August 8, 2012, 3:15 PM

Retail rivals take on Amazon in paid search—and win

The retail giant isn’t to be ignored, but it has real competition, AdGooroo says.

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Amazon Inc., No. 1 in the Internet Retailer Top 500, doesn’t always have complete search marketing domination. In at least three categories of e-retail keywords—children’s products, fashion and apparel, and auto parts—smaller merchants turned up higher in search results than Amazon, according to a new study from AdGooroo.

The digital marketing analysis firm tracks and studies the paid search, display advertising and search engine optimization campaigns of online advertisers worldwide. The company monitored Google Inc.’s search engine results for thousands of keywords in the children’s products, fashion and apparel, and auto parts categories for the last six months of 2011. In each, it found retailers that beat Amazon for top listings.

Amazon has a substantially higher Google AdWords spend than any other retailer, estimated at nearly $15 million per month in the second half of 2011, according to AdGooroo; the report says Amazon’s spend is more than twice that of Target, the next highest spender in the study. And in the categories from which the behemoth initially grew its business—books and other media—it’s hard to surpass for prime spots in paid search results. “Pick a book title. If you search on that, Amazon is going to be in the top two or three ads,” says Gregg Hamilton, senior vice president of research at AdGooroo and lead author of the study. “And a lot of book titles don’t look like book titles, they’re just a phrase. That I found stunning. They must have an army of people working on keeping their campaigns current.”

Yet the retailer’s broad offerings could mean its keyword management is spread too thin to take search marketing gold in every category, Hamilton says. That’s where other retailers with strong brand recognition gain the edge.

For example, in the children’s products category, Toys ‘R’ Us, Lego, American Girl, Hasbro and The Children’s Place all garnered higher search spots than the No. 1 Internet retailer, appearing on average first to last in that order. AdGooroo says Amazon accounts for 12.7% of spending on the roughly 13,000 related keywords in the category.

Moreover, all of those retailers plus Target brought in more impressions than Amazon. An ad impression occurs each time a web page loads an ad—for example when a consumer searches for “doll” and Google serves up an American Girl ad in its results. The search engine’s algorithms determine which ads appear based on factors including how often the ad is clicked—that enables the search engine to make money—and its relevancy to a consumer’s search. With children’s products, Amazon ads appeared only 31% of the time in related keyword searches, while Toys ‘R’ Us Inc. impressions were at 50%; Lego, 68%; American Girl, 68%; Hasbro, 69%; The Children’s Place, 81% and Target, 52%.

In the fashion and apparel category, the top five advertisers not only all beat Amazon but together on average drew 1,600 impressions per keyword versus Amazon’s 349. In order of highest search position, plus their share of impressions, those retailers were: Victoria’s Secret, 78%; 6pm.com, 70%; Loft.com, 72%; Express.com, 56%; Bloomingdales, 54%;  The percentages refer to the number of times a retailer’s ad would appear as a result of a search using associated product keywords. Amazon in sixth place garnered just 23% of impressions. This category was another in which Amazon also had the highest estimated advertising spend on keywords, paying for 13.9% of the roughly 2,000 keywords tracked.  

AdGooroo also analyzed search advertising for online retailers of auto parts. The top search results for auto parts keywords went, in order, to O’Reilly Autoparts, with its share of impressions at 65%; Pep Boys, 50%; AutoZone, 42%; Parts Geek, 40%; Target, 33% and Amazon, 13%.

“Our report shows that even with this impressive spending and results, Amazon is certainly not infallible across the board,” says AdGooroo’s CEO Rich Stokes. “The breadth of Amazon’s pay-per-click campaigns is certainly impressive, but when analyzed in categories where it lacks recognition or authority, their search engine marketing efforts fail to live up to some of their most skilled competitors.”

Amazon did not immediately respond to a request for comments.

The retailers compared to Amazon that are listed in the Internet Retailer Top 500 and their rankings are: Toys ‘R’ Us Inc., No. 29; Lego Brand Retail Inc., No. 132; American Girl LLC, No. 115; The Children’s Place Retail Stores Inc., No. 111; Target Corp., No. 23; Express Inc., No. 102; Victoria’s Secret Direct & Bath and Body Works, No. 19; Macy’s Inc. (parent of Bloomingdales), No. 14; Ann Inc. (parent of Loft), No. 92 and AutoZone Inc., No. 121.

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