper.”
Amazon is turning its focus toward meeting the demand of citizens who are “sheltering in place.” To shelter in place means to stay in ones home and not leave except for basic necessities like food and other home supplies.
Yet fear of contracting COVID-19 has consumers wary of leaving their homes so they are turning to Amazon.
According to the report by tinuiti:
“Amazon seemed to abruptly change course towards the end of January 2020 across many product categories and was less prevalent through the first week of March.
Further, Amazon appears to have also essentially turned off all of its text ads after March 11, and while it maintains a very light text ad impression share against some advertisers in a scattering of categories, it has vanished altogether for many.”
Profound Change in Search Trends
What is happening is that online sales is undergoing an extreme change in buying trends. Demand for household items and medical supplies are spiking to an extraordinary degree. The change is so dramatic that Amazon is hiring 100,000 new workers in order to meet the demand.
The following Google Trends graph illustrates the dramatic change in search trends. Considered together with Amazon’s decision to ship only essential goods, these both may be signals of a profound change in consumer buying trends for the next few months.
Yoga mats and Apple Air Pods are listed by Amazon as among the most popular products for sale on Amazon within their respective categories.
But as you can see in this Google Trends graph, demand for toilet paper has dwarfed that of yoga mats and Air Pods.
Amazon Focuses on Medical Supplies and Household Staples
According to a report on Search Engine Journal, Fulfillment By Amazon shipments have stopped except for household and medical supplies that consumers need.
Amazon’s statement noted:
“We are seeing increased online shopping and as a result some products such as household staples and medical supplies are out of stock.
With this in mind, we are temporarily prioritizing household staples, medical supplies and other high-demand products coming into our fulfillment centers so that we can more quickly receive, restock, and ship these products to customers.
For products other than these, we have temporarily disabled shipment creation. We are taking a similar approach with retail vendors.”
According to Amazon, this change in focus will continue through at least April 5, 2020. That’s a little more than two weeks. The CDC has ordered a ban on crowds of 50 or more people for eight weeks. Some communities have banned gatherings of as few as ten people in one place.
Amazons dramatic pivot away from Google Ads may be a sign that online sales of non-essential consumer products may begin to trend downward as medical and household supplies rise in demand.
While this may help reduce pressure on advertising costs for products outside of medical and household staples, what good are lower priced advertising if nobody is buying?
It’s also possible that these trends may affect affiliate marketing. It will be hard to make an affiliate sale through Amazon if Amazon is not shipping the high margin products popular with affiliate marketers.
The CDC has restricted public gatherings for the next eight weeks. The buying trends created by those kinds of restrictions may affect both affiliate and advertising sales income for publishers, as well as Google Ads.
Read the report on Amazon virtually cancelling Google Ads by tinuiti