Amazon is becoming an increasingly important player in the Dutch e-commerce market. Sales grew 40% last year, according to the Twinkle100, putting the webshop in sixth place. Figures from NoBo show that the monthly (unique) reach is 3 million. And there is no official Dutch webshop yet. If Amazon really comes to the Netherlands, this offers opportunities for numerous advertisers. After all, Amazon is more than a webshop or e-commerce platform. It is also a media platform like Facebook or Google. I was inspired at Dmexco by experiences in the U.S. and Germany.
Number 3 in ad spending
After Google and Facebook, Amazon ranks third in ad spending worldwide. While in 2016, the e-commerce platform still earned less from ads than Twitter. Since then, Amazon's ad revenue has nearly quadrupled to 5.8 billion.
As an e-commerce party, Amazon is growing fast because they have everything; from drugstore items to electronics. Not surprisingly, this is the starting point for 50% of Americans and Germans when they search for a product. In addition, Amazon is growing fast as an advertising platform because they have the most information about buying behavior and interests of their users. Therefore, in 2014 Google already saw them as their biggest competitor in search marketing.
Why advertise?
If you sell products on Amazon, advertising seems necessary to stand out in the almost endless supply. In fact, on the search results page, ads are at the top, followed by Amazon's Choices (over which you have little control as a seller) and only then come the organic search results. Basically just like on Google. It may even be that the entire first page consists of Sponsored Products. So it does require advertising to be somewhat visible.
One advantage of advertising on Amazon compared to well-known online channels such as Facebook and Google is the higher conversion rate. This is because people are already much more in a buying mood than on Facebook or Google; after all, they come to Amazon to buy something. In addition, they need to click through less often to actually purchase the product. A practical advantage is that conversion tracking and attribution are already all set up.
Where consumers generally find ads irritating this does not appear to be the case on Amazon. 90% of visitors do not realize what is sponsored and if they do realize it they find it relevant and useful.
Advertising Opportunities
Search
The first way to advertise on Amazon is search-based. This can be done both at the product level with Sponsored Products and at the brand level with Sponsored Brands. Here you can target specific keywords, which can be targeted exactly or broadly, just as with Google. In addition, you can also advertise on a product category or even on specific products, such as those of competitors. Finally, there are the extensive "Product display ads".
Sponsored products can be used to improve your organic ranking, which is useful, for example, if you are launching a new product.
Display
In addition, Amazon is a DSP (demand side platform) on which you can purchase display banners programmatically just like through Google Ads.
These banners are then placed on Amazon's website including IMDB or their devices. In doing so, you can target by location, demographics, buying or search behavior (lifestyle) and in-market audiences. Retageting and targeting look-a-likes are also among the possibilities. This makes it an interesting advertising platform for every part of the customer journey from awareness to conversion goals. What surprised me most is that you can also place banners on sites outside of Amazon.
By the way, the banners should have an Amazon look and feel. That often ensures a higher CTR because people trust Amazon and they know where they will end up when they click. Good to know is that high quality inventory and brand safety are important pillars for Amazon. This is because placement with sensitive content can also have a negative effect for them because the banners refer to Amazon.
Video
While many publishers are fully committed to video ad positions, this is still quite small on Amazon. However, the opportunities to advertise with video are expected to grow. And if they want to compete with Google and Facebook, they will have to.
For all
At first I thought Amazon advertising is only interesting if you sell through Amazon. Until it became clear that you can also link display campaigns to your own website with so-called link-out campaigns. This makes Amazon advertising interesting for all kinds of advertisers who want to make use of the mountain of data Amazon has on its users. For example, insurance companies can target people who buy new expensive equipment. Or telecom providers can target people who want to buy a new phone. Or think of colleges that can reach young people who buy exam bundles to win over the last doubters. This makes Amazon potentially the biggest challenger to Facebook and Google.
The black box
One downside, however, is that Amazon does not share anything with advertisers of the knowledge they have about users. You don't get to see data about the context of a click, such as time, location, device or who is clicking (interest, purchase history, demographics). So there is no way to optimize on that, something that can be done very well within Facebook and Google. But the expectation is that they will eventually release this to further compete with Facebook and Google.