5 months ago, we compared Amazon Product Ads (APA) against Google Shopping. It was an analysis of 2 of the biggest names in the comparison shopping industry, with Google Shopping doubling its traffic from Q3 2012 and Amazon seeing a 57.5% increase in conversion rate from a year ago.

Historically, Amazon Products Ads is at home near the top of our comparison shopping report, but Q2 2013, this most recent quarter, tells a different story.

Amazon Product Ads From Q2 2012 to Q2 2013

This year, Amazon lost its position in almost every performance category. While the data may not be startling, it sure isn’t flattering.

Check out the table below, which highlights APA’s performance from Q2 2012 to our most recent quarter, Q2 2013:

 Amazon Product Ads Performance

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Traffic

1st

5th

5th

4th

4th

Revenue

3rd

3rd

3rd

2nd

3rd

Conversion Rate

4th; 1.7%

4th; 2.0%

1st; 2.8%

3rd; 2.7%

7th; 2.1%

Cost of Sale

5th; 26%

2nd; 16%

2nd; 16%

2nd; 15%

4th; 20.5%

*Note: Rankings are out of 10.

There are 2 takeaways from this table.

  1. Consistent Traffic and Revenue:  Amazon has seen relatively high, consistent performance in the traffic and revenue department. This means that merchants looking for increased site exposure can depend on APA to deliver just that. No doubt, it will be interesting to see if Amazon can continue this trend for another year to come.
  2. Decreasing Efficiency Metrics: Despite promising traffic and revenue rankings, raw conversion rate (CR) and cost of sale (COS) percentages are on the decline. Interestingly, APA is much improved in these categories when you compare Q2 2012 to Q2 2013. However, when you compare the span from Q3 2012 – Q1 2013, a period of considerable improvement and high performance, to our most recent quarter, you see a steep decline in CR and COS. Overall, you see a 22.22% decrease in CR and a 36.66% increase in COS from Q1 to Q2 2013.

What This Means For Retailers

It’s certainly possible that Amazon Product Ads’s traffic may be becoming less qualified. By this I mean that despite a lot of people continuing to go to Amazon to shop, less of these shoppers are actually going through with sales or having an intent to buy. This could account for the lower conversion rate and higher cost of sale.

Contrarily, an alternate analysis can be made by looking at Q2 2012 vs. Q2 2013. This highlights that the increased performance from Q3 2012 to Q1 2013 could be due to preparation pre- Holiday shopping season and the beneficial hangover that follows it in Q1. Merchants should note that from this time last year (Q2 2012 vs. Q2 2013), Amazon Product Ads increased its Q2 CR by 23.53% and decreased its Q2 COS by 21.15%.

Despite how the data plays out, our experience working with hundreds of retailers on many CSEs tells us that at the end of the day, Amazon Product Ads is still a lucrative shopping engine for most.

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