According to Amazon’s latest announcement, Amazon Product Ads will no longer be available as of October 31st.
Historically, Amazon Product Ads served as a profitable avenue for sellers who could not market their products successfully on Amazon due to budget or category restrictions.
Product Ads allow retailers to advertise on the Amazon Marketplace without having to actually sell their products on the marketplace itself – by linking to external websites.
Although sellers will have access to Product Ads’ reporting through December 31st, Amazon is encouraging retailers to invest in their Marketplace and Sponsored Products program.
Although disruptive, the discontinuation of Amazon Product Ads does not come as a total shock.
For years, Amazon has refused to list on Google Shopping in an attempt to convince customers to invest in the Marketplace. Since the launch of Google Product Listing Ads (PLAs), CSEs have experienced a decline.
Amazon initially found success through their Product Ads program thanks to their large database with millions of customers, an element unfortunately many traditional CSEs cannot leverage.
Reaction to the announcement varies depending on the seller involved.
For some, the announcement is fairly lackluster as it resembles the termination of another CSE. For others, the discontinuation is a detrimental loss to their PPC marketing efforts.
According to Amazon, “If you are not already an Amazon Seller and you are interested in selling your products on Amazon, we encourage you to consider selling on Amazon, with the opportunity to advertise using Sponsored Products. If driving traffic to your own website is important to your business, we would like to introduce you to Amazon Text Ads, our newest Pay-Per-Click (PPC) advertising solution that enables you to run text ads on Amazon.”
Last year, the The Wall Street Journal announced that Amazon was planning to replace their third party ads with Amazon Text Ads. The newer program leverages the same interface (Seller Central) used by Amazon Product Ads. The program also offers similar content including daily budgets, campaign scheduling, keywords (keyword match) and is CPC based.
Unfortunately, Amazon Text Ads (ATA) has experienced fairly low volume to date and there is no guarantee when the program fully ramps up it will drive the same amount of traffic or revenue.
From Amazon’s perspective, the decision to discontinue the program makes sense.
Product Ads allow customers to leave Amazon to complete a purchase. If Amazon is able to keep customers on their site to complete the purchase through their own Marketplace they earn a percentage of the revenue made on each order. Often, this amount is more than the cost per click associated with product ads.
In the upcoming months, sellers and advertisers affected by the discontinuation should take a closer look at their current strategy to see where they can integrate new opportunities and drive revenue, whether that be through Amazon Text Ads or an alternative service available through Amazon.
Does this change from Amazon affect you? Let us know about it in the comments.