For businesses operating in the e-commerce space, planning the paid advertising spend for the coming months and years has roughly involved the same few platforms. The majority of the budget will be pushed towards Google, Facebook & Instagram. Twitter, LinkedIn, Pinterest and Bing might be considered, but not with any serious amount of budget.
Fast forward to 2019, and there is a not so small platform that is commanding a massive shift in the deployment of paid advertising dollars and pounds. We’re of course talking about Amazon and their advertising platform that is not only growing at an incredible rate but is outperforming most other ad platforms.
The Amazon advertising platform certainly isn’t the new kid on the block. We’ve been working on Amazon ad campaigns for clients for the past 18 months and the platform has been around since 2014. During this time it has developed and evolved to become a must-have tool if retailers are to succeed on Amazon.
During a recent three-month period we created and deployed campaigns on the Amazon and Google ad networks. With comparable spends, we saw a £4 return for every pound spent on Google and a return of £18 on Amazon. You could ask the question, why are you not investing the majority of your budget into Amazon? And while that is a good question (and one I’ve debated a fair few times), it just wouldn’t make sense to (TL;DR a multi-channel/platform approach to digital marketing always wins).
In a recent article, Geek Wire reports that Amazons ad market share is projected to rise to 8.8%. While this is still behind the top two of Google & Facebook, it certainly represents the most-significant increase. The real report that we need to see are these figures broken down by e-commerce brands and where their advertising pounds & dollars are being spent. There is a strong chance that this market share increase would be more substantial in that sector.
As Amazon continues to grow it’s presence outside of its core offering (think, live sports, drone deliveries, voice products, and TV & movies) their customer numbers are going to continue to grow beyond its current active worldwide figure of 300MM. The UK market alone represents 40MM of that figure per month. More Amazon customers = more ad clicks.
Customer Shopping Habits
Not only has Amazon become synonymous with online shopping, but it has also well and truly changed customers shopping behaviours. Some savvy shoppers who pay their £7.99 per month for Amazon Prime will only purchase their goods through the site.
Customers are being exposed to products in both online & offline environments. Whether they have a need to purchase a product or there is a want to buy, they will embark on a regular shopping journey. Along the route to purchase they are clicking on Google ads, reading blog articles, speaking to peers and visiting a brand website directly. They are then going on to Amazon to convert. Why? Aside from the fact that Amazon has made it incredibly easy to purchase with their one-click-purchase system, customers have already in their mind paid for their delivery through Prime and didn’t want to pay ‘twice’ for delivery. Even if a retailer offers free delivery, a customer will almost always choose Amazon because it’s easy to complete the transaction and typically will arrive the next day. Add into the mix the convenience of Amazon lockers, it’s easy to see why so many consumers use the site.
Shoppers are wary of purchasing outside of the Amazon bubble. The choice they have is free next day delivery or wait two or three days by buying directly from a retailer? The majority of consumers are selecting the former.
Amazon Ad Formats
The entire Amazon platform can be a little challenging to get your head around if you’re exploring it for the first time. You can sell your products via a multitude of methods including fulfilled-by-amazon, fulfilled-by-merchant, and professional seller.
We’re going to take a look at the advertising options on the Advertising Console (formerly AMS). There are three campaign types available here:
- Sponsored Products
- Sponsored Brands
- Product Display Ads
These ads merely place your products amongst the search results. They can appear in the first few positions on the results page as well as being placed throughout the page as a user scrolls down. Much like how the first page on Google has become the only place to gain any traction, the same is true of Amazon.
Sponsored product ads can also appear on product pages further down the page in the section labelled ‘sponsored products related to this item’. This campaign type is incredibly easy to set up. Select which products you want to promote, select what keywords you’d like to target or let Amazon choose for you, and finally, select your bid strategy – again, this can be done manually or, Amazon can utilise a dynamic bid strategy on your behalf.
Sponsored brand ads appear at the top of a search results page and include a logo, text and up to three products. They are a great way of dominating key search result pages as well as showcasing your brand and key products.
Advertisers can direct users to the individual products that are featured in the ad, the Amazon brand store, or selection of products. When combined with a sponsored product campaign, it gives you the opportunity to take up a large piece of real estate on a results page. It also allows advertisers to muscle in on branded searches of their competitors. Search for ‘Nespresso pods’, and you’ll most likely see a sponsored brand campaign for Cafepod, a direct competitor of Nespresso.
Product Display Ads
This ad type targets interests and product types as opposed to keywords. Like any other display ad platform, they place image-based ads on category, product pages and search result pages. These ads are delivered on a CPC basis and include an image, product title, rating and a price.
While display ads can often be overlooked on most sites, they do seem to blend in seamlessly to the Amazon ecosystem. By targeting by interests and related products, brands can muscle their way into a product page and search results page which include their competitors. If you have a strong price point and lots of positive reviews there is a good chance a customer may head over to that product listing.
If you haven’t spotted them out in the wild already, you will no doubt see them sooner rather than later. In the exact same way that remarketing works on other platforms, you’ll see products that you have previously viewed in the usual ad spaces on certain 3rd party websites. Amazon allows three methods of retargeting:
- Promoted retargeting – target shoppers who visited product pages but did not make a purchase
- Brand retargeting – target shoppers who visited other product pages of your brand but did not make a purchase
- Similarities retargeting – target shoppers who visited similar or competitors product pages but did not make a purchase
Amazon is a different platform to Google. Obvious statements aside, users are performing searches on Amazon & Google for various reasons. Users on Google are typically researching & browsing. Whether they need inspiration, peer affirmation or actually to find a retailer to make a purchase, there is a longer period of time from initial search to conversion.
In contrast, Amazon is the final destination. Users either know the exact product they are after or know the type of product they want. Within a couple of clicks, they can have this ordered and on its way to their home the next day via Amazon Prime. When you add Facebook/Instagram into the mi which sees advertisers thrusting ads in front of users without them asking for one, you can begin to understand why the conversion rates on Amazon are so much higher.
We’re beginning to see a trend where a consumer search starts on Google and ends on Amazon.
There’s no need for advertisers to shift their entire ad budgets across to one platform and disregard another. But if you’re looking to launch a campaign to drive sales of a particular product, Amazon advertising wouldn’t be the worst place to invest the ad spend.