In Search Podcast: Is Amazon Targeting Smbs With Search Ads?

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How Amazon Might Be Going After Small Businesses on the Google SERP: Summary of Episode 87

Jason Dodge joins the podcast to share his discovery around Amazon’s use of Search Ads to compete with SMBs:

• How Amazon might be leveraging Search Ads to compete with local suppliers in unexpected ways
• What Amazon’s paid search strategy implies about the overall direction of the platform
• How Amazon’s use of search ads might impact competitor’s ad budgets negatively

Featuring:

Mordy Oberstein (Host)
Jason Dodge of Black Truck Media (Special Guest)

Unpacking Amazon’s Paid Search Strategy: A Conversation with Jason Dodge

Mordy: This is another In Search SEO podcast interview session. Today we have with us for your listening pleasure, a man who could talk for hours about the skiing conditions of Michigan while building a Roadster with his own bare hands. He’s a podcaster SEO speaker and the founder of Black Truck Media. He is Jason Dodge. Welcome!

Jason: Thanks for having me.

M: I have to ask the obvious question. There are a lot of car things going on. There’s Black Truck Media, the Roaster building, and that your last name is the name of a car company.

J: Yeah, no association with the Dodge Brothers. If I was affiliated with that company and had some sort of lineage there, I’m not sure I would be in the SEO game or not. Maybe I would be sitting on a beach somewhere. As for the name of the company, when I started the company I drove a black truck and that’s as simple as it is.

M: What kind of truck was it?

J: It was not a Dodge. It was a Chevy S10. It was like a rusted out black mini truck.

M: That’s even better.

J: So my hobbies are very analog. A lot of us sit behind a computer and keyboard all day long. So one way for me to escape is to shut everything off and work with my hands. To work with a completely different side of my brain and go after those challenges.

M: Before we get started about Amazon can you give us a little plug on Black Truck Media?

J: Black Truck Media has been around for 11 years. I’ve been in the search industry for 17 plus years now. We’re primarily a search engine marketing firm. We focus strictly on SEO, SEM, content marketing, analytics, and everything in between. I always say that we don’t build websites, we make them better for search and to get users to do what we want them to do. This ultimately leads people to ask if we build websites. We don’t, but anybody in the search industry gets that.

M: So let’s talk about Amazon. You’ve seen from a very large number of keywords that Amazon is going after small businesses with Google Ads.

J: Yeah. Really interesting things happening there. A little bit of background on it. Probably six months ago, we noticed in our office that Amazon’s business arm, i.e., business.amazon.com, was showing up as a pretty major competitor for one of our larger PPC clients. What struck us odd about it was that the client is primarily in the food supplier/wholesaler industry across multiple verticals, from restaurants to higher education to healthcare and things of that nature. While Amazon had been on our client’s radar since their acquisition of Whole Foods in 2017, it probably was more on a retail level. It wasn’t to the magnitude that they could be a major player in the actual distribution and fulfillment side of it for fulfilling restaurants, colleges, and healthcare facilities.

So that struck us as odd. Which then led me down the path of trying to gain some insight on what else they’re bidding on. At that point in time, it was more of a curiosity research project to see what they’re bidding on and not to see what they were ranking for organically. I was strictly going at it with my PPC hat on. One of my favorite tools to do PPC sleuthing and research is SpyFu. I think it’s fun to see ad history and how people wrote bad ads and things like that. So we plugged their vanity domain into that and at the time, about six months ago, I think it kicked up around 65,000 keywords they were bidding on. And then when I re-ran it and shared it with you it was over 100,000.

That’s a silly amount of keywords. The value of that is over $500,000 a month in spending. Theoretically, they’re spending $6 million a year just in Google Ads and that doesn’t include display ads, retargeting, social ads, and things like that. And the verticals that they were going after are fascinating. It’s anywhere from what you would expect like buying in bulk, but then there were medical-related things, and this was all pre-COVID. Think anything disposable like medical masks they were bidding on.

M: If I remember correctly in the data you sent me they were bidding on dentist chairs. I’m actually looking up right now on Amazon. You can buy a dental chair.

J: Right, it’s crazy. What’s interesting is the same thing can be said for medical. The same thing could certainly be said for food supply and restaurant supplies. And then to the most obscure of like meat wholesale and meat suppliers.

M: Why are they doing this?

J: Obviously, I think a lot of this is built off assumptions and theories. They’re not ranking organically for nearly any of these phrases so A) they have to buy the traffic and B) I think it’s a total market play. Any seasoned digital marketer who has been around PPC long enough knows that one of the best tools to use to go in and try and penetrate or test the market is to say, “I’m going to go and drop $500 or $1,000 and I’m going to test this market. I’m going to see how that market reacts to me. I’m going to see how they interact with my ads, what the engagement is once they’re on my site, etc.” It’s cheaper than doing first-party market research. It’s way cheaper than sending you and your team out to do a bunch of market research in that area.

M: For the meat example, what are the pages that they’re linking to in the ads? How do you test something like that? I’m assuming for something like ‘buying meat in bulk,’ whatever page you’re looking at is not going to align with what they want.

J: You’re absolutely correct. It’s not going to. If you go to their Amazon business section right now, you’ll see it. It’s buried in restaurant supplies in this case. And it’s people that they’ve partnered with. They’re saying they have over 19 million restaurant suppliers and trusted brands. They could potentially send people there. Is it going to have a poor quality score compared to my clients running ads? Absolutely, it will. But they’re willing to pay for it.

M: Are they trying to see how willing businesses would be to buy meat from Amazon? Is that what they’re trying to see? Just the clicks?

J: When you look at something like wholesale meat suppliers, for instance, that’s hyper-local. There’s probably some consumers that are going to order some beef and have it shipped from California to the Midwest but there’s actually no need to do that. And I don’t think that any restaurateur is going to do that either. No good chef is going to do that. When they’re looking for a meat supplier, it’s local, they want it on time and fresh.

But I think as PLAs have become more prominent in Google search, it’s obvious that it’s becoming more consumer-driven. The unfortunate side of SpyFu is we don’t get to see any kind of geographic data. That would be really interesting to hone in at a hyperlocal level or at least a regional level. Because Amazon may not be bidding on it in the Midwest, but they could totally be bidding in the southwest.

M: I have a bunch of questions about the end impact of what they’re doing, but first, let’s go back to the dentist thing you mentioned before because I don’t want to forget about that.

J: Yeah. I think the underlying tone of all this is, if you were to blow this up in a big picture, what you see in these groups is they’re going after consumable products that are used by service-based businesses. That’s their in. I don’t know if they’re interested in the hardcore equipment per se, but definitely those consumables. Especially when you look at the dental and medical market and things like that, those types of businesses are going through countless numbers of latex or nitrile gloves, they’re going through countless numbers of masks, etc. What they’re doing is disrupting a traditional distribution channel. Those types of businesses typically are buying from a single source. I think Amazon’s looking at this and saying, “Well, you’re already buying your toilet paper and paper towels from me. Why not buy everything else from me?”

M: That’s a brilliant point. About 15 years ago, I used to do property management for a company in New York City. We were ordering massive amounts of garbage bags every single week. I was ordering from Amazon for personal things all the time at this point, but I would never have thought to order in bulk from Amazon. We used to go to local suppliers and it was great because they would bring you scotch every Christmas to make sure that you kept using them. It was a good old boys network where everyone knew each other and it seems that Amazon is trying to get rid of it.

J: Yeah, and especially in a market like in Manhattan, New York. I think every area of the United States has different pockets. Here in West Michigan where I’m located, we have a bubble. It’s hard for people to come in from the outside and penetrate that, but it’s also difficult for people to go outside of that bubble too. I think Amazon is looking at that and saying, “Screw you guys.” Here’s our large distribution center that for me is 10 miles down the road.

M: That’s amazing.

J: That’s a big thing people need to keep an eye on. From the medical standpoint, again, it’s consumable products. So how can we use this type of data? Because I don’t think it impacts just small businesses. It impacts those that have that traditional selling model. If anything, Amazon has pushed manufacturers to sell directly. For instance, we work with a brand that works in the plastic injection mold industry. Greases, coatings, and ancillary products. They’re consumables that are being used in high quantities. These are bought by the case or by the gallon, that type of thing. It doesn’t pay to sell under a distribution model when you can sell directly because if you come to my site, you’re getting information and odds are you’re starting to get lower and lower into the funnel. So either I’m going to send you off my site to go to some comparison shopping engine, or I’m going to sell it to you right there and I can sell it to you at retail. I don’t have to give you a discount or give you free shipping if I don’t want to because I know I’m probably going to get the sale if you go elsewhere.

M: I wonder if Amazon will get more aggressive with this because it’s almost like a really bad PR campaign for them. They’re targeting local retailers and trying to run them out of business. I don’t think it’s nefarious where they’re actively trying to run them out of town. I think they’re just trying to make money.

J: I think you’re correct. I don’t know if they’re going into it with an evil approach. It’s test market stuff. They’re testing the waters and the market to see if they can go into an area that maybe is traditionally buying from different types of companies. Can they penetrate that market? And if they can, then maybe they’ll pursue that. That’s marketing and market research. They’re just able to do it digitally online with the power of distribution.

M: So they’re literally just buying the research.

J: Let’s take this model that we ran through and see what’s stopping another major brand from doing this. If we ask the question, how can we use this type of data? It’s not what people search for, it’s why they’re searching. That’s my big shtick especially in the last two years of speaking. Why did that person search for what they searched for to begin with? Did they buy a car because they needed to go from point A to point B? Or did they buy a car because they moved out of New York where they lived for eight years where they didn’t need to own a car? Those are very different and you need to be able to align that.

How can we use that type of data is the second part of the question. I think that it allows any brand to see inside the mind of a competitor or see inside the mind of an industry giant in the e-commerce world. It would be interesting to do the same thing with Walmart. If I was Walmart I would certainly be looking at this.

M: Do you think there’s a way to leverage this without the budget of Amazon or Walmart?

J: Yeah, let them pay for it. The data is there. Look at the hundred thousand keyword list, Amazon paid for that. It’s the classic way to use PPC data to improve organic positions, develop content, and drive traffic except here it’s being done at a larger scale. It helps you also understand what they perceive to be valuable. If they’re paying for that traffic, it’s got to be valuable. The disclaimer is just as there’s good SEO, there’s good and bad PPC too.

M: They’re spending tons of money for ads here, which means they’re precluding the normally expected suppliers from showing up on ads. In theory, they’re disrupting the whole ads process.

J: I like to explain it as supply and demand. It’s classic economics. If you can just understand it at that real basic level, the supply is the number of keywords in the market and the demand is the number of people that are actively searching for it inside of the month. If you start and pause with that in mind, that’s paid search in a nutshell. That’s how I explain it to people that don’t understand it. To your point, if you have Amazon in a certain market or a certain vertical with their foot on the gas pedal wide open, it will potentially be hard to get your foot in the door.

M: Is that a systemic problem that you can outbid the quality score?

J: I think that the answer is yes, you can. But is it wise? No, but you could.

M: To wrap up, if you’re a business and you’re seeing this, what’s one takeaway that you would focus on?

J: Two parts. One, don’t freak out. Pump the brakes, take a step back, and look at what they’re doing. Go look at the pages that they’re sending people to and try to understand if that experience is terrible. How can you do better? Look at your competitive insights in your Auction Insights in your Google Ads campaign to see who else is coming in there.

The other one is, how can you use it to your advantage? How can you use those insights? Plug it into a tool, take a tool for a free spin, and try and extrapolate as much as possible.

M: Like Rank Ranger.

J: Absolutely.

Optimize It or Disavow It

M: If you sell retail products and you could either do SEO for Amazon or you could do SEO for Google. You can’t do both. Which one would you do?

J: Oh, man. It would be hard-pressed. If I go super consumer-oriented and I’m churning through a lot of them, I’m probably going to go with Amazon. That’s just the reality of the situation as everything has less to do with search and more about the app and what I’m acquainted with as the number one retailer online.

M: Did you hear that? That was Google moaning at your answer.

Thank you so much, Jason. I really appreciate you coming on.

J: Hey, thank you. Thanks so much for your time. I appreciate it.

Tune in next Tuesday for a new episode of The In Search SEO Podcast.

by Darrell Mordecai

Darrell creates SEO content for Similarweb, drawing on his deep understanding of SEO and Google patents.