Online retailer Amazon.com Inc. (NASDAQ: AMZN) spent $158 million in 2013 to buy search advertising from Google Inc. (NASDAQ: GOOG), nearly twice as much as the $82 million that second-ranked Priceline Group Inc. (NASDAQ: PCLN) spent. In all, the top 25 search advertisers spent $1.34 billion with Google last year.
The interesting thing about the top-ranked spender is that Amazon generated $750 million in global ad revenues of its own last year and is expected to raise that number to $1 billion in 2014. Even as Amazon increases its own ad revenues, it continues to spend heavily on Google search ads because it is first and foremost a retailer and search ads offers primarily the kind of direct-response advertising that retailers favor.
According to AdGooRoo, a Kantar Media company, and Ad Age Datacenter, direct-response advertising accounted for 58.4% of U.S. digital ad spending in 2013, and that percentage is expected to rise to 59.1% this year. Research firm eMarketer says that the four top-spending digital advertiser categories are retail, financial services, automobiles and telecom services, and that each of these spends the majority of its U.S. digital ad budget on direct-response ads.
The totals include only desktop search ads on Google Web properties — mobile search ads and search ads displayed on third-party properties that use Google’s search engine are not counted. Also not counted are Google’s product listing ads (PLAs).
READ ALSO: Jefferies Has 5 Big Internet Stocks to Buy for the Rest of 2014
The top 10 search advertisers with Google include:
- Amazon, $157.7 million
- Priceline, $82.3 million
- AT&T Inc. (NYSE: T), $81.9 million
- Expedia Inc. (NASDAQ: EXPE), $71.6 million
- Microsoft Corp. (NASDAQ: MSFT), $67.1 million
- Experian, $61.7 million
- Wal-Mart Stores Inc. (NYSE: WMT), $59.7 million
- Sears Holdings Corp. (NASDAQ: SHLD), $59.2 million
- IAC/InterActiveCorp (NASDAQ: IACI), $53.9 million (excluding Ask.com)
- Apollo Education Group Inc. (NASDAQ: APOL), $53.5 million
The top automobile search advertiser at number 12 is Fiat Chrysler, and Berkshire Hathaway Inc. (NYSE: BRK-A) pulls in at number 13 with a search ad spend of $45.7 million, primarily on behalf of its Geico insurance business.
Given retailers’ affinity for direct-response advertising, it is odd, perhaps, to see just six retailers in the top 25. Besides the success of the product listing ads that Google introduces last year, retailers very likely outnumber all other categories of digital ad spenders as we move below the top spenders.
Top Gaining Stocks
Top Losing Stocks