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August 8, 2025
Why Did Amazon Pull Out of Google Shopping Ads?
Amazon abruptly stopped bidding on Google Shopping ad auctions, opening up a rare paid-search opportunity for retail brands but also leading to a wide range of speculation about Amazon’s motives.
Average shopping-ad impression shares for Amazon on Google Shopping were as high as 60% in the U.S. and 55% in the U.K. as recently as July 17, but started plunging on July 21 and reached zero by July 23, according to analysis by Smarter Ecommerce attained by Digiday. Media agency Tinuiti confirmed the exit.
Many wondered if Amazon’s move was a temporary pullback or a full withdrawal to focus on direct-customer acquisition and double down on its advertising platforms. According to JungleScout’s most recent Consumer Trends Report, 56 percent of U.S. consumers start their product search on Amazon, above search engines (42%) and Walmart (29%).
The move could lead to lower cost-per-click (CPCs), higher impression share, and improved click-through rates for other retailers and brands.
Amazon’s ‘Total Stop’ of Google Shopping Spend Comes as a Surprise to Some
In a LinkedIn post, Mike Ryan, head of e-commerce insights at Smarter Ecommerce, said that although Amazon has been gradually reducing its Google Shopping spend since mid-2024, the “total stop” was a surprise.
His speculation on why Amazon exited ranged from Amazon no longer wanting to fund a large competitor to potential internal shifts linked to AI or its advertising strategy.
He didn’t think it was because of “efficacy,” or the Google Shopping platform no longer providing value to Amazon. He wrote, “I’ve long argued that Amazon uses Google Shopping ads as a Trojan horse: Google can’t help but swallow the ad revenue, it’s too alluring — and yet there is the constant risk that Amazon is stealing future product searches and bringing them into their own platform.”
He said the shift, whether short or long-term, is “sure to make competing retailers rejoice. However, it might be less exciting for brands & sellers, who often benefit from Amazon advertising on their behalf.”
Tinuiti Suggests a Number of Reasons for Amazon’s Exit From the Arrangement
In a blog entry, Tinuiti speculated the reason for exiting could be that Amazon is testing whether Google Shopping ads are “merely cannibalizing existing organic traffic,” or it’s a negotiating tactic to earn better terms from Google. Another potential reason cited was Amazon looking to improve margin optimization by funneling customer acquisition through internal advertising platforms, or making expense cuts following its second-quarter earnings shortfall (although the AWS cloud business was the laggard).
In 2018, Bloomberg reported that Amazon was spending over $50 million annually on Google Shopping ads. Tinuiti said the “most forward-looking” view is that Amazon, with its Rufus AI shopping assistant, is shifting to direct customer acquisition and away from relying on Google’s generative AI-powered funnels.
Tinuiti wrote, “This aligns with a broader industry trend where brands are focusing on Retail Media Networks (RMNs), which offer superior return on ad spend (ROAS) and closed-loop measurement capabilities via first-party data. This move could be indicative of a reallocation of budget from traditional search advertising to RMNs, where Amazon is a leading player.”
Discussion Questions
What makes the most sense as to why Amazon dropped out of Google Shopping ad auctions? Is it more likely a temporary pause for Amazon or a long-term strategy shift?
Is Amazon’s exit a big opportunity for other brands and retailers on the Google Shopping platform?
Poll
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Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Paula Rosenblum
Co-founder, RSR Research
Mohamed Amer, PhD
CEO & Strategic Board Advisor, Strategy Doctor
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Amazon has not publicly discussed the withdrawal, so we cannot be sure of the exact reasoning. What’s for sure is that, in an ideal world, Amazon would prefer not to funnel advertising spend to Google – because it is both costly and funding a rival in the ad space. So perhaps this pullback is a test to understand the impact and the necessity of using Google. Or maybe it is part of a wider strategic move to become self-reliant, especially as AI-related searches become more significant. Only time will tell. The next big event for Amazon is Prime Big Deal Days around October, so it will be interesting to see if they go back to advertising on Google around that occasion.
The same reason Amazon stops doing anything: they don’t really need it.
Others that make the assumtion that the same is true for themselves do so at their peril.
Since we can only speculate, then I’d bet it wasn’t just one reason, but likely the overarching one is that Google Shopping platform was not delivering the required outcomes. At least not as much as it has in the past. Despite the co-opetition Amazon and Google have as partners and competitors, I suspect that Amazon would continue funding this effort if the ROI was superior relative to alternatives. Amazon’s departure does create opportunities for brands/retailers, though the trade-off is that brands that were getting a ‘free ride’ from Amazon ads may now need to increase their ad investments.
Always all about the Benjamin’s. I think this will be a net loss for Amazon. It’s spiteful and dumb
By the way, shopping/searching is becoming a torture on both platforms because of all the sponsored posts
This is platform warfare, not performance marketing. Amazon’s abrupt exit from Google Shopping mirrors Disney’s decision to pull content from Netflix – they’re betting on direct customer acquisition in a post-search commerce era. Amazon is forcing brands into its vertically integrated advertising ecosystem, where it controls both marketplace and purchase intent.
Traditional retailers face an impossible squeeze: pay rising costs for shrinking Google Shopping traffic or build RMNs that require Amazon-scale data and attribution (economically unfeasible for most). Layer in Amazon’s ‘Buy for Me’ beta, where Amazon becomes the autonomous purchasing agent, and traditional retailers aren’t just losing advertising access; they’re losing purchase consideration entirely.
Amazon isn’t optimizing within the game; the company is rewriting the rules to transform independent retailers into suppliers in their marketplace ecosystem.
A strategic refocusing on their own advertising platform to drive traffic directly to Amazon.com may have led Amazon to drop out of Google Shopping ad auctions. Additionally, they may be reallocating resources to enhance their marketplace offerings or to invest in other advertising channels that are more profitable. It is also possible that Amazon is testing the waters to determine how this shift impacts their overall sales and marketing effectiveness before making a permanent decision.
I’d bet that Amazon’s decision to step back from Google Shopping is about control. The more product searches they can pull onto their own platform, the more they own the data, the journey, and ultimately the revenue.
Amazon seemed to be “all in” on Google advertising. Like any smart company, if something doesn’t work, stop doing it – or at least change and experiment. As Neil Saunders says, we can only speculate the reasons for the withdrawal.
Purely speculation, but I think most likely a negotiating ploy to get better rates with Google.
Jason Goldberg did a wonderful report on this pullout signaling the beginning of the agentic wars (https://www.forbes.com/sites/jasongoldberg/2025/08/08/the-ai-commerce-wars-have-begun/). Everyone is trying to create the shopper agent that shops across sites, and can influence what consumers buy. You no longer require a consumer to come to your site. You get disintermediated. Exposing data to your competitor, or feeding their monetization engine by buying ads, puts you at a disadvantage for the long-term. Amazon is firing the first shot.