Is it a shopping platform? Is it an ad platform? Is it a data gathering experiment? Is it a hybrid meant to be just another potential revenue source? It’s getting really hard to tell. Amazon as most people know it, is anything but an ad platform. But this is rapidly changing, since Amazon ads owns an ever-increasing share of the online ad industry. Here’s what we know for sure: Amazon advertising is here to stay!
Amazon Advertising vs. The So-Far Invincible Google & Facebook duo
The tech titan’s profits come mostly from its online e-commerce platform and from the cloud services it offers. However, Amazon has been lately giving hints of working on growing its advertising business. In a few words, they sell and display ads across its owned network (Amazon Marketplace and its additional services – Kindle, Fire devices, etc).
If you’ve been in e-commerce for quite a while now, you may already know that Amazon is prepping its advertising world domination.
Some brands are already shifting more than 50% of their budgets from Google or Facebook to Amazon. Yes, at this point its net sales come mostly from its online shopping platform. But with an ever-increasing share of the online ad industry, Amazon advertising is not just another little revenue source for the Amazon officials.
For example, Brian Olsavsky, Amazon’s CFO, said their advertising business is a rising star that is starting to make an impact on Amazon’s overall gross profits.
In addition to that, Marin Software’s State of Digital Advertising 2018 report states that 33% of digital advertisers see the rise of Amazon as the industry trend that will most impact their business.
Just in September 2018, Amazon announced a number of changes that will help simplify the process of buying traffic. This is how the Amazon Advertising umbrella brand was born: customers will find all ad purchasing and reporting under this single brand.
Amazon’s place in customer journeys
At an international level, it’s obvious that most shopping journeys start either on Google or Amazon. Indeed, Google has the power to capture all the customer-buying-intent signals & behaviors and transfer all the data further towards its advertising tools. But Amazon’s advantage lies in the fact that it operates way further down the funnel than Google or Facebook will ever get to do, as they offer many growth hacking possibilities to both business owners and digital advertisers.
Amazon advertising is an attractive alternative to Google or Facebook since it offers the data in a more organized way. For advertising customers, this translates easily into better-targeted ads.
And since Amazon has a constant overview and control of all products and contents that are present on the e-commerce platform, advertisers will no longer need to worry about ads showing on unfit websites or alongside controversial content.
In just a few words: business owners cannot ignore Amazon’s endless customers demands. And they have already started first selling in the Marketplace & advertising across all networks. Amazon also offers huge advantages for first-time advertisers (eg: $50 in free click credits) in order to reach their targeted audiences in comparison with Google or Facebook.
Google is also taking the battle directly to Amazon, investing in tools that make purchasing online easier. Google Shopping, which competes against Amazon Marketplace, is a product search engine whose purpose is to help people find items to purchase online. Amazon was also a Google customer but has temporarily stopped buying Google Shopping ads in March 2018.
The Amazon advertising ecosystem
One might wonder: how can advertisers capitalize on the global reach and strong buyer intent signals on Amazon’s platform?
Amazon’s ad slots inventory is evolving rapidly. Until not too long ago, the main indicators that helped customers decide what to buy were price and reviews.
But now, Amazon Advertising is giving more and more priority to sponsored products in search results and is constantly working on making sure that their top paying customers are among top hits in search results.
As a consequence, users often see only subtle distinctions between “sponsored” flagged content and organic results, which is less distracting than you might think when both targeting and relevance levers are working correctly.
Let’s take a closer look at all Amazon Advertising tools.
Sponsored Brands or Products
Sponsored Products and Sponsored Brands (previously called Headline Search Ads) allow advertisers to promote their products or brand to make it even easier for customers to discover and purchase products on Amazon. These ad units allow brands to reach Amazon customers as they research and discover products. The ads appear on search results pages and relevant product pages, directing customers to its designated product detail page or Store.
These ads also provide a wide range of possibilities to increase a brand’s visibility across the Amazon Marketplace, to drive sales for complementary products and to protect a brand’s position by filling all available and desired inventory with sponsored products and sponsored brand ads.
They look very similar to the organic results, but you can easily identify them by their “sponsored” flag. Just like with Google:
- The ads trigger when someone uses the Search Bar
- The ads trigger thanks to keyword matching between what a user searches for and what an advertiser establishes as keywords for the brand it represents
- Advertisers can use different match types for their keywords to reach the desired audience and negative keywords to exclude undesired traffic.
Product Display Ads
Display ads reach relevant audiences on Amazon and third-party sites and apps using customizable brand or e-commerce creatives, and actionable insights to help advertisers optimize ads to achieve various objectives.
Product Display Ads are also available for advertisers who sell products on Amazon to drive traffic to their product detail pages.
These ads are similar to sponsored product ads but offer a greater variety of ad sizes and formats to showcase products to Amazon users.
A key point is that advertisers don’t need to be an Amazon vendor to run display ads since these ads can link out to the advertiser’s site.
Video ads help advertisers tell their brand story and engage customers in brand-safe environments via trusted channels like Amazon and IMDb, on exclusive Amazon devices such as Fire TV or Fire tablet, and across third-party sites and apps.
Stores also allow vendors and sellers to create their own website on Amazon, with its own branded URL. Vendors and sellers can use a Store to showcase a brand story and product portfolio in a curated customer destination. As Amazon says, Stores are custom multipage shopping destinations for individual brands that let customers showcase their brand story and product offerings. Stores’ advantage lies in the fact that they require no website experience and are completely free to use.
Reporting on Amazon
Their measurement solutions, including campaign reporting, retail insights, and third-party reporting, help businesses understand advertising’s impact on shopper behavior, whether they run on Amazon or on third-party sites and apps, thus helping them to optimize marketing strategies in such a manner that will allow them to achieve the desired results.
Recently, the tech titan announced that will introduce a pixel-based solution to track conversions across Amazon’s platforms. Other than that, Amazon provides all the standard metrics that Google and Facebook do in their reporting.
Amazon is clearly on a roll and heading in the right direction. At this point, there is no other e-commerce company with such a prominent market presence, influence in shopping journeys and that could also offer such advertising possibilities for brands to showcase their products. The market is ever-expanding, showing no signs of slowing down, and there’s much more to explore in the world of Amazon advertising.