‘Google is the only winner’: Google’s anti-tracking moves could slow Amazon’s ad growth

“Third-party audiences are going to be a nightmare,” said Pedro Mona, managing director, platforms and engineering at iProspect. “The volumes will decrease significantly. The ability to track their own audiences outside Amazon will go down. Not necessarily on a device level as they will still have their app installed in a number of devices, and there might be a way they can still track users there. But [on web] they will see a reduction, like everyone else. Google is the only winner.”

Amazon doesn’t split out how much of its ads business is conducted on and off its own sites, but it’s reasonable to presume the majority is on site. However, it will no doubt limit off-site plans, according to agency executives.

“It does limit their opportunity to go full-scale programmatic,” said a media agency executive who spoke anonymously because of its relationship with Google.

“If say, 100,000 people have demonstrated an interest in Doc Martens when searching on Amazon, and they then want to find them programatically off Amazon, then you will have a problem,” added Mona.

Over the last two years, Amazon’s ads growth exploded . However, that meteoric growth spurt seems to have been short-lived. In the company’s first-quarter earnings report, Amazon said its ads business growth had slowed to 36%, totalling approximately $2.7 billion. Whereas, in the three previous quarters of 2018 ad revenue was up year-over-year 95%, 123% and 129% respectively.

Much of Amazon’s ads growth has come about as a direct result of advertisers shifting budgets from Google. Amazon is forecast to claim 8.8% of U.S. digital ad spending in 2019, up from 6.8 percent in 2018, while Google is expected to lose 1 point of market share dropping to 37.2%, according to an eMarketer report.

Should a lot of Google users choose to block third-party cookies, several agency executives have predicted that Amazon will start to push more aggressively into the mobile app ecosystem, where third-party cookies aren’t used. Others have stressed that if Amazon’s programmatic ads business is affected badly as a result of Google’s privacy changes, that Amazon will merely find other ways to offset such as working closer with media owners.

“They can build integrated data management solutions for publishers,” said an ad tech executive who spoke anonymously.

Naturally, a lot will hinge on how Google markets the ability to block to users. If it’s a clear reject-all third-party cookies for ad tracking purposes, or accept all, then Amazon could be lumped in with all other ad tech vendors. But if the user choice is buried in multiple layers within the settings — a bit like Google’s GDPR consent options — it’s unlikely to have as big an impact. “Once we start to see the beta version in Chrome people will get an idea of how we can adapt,” said a media agency executive.

Ultimately, while there may be some short-term pain should a large volume of users decide to block third-party cookies, most industry executives spy long-term opportunities.

“There will be massive opportunities for anyone that can extract value from users and find different ways of living in a cookie-less world,” added Mona.