What Was Behind Amazon's Unexpected Exit from Google Shopping Ads?
Amazon abruptly and unexpectedly exited Google Shopping Ads in several key markets such as the US, UK, and Germany towards the end of July 2025. As Amazon was one of the leading spenders and advertisers on Google Shopping, with a whopping impression share and ad spend share, this shock left many industry experts, analysts, and marketers stunned.
Why did this happen, and what does it mean for Amazon, its customers, and the future of digital marketing? Let's look at the reasons, likely actions taken, and potential consequences of this move.
Identifying the Reasons for Amazon's Retreat
Although Amazon remained mum and without an official reason, statistics experts and businesspeople have compiled several plausible reasons for this strategic pullback.
ROI concerns do seem to be one of the main reasons. The Google Shopping Ads CPC is said to be extremely high due to heavy competition. Even when taking the ad spend into consideration, the amount of traffic may not be providing good sales conversions for an Amazon-sized retail behemoth. Another means of expressing this is that the channel may be generating diminishing returns on investment.
Changing competitive dynamics between Amazon and Google are another factor. Google is becoming more than just an ad platform; it is a direct retail competitor because of its growing e-commerce activities, including its Shopping Actions and retail partnerships. Amazon was essentially subsidizing a competitor's growth by aggressively promoting on Google Shopping. That advantage diminishes when one decouples from that channel.
Additionally, it's very likely that Amazon is experimenting with incrementality. That is, pausing Google Shopping Ads temporarily to understand the amount of incremental sales they generate versus sales that would have occurred regardless. eBay and Airbnb are among the other firms that have utilized similar tactics to optimize advertising budgets and strategies. This helps in cutting wasteful spending on ads that fail to add value.
Finally, this retraction follows Amazon's annual Prime Day celebration. Amazon is poised to be refashioning its advertising plans, rewriting its budgets, and preparing for future seasonal campaigns like holiday shopping season and back-to-school.
What Is Amazon Trying to Do?
This is more than cost reduction. Brands can now advertise directly within Amazon's platform because the company's ad platform, or retail media, is rapidly increasing. Amazon can internalize marketing expenses by diverting Google Shopping's ad budget.
In addition, by taking its ad budget in-house, Amazon can minimize customer leakage, which occurs when consumers click on Google Shopping ads and are directed to competitor or comparison websites. Amazon retains traffic and revenue within its system by concentrating on its own ad tools.
What Will Happen to Amazon Next?
Amazon is also likely to put a greater emphasis on its proprietary Amazon Ads system in future moves. Rich targeting is provided by the in-house ad system, which is powered by browsing history, past purchases, and customer behavior. It provides Amazon with greater ad spend margins and richer insights into consumer behavior.
Or Amazon might be building next-generation advertising features that closely align with or even surpass Google's, like Performance Max campaigns, but purely within Amazon's own retail ecosystem. That would lower the dependence on third-party platforms even more.
This is a huge boon for other retailers and brands that advertise on Google Shopping. Without Amazon competing in the auction anymore, ad impressions can be provided and CPC on ads can be lower. This makes it easier for smaller competitors to compete and win users that Amazon's enormous ad spend often tends to dominate previously.
What Will Happen to Amazon Next?
Amazon is also likely to put a greater emphasis on its proprietary Amazon Ads system in future moves. Rich targeting is provided by the in-house ad system, which is powered by browsing history, past purchases, and customer behavior. It provides Amazon with greater ad spend margins and richer insights into consumer behavior.
Or Amazon might be building next-generation advertising features that closely align with or even surpass Google's, like Performance Max campaigns, but purely within Amazon's own retail ecosystem. That would lower the dependence on third-party platforms even more.
This is a huge boon for other retailers and brands that advertise on Google Shopping. Without Amazon competing in the auction anymore, ad impressions can be provided and CPC on ads can be lower. This makes it easier for smaller competitors to compete and win users that Amazon's enormous ad spend often tends to dominate previously.
Will This Withdrawal Last?
The majority of industry observers do not believe that this is a long-term change. Previously, particularly during the lockdowns in 2020, Amazon has paused Google Shopping Ads temporarily before restarting when the channel was once again in its favor.
The duration of the current hiatus can range from a few weeks to several months. Before resuming work for significant seasonal holidays later in the year, it could be a short-term hiatus to redistribute resources or just a beta period.
The Greater Strategic Aim of Amazon
In essence, it is a reflection of Amazon's eagerness to disrupt the Google and Meta duopoly and emerge as a retail media advertising behemoth. Amazon is constructing a more autonomous ad environment with enhanced data control and user experience by shifting ad budgets into its own platform.
Amazon is one step ahead of third-party ad platforms because it owns the entire customer journey from product discovery to purchase.
Amazon is essentially becoming a retail media empire in and of itself rather than an online store. These changes will be significant enough to alter the digital marketing space forever.
What Is There to Learn for Marketers?
Amazon's departure from Google Shopping Ads is a reminder to brands and marketers to diversify their channels for ads and to check the marginal return of each one every now and then. Smaller advertisers expose themselves to danger when they overinvest in any one source of ads, particularly one subject to the control of a dominant player.
While Amazon is offline for a while, it might be the perfect time to test other possibilities on Google Shopping and elsewhere.
Overall, Amazon's abrupt withdrawal from Google Shopping Ads is not a hasty retreat but a thoughtful, calculated one. It is all part of a bigger plan to decrease dependence on rivals, enhance ad spending efficiency, and focus on its own retail media platform.
In this new landscape, retailers and marketers are faced with challenges and opportunities alike, even though customers will notice subtle variations.
What is true, whether Amazon gets back into Google Shopping Ads or not: the face of online advertising is evolving, and the winners will be those who evolve the quickest.
Author: BetweenIT
Between IT is a team of digital experts dedicated to innovating and delivering 360° digital solutions. For 6+ years, we've been helping brands connect with consumers by offering tailored strategies to expand online presence and business growth.
