Why Advertisers Can’t Ignore the Amazon Opportunity

Andrew Sandoval

September 4, 2018

In the ad world, Amazon isn’t in the same league as Facebook and Google. That’s because Amazon is in a league of its own.

Facebook and Google are where consumers often hear about brands and products, but Amazon is where they buy them. That’s a crucial distinction for advertisers. Some 75 percent of online consumers now shop at Amazon most of the time.

That means the company has an unmatched trove of consumer purchasing data. Such data combined with Amazon’s impressive reach has made Amazon become a burgeoning powerhouse in advertising. EMarketer estimates that Amazon will post $2.35 billion in revenues this year. That is still far behind Facebook and Google, but ahead of Twitter and Snapchat. Amazon has also vaulted to an early lead in smart speakers, claiming 66.6 percent of the category. Brands that want a presence in voice-based search need to be visible on Alexa.

While those are compelling reasons to consider advertising with Amazon, the company’s ad products are also compelling. Behind the scenes, Amazon has grown its presence in advertising via investments in inventory technology and data.

Here are four ad features from the company that could revolutionize your advertising:

Data & Audience Strategy

The Amazon Advertising Platform offers inventory buying powered by proprietary data. This can help drive repeat purchases by targeting past purchasers of brand/products. It can also reach current shoppers and identify among audiences who resemble past purchasers. Marketers can also combine Amazon’s data with first party (CRM and pixel-based) sources to build custom segments. The platform can expose previously unknown relationships between products. Amazon data showed consumers bought Reckitt-Benckiser’s Lysol and Finish together. The CPG giant used that data to advertise the two together and boost return on ad spend (ROAS) across its product portfolio.

Inventory Planning

Amazon has a large number of media properties. Those include movie database IMDB, gaming platform Twitch, fashion e-tailer ShopBop, home goods retailer Woot!, CPG e-tailer Quidsi and online shoe retailer Zappos, among others. But advertisers aren’t limited to those sites. The Amazon Advertising Platform lets marketers execute buys across third-party exchanges as well.

Product Search & Brand Discovery

A 2017 Raymond James study found 52 percent of consumers chose Amazon first for product-related searches. Meanwhile, comScore estimates that by 2020, 50 percent of all searches will be voice-based. With an early lead in smart speakers, it’s likely Amazon’s share of product searches will continue to climb. But the most valuable real estate, of course, is on Amazon.com. Amazon Marketing Services offers search ads at the top of the page and sponsored products in search results. It also offers ad units like right-rail ads on product detail pages. Not investing in these placements renders a brand invisible at a crucial point of sale.

High Impact Opportunities

Amazon constantly develops new ad units across its growing suite of consumer services and hardware. Most recently, Amazon has toyed with the idea of running Sponsored Product ads across the Internet instead of only on Amazon products. Amazon is constantly experimenting. As a result, it offers an eclectic range of ad units including custom display units, product pages and brand stores on Amazon.com. Other opportunities include Prime Video sponsorships and Kindle/Fire splash page placements.

Amazon has what it takes to be an advertising powerhouse. It’s got impressive data, an agile approach and a name that consumers love. Compared to Google and Facebook though, Amazon’s ad offering is relatively nascent . That’s not Amazon’s primary business — it will always be retail — but it’s a viable and advantageous offering. Marketers take note.