Dive Brief:

• Amazon has stopped bidding in Google Shopping auctions, according to a blog post by Dentsu Aegis Network-owned performance marketing agency Merkle. 
• Amazon had a strong presence in the home goods product category, but the company also appeared in Google Auction Insights reports in other categories, like furniture, office supplies and novelty gifts. An analysis revealed that Amazon disappeared from Auction Insights reports on April 28. 
• The news comes after Amazon’s Google Shopping Impression share dropped to 26% at the end of Q1 2018. 

Dive Insight:

It's unclear whether the news is another example of the ongoing competitive jabs Google and Amazon periodically take at one another, is a strategic move on either company's part or is simply a temporary state of affairs as Amazon reworks its bidding strategy. In any case, given Amazon's oversized role in online commerce, its exit from Google Shopping auctions  — where the e-commerce giant only began participating around 18 months ago — could open an opportunity for other retailers to take a strong position in what has become a very important retail search strategy, as U.S. retailers now devote 76% of their paid search budget to the visually-driven paid search format. 

Amazon’s decision to pull out of Google Shopping auctions comes as the company is realizing the potential of search options on its own site. More than half of shoppers begin their product searches on Amazon, and the number keeps growing. Marketers spent 96% more on Amazon's Sponsored Products and 90% more on Headline Search Ads offerings in Q1 of this year, MediaPost reported citing an earlier Merkle report. 

While Amazon's own paid search offerings are gaining steam, Google continues to expand its shopping options. In late March, Actions rolled out enabling Google Express ad units to appear in the Shopping carousel, giving Google a commission on every conversion from Express retailers, which could have factored into Amazon's decision to exit Google Shopping, according to Merkle. Retailers who previously saw Amazon appear as a competitor in the insights report provided to advertisers by Google now see Google Express as a competitor, although its share of impressions is still relatively small. 

The news is not the first time Amazon has been at odds with Google. Amazon announced plans to stop selling Google’s Nest smart-home products earlier this year once current inventory sells out. The e-commerce giant recently purchased smart-home brand Ring in an effort to compete with Google. The two companies are also major competitors in the smart speaker space.

Whether Amazon’s move is permanent remains to be seen, as the Merkle post suggests that it is not uncommon for competitors to fall off Auction Insights reports. In the mean time, Amazon continues to build its advertising offerings. In Q1 2018, Amazon reported that its “other” category, which includes advertising jumped 72% from the previous year to $2 billion, and company officials called advertising a “multi-billion dollar” program for the company.