Google, Battling Amazon, Sees Some Bright Spots in Holiday Shopping Data

For the past few years, Amazon has been eating into Google’s search dominance, as more people start shopping searches on Amazon.

But sales data from this holiday weekend finally offers some bright spots for Google in this uphill battle against Amazon.

First, data from e-commerce firm ChannelAdvisor shows that Google shopping ads — otherwise known as Product Listing Ads — drove 24.3 percent more sales in the five shopping days starting with Thanksgiving than they did last year. That growth rate is also slightly higher than the 24.1 percent figure that Amazon registered during the same five-day period. (The numbers are based on sales by retailers that use ChannelAdvisor’s software to sell products across various online marketplaces, such as Amazon and eBay. ChannelAdvisor clients registered about $6 billion combined in online sales in 2014.)

“It’s easy to paint the doomsday scenario for Google,” said Scot Wingo, ChannelAdvisor’s executive chairman. “But the interesting part of this is it shows Google still has a dog in the fight. It’s not game over.”

Google launched Product Listing Ads in 2010. These are the big ads accompanied by a product photo that appear at the top of Google when you search for an item. According to ChannelAdvisor data, as retailers spend more on PLAs, they spend less on Adwords, Google’s traditional text ads. Wingo said that ChannelAdvisor clients spend about 60 percent of their Google budgets on PLAs and 40 percent on text ads, and that PLAs have “absolutely” cannibalized text ad budgets among his clients.

The cost per click of a PLA is typically lower than that of a text ad, so in the short term the cannibalization might not be a great thing, according to Jason Hartley of 360i, an ad agency. But over time, those rates should rise as more retailers use the still relatively new service.

“I can’t imagine they’re too concerned, because eventually [retailers] won’t be able to ignore it,” and cost per click will rise as demand does, he said.

The second bright spot for Google involves mobile shopping numbers from this weekend. About half of the traffic ChannelAdvisor saw during the five-day period came from smartphones and almost a third (27 percent) of purchases happened that way. But only 2.19 percent of people who landed on a retailer’s mobile website actually completed a purchase, compared to 6.39 percent on desktop computers. That gap is a huge problem for retailers as a greater percentage of traffic to their sites comes from shoppers on mobile phones.

Enter Google’s “Buy” button. Google is currently beta testing a product that will let people buy a product directly from a search advertisement on smartphones. In theory, this should help conversion rates, because a shopper won’t have to take the extra step of clicking through to a retailer’s website to make a purchase while on a smartphone. So as long as Google can really prove Buy buttons deliver increased conversions, the low rates of this holiday season should help it make its sale pitch.

Correction: The story has been changed to more accurately reflect the fact that Wingo was referring to text ads being cannibalized, not all Adwords ads (which include PLAs).

This article originally appeared on Recode.net.

We have a request

Vox's journalism is free because we believe that everyone deserves to understand the world that they live in. That kind of knowledge helps create better citizens, neighbors, friends, parents, consumers and stewards of this planet. In short, understanding benefits everyone. You can join in on this mission by making a financial gift to Vox today. Reader support helps keep our work free, for everyone. Will you join us?

One-Time Monthly Annual

$95/year

$120/year

$250/year

$350/year

Other

$

Yes, I'll give $120/year

Yes, I'll give $120/year

We accept credit card, Apple Pay, and Google Pay. You can also contribute via