Why Did Amazon Reduce Ad Spend – and What It Means for Advertisers
If you’ve noticed your paid media performance improving lately, you’re not alone. Many advertisers are asking the same question: Why did Amazon reduce ad spend – and what’s behind the shift?
PPC Analyst, Ramneet, has seen the impact of the change first-hand and is here to talk more about how her accounts have benefitted from Amazon’s spend pullback over the past week.
Since Amazon pulled back its advertising investment across Google and other platforms, some of our clients have seen lower CPCs, stronger impression share, and better ROI.
In this post, I’ll explore why Amazon reduced its ad spend, and how smart PPC advertisers are taking advantage of the opportunity.
So, Why Did Amazon Reduce Ad Spend?
Amazon has long been one of the biggest digital advertisers in the world, spending billions annually across Google, Meta, and its own network. But since earlier in 2025, there’s been a clear decline in Amazon’s external ad activity, particularly on Google Shopping, Search, and YouTube.
Fast-forward to just a week ago, Amazon seemed to completely cut it’s Google Shopping ad spend.
Here are a few key factors that may explain why Amazon reduced its ad spend:
- Focusing on profitability over growth
- Shifting towards the channels they own
- Efficiency improvements through AI implementation
- Pressure to scale back aggressive strategies
This is – of course – just speculation, and Amazon haven’t officially revealed their reasoning for pulling back ad spend. But what we do know, is that this change is hugely benefitting other advertisers.
How This Benefits Other Advertisers
While we’re speculating that Amazon’s reasoning is largely internal, the impact for other advertisers is real. With less competition from the retail giant, many brands are enjoying:
- Lower CPCs across Shopping and Search
- Higher impression share
- Improved return on ad spend (ROAS)
Real Client Results:
My client, operating in the books and literature industry, has long faced Amazon as the industry giant, as they boasted impression share of upwards of 80%. Since Amazon pulled back spend and their impression share dropped dramatically, my client has seen a more competitive, yet cost-effective, CPC.
As Amazon’s impression share drops sharply after the week of July 14th, average CPC also falls from a peak of £0.53 to £0.40.
During this same period, my clients sales increased massively, with heightened impression share and a higher CTR as a result of Amazon’s absence.
In addition to the real-time results we’re seeing, this period is also having an impact on YTD growth, with a 12% increase in YOY sales.
What Advertisers Should Do Now
If Amazon’s ad spend pullback continues, there’s a short-term window of opportunity for advertisers who want to use it to their advantage.
Here’s how to capitalise:
Double Down on Shopping & PMax
With less Amazon competition, Google Shopping and Performance Max are seeing improved efficiency. Maximise visibility now before CPCs rise again.
Own Your Branded Terms
Amazon was known to aggressively bid on brand terms. Now’s the time to reclaim that space at a lower cost.
Test Upper Funnel Campaigns
YouTube, Display, and Discovery ads may have lower CPMs as Amazon reduces spend. It’s a great time to build top-of-funnel awareness more efficiently.
Final Thoughts
So, why did Amazon reduce ad spend? Right now, all we can assume is that the changes are strategic, and advertisers shouldn’t be sitting on their hands. We don’t know how long Amazon’s hiatus is going to last, so now is the time to take action.
Brands now have a rare and valuable opportunity. The digital ad landscape is momentarily less crowded – and that means better results for advertisers who act quickly.
Want Help Seizing the Opportunity?
If you’ve seen performance gains or want to explore how to benefit from Amazon’s reduced ad presence, let’s talk. Our PPC team specialises in data-driven strategy and capitalising on market shifts.
