Amazon Is Taking Significant Advertising Share And Could Be Helped by DOJ Actions Against Google

My friend Adam Crawshaw asked an interesting question last week: "What impact does the latest Google DOJ lawsuit have on Amazon?"

The short answer is not much. But we should go over it.

* The DOJ is suing Google for "monopolizing digital advertising."

* Google has a 27% share of advertising revenue, which has been slowly declining primarily due to Amazon's share gains.

* Instead of suing Google for share of advertising, the DOJ would have better trained its guns on the share of search, where it has approximately a 90% share, depending on the market.

* At the heart of the suit is monopoly technology raising ad rates and causing harm to small businesses...

however, if want to pinpoint a singular event raising ad rates, it's not Google, it's Apple putting the screws to Meta that has raised ad rates.

This leads me to believe:

* The DOJ believes it needs "consumer and business harm" to prove anything -- monopoly, per se, is not enough. (in other words, what consumer or small business is whining about the free and amazing Google search?)

* This is why it went against advertising and not search, although Google has no monopoly in ads.

However:

* If anything, Google and others are losing share to Amazon, which has gone from a 7% share of ad revenue in 2019 to an expected 13% last year.

* It's Amazon that is growing faster than everyone else.

* The facts also tell us that Amazon's CPCs are the ones that are steadily rising (not Google's), a double benefit for Amazon.

Which tells me...

* While Google is distracted with this, it could still give Amazon a big opportunity and opening.

* Amazon is still the top intent-to-purchase advertising channel on the planet, on a channel level, and likely still has another 5 to 10 points of share to gain in the next five years.

* Amazon steadily rising CPCs could eclipse and put pressure on their growth rates if they don't continue to add more advertising surfaces to place inventory on... Which is the place where Google shines the most.