August 1, 2013: Although a flurry of recent research reports have mentioned that Amazon is spending on PLAs, we still haven’t seen any actual evidence on SERP pages. We’ve hunted and hunted, and even sent queries to some of the research firms about this but the firms haven’t responded, and we’ve yet to actually see an Amazon.com PLA listing “in the wild.”
So what’s going on? Amazon is of course a major PPC advertiser that spends about $55 million on Adwords every year. And PLA ads are – according to our own data and that published by other parties – generally good investments for e-tailers. Furthermore, AMZN did participate in PLAs back when they were free.
Why is AMZN a PLA no-show? Well, here are some hypotheses:
- AMZN sells lots of low-margin products whose low profits would be eaten up by advertising costs. PLA participants are required to put their entire product list online. Amazon sells everything from high-margin electronics to low-margin Q-tips. Advertising these low-margin items wouldn’t make sense for Amazon.
- AMZN product listings and PLAs are competing products. There may be a perception in the C-Suites of both Amazon and Google that PLAs are direct competition to Amazon’s own product listings, and that participating in PLAs would defeat the purpose.
- AMZN needs Google less than other e-commerce players. While some users may drift into the sitethrough search engines, Amazon has trained enough people to use it as a portal and a search engine in its own right.
- Infrastructure. Given how much that Amazon has invested in servers, telco and so on, management might not want to spend additional funds required to serve PLAs.
- PLA feed management may be too expensive. Amazon deals with literally billions of massed SKUs every day that constantly shift. Uploading feeds in a timely manner to Google might just be too taxing for them.
- AMZN might not want to share additional information with Google. Obviously, Google and Amazon are competitors in e-commerce, and sharing too much conversion and price data might be seen as a big mistake.
- Compliance. This hypothesis is a bit of a long shot. But if AMZN were to participate in PLAs, it might be seen by the FTC as anti-competitive, with Amazon and Google theoretically being able to collude to control ad and product pricing along various channels.
- Overwhelming power. If Amazon were to go into PLAs, it might entirely overwhelm and dominate Google’s PLA business. PLAs – unlike ordinary text ads, allow the same vendor to appear more than once on any given SERP.
- AMZN as CSE rival. An argument can be made that the Google PLA engine and Amazon’s internal search carry out the same functions. If this is the case, then Amazon not being present in PLAs makes absolute sense.
- AMZN doesn’t want to meet Google PLA requirements. It may be too labor and capital intensive for Amazon to manage the huge amount of PLA information that they would need to submit to Google. Further, with their own product ads on their own website, Amazon is beholden to no one.
Have you ever seen an Amazon PLA in the wild? We’d love to see a screen shot. Why do you think Amazon isn’t involved in PLAs? Please help us solve this mystery!
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