Amazon’s Google shopping exodus: A strategic masterstroke or costly gamble?

Something extraordinary happened in late July that sent shockwaves through the digital advertising world. Almost overnight¹, Amazon disappeared from Google Shopping ads worldwide. Not gradually. Not partially. Completely.

The e-commerce giant’s median Shopping ad impression share crashed to zero percent across major territories: from approximately 60% to 0% in the United States, 55% to 0% in the United Kingdom, and 38% to 0% in Germany.¹ To put that into context imagine if Tesco suddenly vanished from every high street in Britain overnight.

The move was no knee-jerk reaction. Amazon had already reduced its Google Shopping spend by 50% in the United States during May 2025, suggesting the July withdrawal followed months of strategic planning rather than an impulsive decision.²

The Prime Day connection

The timing of the move is what’s most intriguing. Prime Day 2025, which ran from July 8-11, was Amazon’s biggest Prime Day event ever³ delivering record sales and savings. U.S. online spending reached a record $24.1 billion over the four-day period, beating forecasts and more than doubling Black Friday 2024’s total of $10.8 billion.⁴

Amazon had ramped up its Google Shopping presence significantly during Prime Day itself,⁵ flooding Google’s shopping carousels and dominating the search results. So after such huge success, why pull the plug? Assuming the move is a permanent one, one thing is for certain – the 2025 Black Friday event will be a fascinating watch.

Follow the money

The financial implications are staggering. While exact figures for Amazon’s Google Shopping ad spend remain elusive, the company was undeniably one of the platform’s top spenders, rivalled perhaps only by Walmart. This spend will have been a significant part of Amazon’s total ad budget.

As the world’s biggest advertiser,⁶ Amazon will likely be using sophisticated Market Mix Modelling (MMM) to understand the profit contribution for all parts of their marketing activity. Switching off Google Shopping ad spend won’t be a blind experiment. This is a decision that would have been made with a lot of data to back it.

With over 4 billion product searches per month, Amazon has become the world’s second-largest search engine, trailing only Google.² It’s possible their MMM data points to an opportunity for shifting that spend into upper funnel “brand” advertising that over time drives more direct Amazon traffic where Amazon can shape and profit from the full customer journey from search to sale within its own domain.

AI motivations

Another compelling explanation is the ongoing AI search arms race. Defensively, Amazon needs to protect its position from shifts towards AI-based search solutions, including those Google is developing. Offensively, Amazon is expanding its own AI search capabilities with features like multimodal search that allows users to combine text and image queries within a search query, their ‘Buy for Me’ agent which will allow shoppers to buy and pay for products from other websites without leaving Amazon. They’re building the next generation of product search, and they don’t want Google controlling that experience.

Amazon isn’t the first to test this strategy

Amazon’s withdrawal from Google Shopping might seem unprecedented, but they’re not pioneering this approach. Several major brands have conducted similar experiments with varying degrees of success. Earlier in 2025, Chinese e-commerce giants Temu and Shein also “ducked out of the search market” due to rising costs⁷ and the impact of tariffs on their US business.

But perhaps the most famous case study comes from eBay, which in 2012 conducted extensive testing by turning off their Google paid search campaigns. eBay’s research concluded that branded search ads were largely ineffective because users would simply click on organic results instead. For non-branded keywords, they found minimal impact on overall sales, leading to their controversial claim that “paid search is ineffective”.⁸

However, critics argued that eBay’s notoriously poor ad creative and bidding strategies may have skewed the results. As one industry expert noted, eBay’s “carpet-bombing ad strategy” with dynamic keyword insertion often created “absurd search ads” that were doomed to fail.⁹

In 2021, following a pandemic induced reset and subsequent shift towards brand advertising, Airbnb CEO Brian Chesky said that the brand would never again rely so heavily on performance marketing (as it did pre-pandemic). And two years after the decision to reallocate marketing spend, the company reported its most profitable fourth quarter on record in February 2023.¹⁰

What makes Amazon’s move different is the scale and timing. As one analyst noted: “Are we set to see another case study like the great case studies before them from the likes of eBay and Airbnb? Amazon isn’t exactly a great brand to study for typical user behaviour, but the outcomes from tests like this are rich with data.¹¹

New opportunities created

The immediate beneficiaries are clear. Amazon’s exit from Google Shopping removes one of the biggest and most aggressive competitors in ad auctions. This could lead to lower CPCs (cost per click), higher impression share, and improved click-through rates for other retailers and brands.

With Amazon typically appearing in around 30% of Shopping auctions, their departure represents a seismic shift in the competitive landscape.¹² Imagine competing for auction bids when the biggest spender suddenly leaves the room. Early data suggests some advertisers are already seeing 7-12% drops in CPC across some verticals.¹³

The verdict

For retailers and brands, this presents an unprecedented opportunity. Amazon’s absence from Google Shopping auctions creates space that hasn’t existed for years. Smart brands should be auditing their shopping campaigns immediately, looking for opportunities to scale where Amazon once dominated.

However, maybe don’t get too comfortable! The real question remains: is this a temporary pause or a long-term strategy shift? Amazon could return to Google Shopping at any moment, potentially with even more aggressive bidding strategies.

But if the move turns out to be permanent, the exit from Google Shopping represents more than a tactical advertising decision – it’s a declaration of independence. Amazon is betting that they can control the entire customer journey without Google’s help. They’re wagering that their investment in brand, AI search tools and their massive product catalogue will create a self-sustaining ecosystem that doesn’t need Google to grow. As we said earlier, a fascinating watch.

References:

1. https://ppc.land/amazon-removes-all-google-shopping-ads-globally-in-48-hours/
2. https://cedcommerce.com/blog/amazons-total-exit-from-google-ads-months-in-the-making/
3. https://www.aboutamazon.com/news/retail/prime-day-2025-recap
4. https://incrementumdigital.com/blog/ecommerce-news/guide-to-amazon-prime-day-marketing-advertising/
5. https://growbydata.com/amazon-prime-day-2025/
6. https://adage.com/article/datacenter/25-biggest-global-advertisers-include-amazon-loreal-pg-and-alibaba/2590216/
7. https://digiday.com/media-buying/amazon-has-abruptly-cut-google-shopping-ad-spending-cue-speculation/
8. https://hbr.org/2013/03/did-ebay-just-prove-that-paid
9. https://searchengineland.com/ebays-paid-search-ineffective-study-gains-buzz-skeptics-194850
10. https://www.thedrum.com/news/2023/08/24/airbnb-cmo-ditching-performance-marketing-big-bold-brand-campaigns
11. https://searchengineland.com/amazon-pulls-out-of-google-shopping-ads-459509
12. https://www.campaignasia.com/article/amazon-disappears-from-google-shopping-ads/503859
13. https://www.ecommercenorthamerica.org/2025/07/28/amazon-exits-google-shopping-ads/
14. https://www.mediapost.com/publications/article/407707/amazon-turns-off-google-shopping-ads.html