Until recently, Amazon included three ad products in its suite of cost-per-click (CPC) options: Sponsored Products, Sponsored Brands (formerly Headline Search) and Product Display (now included in a different grouping as "Sponsored Display" ads). Sponsored Products has long dominated in terms of spending.
We don’t have search vs. display forecasts for these companies, though in all three cases we believe revenues are tilted toward display (in Etsy’s case, display is 100% of revenues). All three companies are also expected to enjoy an acceleration in net US digital ad revenue growth this year due to the pandemic and related ecommerce sales trends.
This led to unprecedented price drops for Sponsored Product ads in Q2, according to several firms that report on Amazon ad pricing and other benchmarks. Merkle, Tinuiti, and ad technology provider Pacvue reported their clients’ CPCs for Sponsored Product ads dropped by double-digit rates in Q2 2020 compared with the same period in 2019.