Google vs. Amazon Advertising: What's the Difference?

Isaak Roundy

October 16, 2020

For years Google Ads has been the flagship when it comes to paid search advertising. However, Amazon is quickly becoming a force to be reckoned with in its own right as its advertising capabilities continue to improve.

As a digital advertiser, marketing manager, or business owner you’ll likely be utilizing one or both of these platforms at some point in your career if you haven’t already. If you already have experience, you might be wondering if your knowledge of one platform will translate to the other.

The purpose of this article is not to persuade you that one platform is better than the other or to tell you which one should get the majority of your marketing and paid search advertising budget. Instead we’ll focus on the similarities and differences that you as an advertiser can expect to see when using either platform for the first time.


Ad types: Comparing Amazon to Google

Both Google and Amazon offer a variety of ad types each with their own unique advantages that can help you accomplish whatever advertising goals you may have.

Here are a few of the most common ad types used on each platform:

Amazon Google
Sponsored Products Search Ads
Sponsored Brands Shopping Ads
Sponsored Display Display Ads
DSP Video Ads (YouTube)

For the majority of this article we’ll focus on the similarities and differences between the two most commonly used ad types: Amazon’s Sponsored Products and Google’s Search Ads.


The ad auction, explained

Both Google and Amazon use an auction to determine which ads are eligible to appear when a search is performed and the cost an advertiser will pay for a click on their ad. The idea is the same but executed differently by each platform.

How Amazon’s ad auction works

Amazon uses a “second price auction” which means that instead of paying your bid amount when someone clicks your ad, you’ll pay an amount slightly higher than the second highest bid. So if you bid $2 and the next highest competitor’s bid was $1.50, you’ll pay $1.51 or an amount slightly higher than $1.50 for a click.

This is pretty straightforward, but it doesn’t mean you can simply win an ad placement 100% of the time by having the highest bid. Amazon also uses an algorithm to determine which ads are the most relevant to the search and eligible to display, but what that entails is a bit of mystery.

Here’s what we do know from Amazon: “Ads selected to compete in the auction must first have keywords that match the search and meet a minimum relevance criterion.”

How Google’s ad auction works

Google uses a similar model but is more transparent about how ad quality affects the auction process. Google uses a variety of signals and real-time data to determine Ad Rank, which is a measurement of the quality of your ad for a given search. Your bid amount, ad relevance and expected click-through rate, and even the user’s location and device are used to calculate Ad Rank.

It’s important to note that Ad Rank is factored in when calculating CPCs, so you don’t simply pay a slightly higher price than the next highest bid for a click. It’s possible to win a better ad placement and pay less per click than your competition if you have a high Ad Rank.

Learn more about Ad Rank here.

Keywords and targeting on Amazon vs. Google

Keyword targeting

Both Amazon and Google use keyword searches as the main way to target consumers. Both allow advertisers to utilize Exact, Phrase and Broad keyword match types—and definitions of both are virtually the same between the two advertisers.

Both also include close variants for exact match keywords, although Google is again more transparent when it comes to their definition of a close variant.

Product targeting

One of the unique benefits of Amazon Advertising is the ability to use products instead of keywords as targets for ads. Advertisers can target specific products, whole categories, or a list of products that you refine based on brand, star rating, and number of reviews.

Automatic targeting

Amazon again has a leg up on Google here with its unique automatic targeting capabilities. Advertisers can use automatic targeting for their Sponsored Products campaigns and let Amazon do keyword research for them.

With automatic targeting, Amazon matches ads with similar keywords and products. You can then view a list of search terms and products where your ad appeared, allowing you to gain valuable insight into what keywords and products you should use or avoid in your manual targeting campaigns.

Audience and demographic targeting

Google wins here, and it’s not even a close race. Google has a vast library of user data that advertisers can tap into to enhance their advertising campaigns. Data such as age, gender, household income, hobbies and interests, device, relationship status, and more can be used to target and exclude users from your campaigns.

You can also adjust bids by a set percentage for your audiences to be hyper-focused when it comes to keyword bidding. If you know that mothers between the age of 25-44 are more likely to buy your new running stroller, you can increase your bid for those demographics to ensure your ads are reaching your target audience as much as possible. Almost all of Google’s ad products allow you to utilize these capabilities, giving you quite a few options to play around with as you fine-tune your advertising strategy.

Amazon, however, only has similar targeting capabilities for DSP (Demand Side Platform), which is Amazon’s display network offering. Audience and demographic data is not supported by Sponsored Products, Sponsored Brands, or Sponsored Display campaigns.

Other Amazon vs. Google ad differences to consider

Conversion tracking

Conversion tracking is simple with Amazon: orders and revenue will automatically be tracked for any products you advertise.

Google Ads, on the other hand, requires you to create your own conversion actions for any event on your website that you want to track, whether it be a purchase or a lead form submission. This allows advertisers to track important events beyond just purchases, like when someone adds a product to their cart.

Conversion tracking setup can be a pain for first timers. Google offers thorough documentation to help you through it, and their customer support team can help you as well.

Automated bidding

Google Ads offers multiple fully automated bidding strategies that eliminate the tedious work that is bid optimization. When you use a bidding strategy like Target ROAS or Maximize Conversions, Google will automatically set keyword bids and make optimizations for you based on your goals and how your campaigns perform. This makes campaign management much more simple and eliminates the need to spend hours optimizing bids on a recurring basis.

Amazon does not offer fully-automated bidding strategies like Google, so you’ll need to manually set keyword bids yourself or use a software to manage bids for you, like Pattern’s Predict software. Amazon, however, does have two automated bid adjustment features that can dynamically increase and/or decrease bids for you based on the likelihood of a conversion.

Conclusion

Both Amazon Advertising and Google Ads are excellent advertising tools that can be an effective part of any online marketing strategy. While they certainly have their differences, they also share many similarities that make it easy to pick up one or the other, or even both if you’re just getting started with PPC advertising.

At Pattern we offer our advertising services to most brands at no additional cost. Find out more by contacting a Pattern representative here.

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Slowing Inflation is Music to Consumers’ Ears
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Slowing Inflation is Music to Consumers’ Ears

**Instrument Pricing Changes Tune Amid Record Inflation** Compared to 2022, consumers should expect to pay more for musical instruments, but the rate of inflation shows signs of slowing. **The backstory:** America’s most popular musical instruments saw a notable price increase in 2022 compared to 2021, but the rate of inflation eased in Q4 ’22. **Why it matters:** Slowing inflation within this product category could indicate economic pressures like increased demand, rising labor costs, and supply chain disruptions are easing across the consumer landscape. **What we’re seeing:** The average cost of musical instruments increased 7.5% from 2021 – 2022; however, when analyzing individual increases year over year, some instruments saw price increases as high as 21%. <iframe title="YOY Price Change for Instruments — 2022 vs. 2021" aria-label="Bar Chart" id="datawrapper-chart-02Lwk" src="https://datawrapper.dwcdn.net/02Lwk/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="379" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * Trombones experienced a 21.73% increase compared to 2021 * Trumpets +20.08% * Flutes +18.6% * Recorders +16.13% * Saxophones +13.63% * Clarinets +10.55% * Drums +5.41% * Ukuleles +5.17% **However:** Inflation among these same instruments was significantly less in Q4 ’22 compared to Q4 ’21. In some cases, prices decreased from Q4 ’21 – Q4 ‘22: <iframe title="Price Change for Instruments — Q4 2022 vs. Q4 2021" aria-label="Bar Chart" id="datawrapper-chart-6X6GZ" src="https://datawrapper.dwcdn.net/6X6GZ/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="379" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * Trombones +11.23% * Flutes +10.41% * Saxophones +5.94% * Clarinets +5.59% * Trumpets +3.10% * Recorders +2.85% * Drums -2.59% * Ukuleles -8.46% **Moreover:** Certain instruments saw inflation reverse in 2022. On average, prices for melodicas, guitars, and violas saw their prices decrease by 4.41%, 3.19%, and 0.97%, respectively. <iframe title="YOY Price Change for Instruments — 2022 vs. 2021" aria-label="Bar Chart" id="datawrapper-chart-0Tefk" src="https://datawrapper.dwcdn.net/0Tefk/3/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="259" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> **Diving Deeper:** Inflation was more significant when comparing Q4 ’21 to Q4 ’20 than when comparing Q4 ’22 to Q4 ’21, indicating a slowing down of price increases for consumers. <iframe title="YOY Q4 Price Change for Instruments — 2020 – 2022" aria-label="Stacked Bars" id="datawrapper-chart-p6iqt" src="https://datawrapper.dwcdn.net/p6iqt/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="206" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * In Q4 ’21, average prices for all instruments were up 8.89% compared to Q4 ’20. * When comparing Q4 ’22 to Q4 ’21, the average price for all instruments only increased by 2.65%. **The takeaway:** While consumers should expect to pay higher prices for instruments this year, overall inflation impact within this product category appears to be slowing down. With National Ukulele Day coming up on February 2, now is a great time for ecommerce brands to take advantage of slowing economic worries and reach new consumers. * Want Pattern’s data science team to power your brand with consumer insights like these? Contact us to [request more information](https://pattern.com/contact-us/) today.

Slowing Inflation? What Musical Instrument Pricing Tells Us
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Slowing Inflation? What Musical Instrument Pricing Tells Us

It’s safe to say consumers and brands alike are eager for a change to the pattern of rising inflation, steadily increasing in many ecommerce categories . Pattern’s internal team’s data scientists analysis of instrument pricing shows a glimmer of hope that inflation may be slowing, which would be great news for brands selling online.

At Pattern, we’re interested in and monitoring trends and news related to pricing since price is a key factor in a brand’s profitability (as explained in the Ecommerce Equation). When brands are able to optimize their price, conversions, and traffic, they can optimize their profitability. And profitability leads to better allocation of resources, better brand control, and gives leaders the ability to expand their presence to new markets worldwide.

YoY Instrument Pricing Increased at a Slower Pace

When analyzing the pricing changes of instruments from 2021 to 2022, our teams found that prices increased, but at a slower rate than from 2020 to 2021.

As shown below, the year over year Q4 changes show quite a lower rate of increase.

Inflation Improvements Raise Profitability

Because inflation impacts online shopping behaviors, lower inflation can lead to better overall profitability for brands. This idea, of course, is nuanced, but Pattern’s Ecommerce Equation can help illustrate the general principle.

When inflation rises, consumers change their spending habits. Shoppers spend more time researching products, forego premium, higher-priced brands, and buy more in bulk. Brands tend to see a loss of loyalty as they’re forced to raise prices.

Price is a key variable in the Ecommerce Equation: price x conversion x traffic = profitability. As inflation lowers, brands can expect better performance in all of these areas—more traffic as spending habits return to normal, higher conversion from returning customers, and price that better fits consumer demand. As inflation lowers and these variables stabilize, brands will see profitability increase.

Raise Your Profitability with Pattern

As an ecommerce accelerator, Pattern is obsessed with gathering data that helps our brand partners succeed. We’ve created best-in-class technology, models, and analytics to understand changes on the horizon and inform our decisions. With an incredible team of data obsessed Pattern employees, we see what makes the difference in truly great ecommerce performance and apply those learnings for brand partners. 

Ready to improve your profitability? Contact us here.

Inflation hits LEGO, but lighter than you’d suspect
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Inflation hits LEGO, but lighter than you’d suspect

**Some sets get more expensive, while others become cheaper** In June 2022, LEGO announced it would be increasing the prices of their sets. Ever since, consumers anticipated their favorite plastic construction toy prices to increase [by as much as 25%](https://9to5toys.com/2022/06/02/lego-officially-confirms-price-increases-coming-to-most-sets-later-this-fall/). **Why it matters:** Consumers are feeling the sting of inflation in all areas of their lives, from groceries and gas to entertainment. With LEGO Day right around the corner (January 28th), fans may wonder whether it’s a good time to purchase a set. **What we’re seeing:** While inflation continues to ravage the economy, consumers are seeing a small reprieve when it comes to the pricing of LEGO sets. Despite the anticipated 25% price increase, average prices among the top LEGO sets only increased by 4.7% year over year when comparing Q4 2022 to Q4 2021. <iframe title="YOY Price Change for All LEGO Sets – 2022 vs. 2021" aria-label="Interactive line chart" id="datawrapper-chart-3gn9L" src="https://datawrapper.dwcdn.net/3gn9L/3/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="393" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * During this same period, annual prices for some of the most popular LEGO sets were up as much as 23%. <iframe title="U.S. Price Change for LEGO Sets – Q4 22 vs. Q4 21" aria-label="Split Bars" id="datawrapper-chart-vh7B2" src="https://datawrapper.dwcdn.net/vh7B2/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="708" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> **Yes, but:** Prices of other popular sets were down by as much as -12% during this same period. Depending on the kit, consumers might actually find some popular LEGO sets have gotten less expensive since 2021: * LEGO Star Wars Imperial Probe Droid was down -6% in Q4 2022 vs. Q4 2021 * LEGO Creator Tuk Tuk was down -7% * LEGO Star Wars Ultimate Millennium Falcon was down -10% * LEGO Ideas Tree House Business Kit was down -12% **However:** Even for the sets that experienced a price decrease, the decrease was less significant in Q4 2022 as set prices increased across the board following the June 2022 announcement. <iframe title="YOY Price Change for Individual LEGO Sets – 2022 vs. 2021" aria-label="Interactive line chart" id="datawrapper-chart-KjSXz" src="https://datawrapper.dwcdn.net/KjSXz/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> **The takeaway:** While prices didn’t increase as much as consumers anticipated, inflation still had an effect on the cost of LEGO sets. As ecommerce brands prepare for increased demand ahead of LEGO Day, they could increase customer interest in all sets by promoting the sets that have seen a price decrease. * Pattern’s data science team analyzes consumer demand on Amazon to understand how economic forces impact pricing and shopping behavior. If you’re interested in using insights like these to propel your ecommerce strategy forward, [contact our team today. ](https://pattern.com/contact-us/)