If you are a large retailer not yet using Amazon Advertising already, unfortunately you’re behind the eight ball. Truth be told, even non-retail juggernauts not yet using Amazon Advertising will soon also fall behind the pack.
iProspect Chief Product Officer Mark Byrne predicted with confidence in his Future Focus Series that 2019 would be the year that Amazon shook up the digital world. After following this closely, I think we all agree that his prediction came true after just seven and a half months.
Why 7.5 months you may ask?
Amazon Prime Day this year was massive – I’m talking 175 Million items sold worldwide, kind of ‘big’.
To put this into context, there were more items sold during this year’s Amazon Prime Day than last year’s Black Friday and Cyber Monday combined. This comes even after Black Friday last year was touted as the biggest sales day ever! Each new “sale day” continues to trump previous e-commerce records, and I would confidently predict that the next Black Friday, will continue this trend, breaking further sales records.
Australian sales results mirrored this global success – reaching a massive $3 Billion in sales on Amazon Prime Day. Evidence of the success of Amazon’s Australian rollout isn’t exclusive to Prime Day sales. In fact, the launch of Amazon in Australia has been one of the most successful launches for Jeff Bezos, with his e-commerce giant Amazon recording a 1500% increase in sales last fiscal year.
Following trends in the US, users are also growing rapidly in Australia – making advertising on Amazon a must for marketers!
For any retail marketers out there, before you get your cheque books out ready to shift all your marketing budgets, there are a few things you need to know. As an early user of Amazon DSP (Demand Side Platform), I know that the Amazon Advertising platform is a powerful tool that has the ability to drive success for many Australian brands.
I also know that it is not yet completely primed for large-scale performance budgets. So, in this article, I will give my non-biased review of:
- Why Amazon Advertising is already a great tool for delivering client results (specifically the programmatic DSP)
- Areas of improvement
- My predictions for the next 12 months and why marketers should consider using Amazon Advertising
- Where I see Amazon Advertising in the next five years
1. Why Amazon Advertising is already a great tool for delivering client results
At present, Amazon Advertising currently lacks enough scale to take on big performance budgets, particularly when it comes to remarketing. However, the platform does currently have some amazing, unique functionalities that are already driving brilliant client results.
A walled garden with a seamless consumer journey
Apart from Amazon.com, Jeff Bezos’ group also owns other impressive sites and apps, such as Twitch, Audible, IMDB and Amazon Prime Video.
The pull of these sites provides Amazon.com with enough data to compete with companies such as Google and Facebook, making Amazon.com a powerful marketing partner to have. As well as this, Amazon has recently joined the Facebook and Google “duopoly” (now oligopoly) becoming the 3rd Walled Garden, owning the exclusive rights to their valuable inventory and datasets.
As Amazon’s consumers continue to grow, I find it hard to imagine many marketing plans that wouldn’t now include the 3rd Walled Garden.
But how has their data performed?
When advertising on Amazon, we heroed a strategy which ran across Amazon’s ‘Owned and Operated sites’ (O&O) – this proved to be very, very, efficient. It wasn’t just the data that made it efficient, it was due to the fact that consumers could engage in a seamless consumer journey – as often customers both start and finish their shopping experience on the Amazon site.
The benefits of this seamless experience speak for themselves: overall, Amazon Prime Day DSP activity drove a ROAS (Return on Ad Spend) of 540%– with broad prospecting O&O strategies driving 1200% ROI.
This wasn’t just a one-off. We also saw a scaled success in longer campaign periods – as we were able to maintain a detailed Cost per Page View of less than $1 for over 10 weeks and a cost per reach of $1.50.
Remarketing from two different Amazon ‘O&O’ Strategies saw a ROAS of above 700% and 1300%.
Exciting targeting options and features
Amazon Advertising’s unique targeting and features are also set to change how media is planned. The Amazon DSP allows you to target on a product level with the ability to include your competitor’s products.
Amazon does this by giving you the capability to target people who have engaged with specific products in the following ways:
- Viewed products
- Purchased products
- Similar products (lookalikes)
- Product searches of particular products
All you need is the product number listed on the site and you can create a custom audience based on up to 1,000 of your and your competitor’s products.
With ease, marketers are provided opportunities to better cross-sell, upsell and nail the moments that matter. For example, an electronics company like Phillips, Panasonic or Sony could cross-sell complementary products like speakers or home entertainment sets to individuals who have purchased their or their competitor’s products.
Mid-lower funnel power
Amazon has now overtaken Google in product searches meaning that people are using Amazon to both research and purchase. In fact, Amazon claims 87% of Amazon users go on their site to both research and purchase products – making Amazon a necessary part of the consideration and purchase stages of the sale funnel!
What is staggering about this, is often you can pay high costs for exclusive publisher data segments of ‘high intent’ purchasers. Amazon, on the other hand, has a list of customers’ purchase histories and can leverage customers’ actual purchase behaviours to provide ‘high intent’ segments that we can target – all and without the high cost associated with premium data partners.
Dynamic E-commerce ads will save creative budgets for performance activity and they perform well. Set-up merchants on the Amazon site can push creative live on short notice by activating Amazon’s ‘Dynamic E-Commerce Ads’.
These ads pull straight from your online store and don’t require creative agency turnaround time. While this solution doesn’t create high-impact ads that maximise brand awareness and recall, it can still be a short-term option for performance activity.
Additionally, there is an inherent value to having the Amazon logo on your E-Commerce ads, enhancing brand image and ad credibility when running ads offsite.
2. Areas of improvement for the platform
Apart from the scale on the platform, Amazon lacks quick and easy access to premium publishers.
Don’t get me wrong, the Amazon DSP has access to many (but not all of) the large exchanges you would find on other platforms like DV360, such as Rubicon and Appnexus.
However, currently setting up premium deals (like PMP’s and Programmatic Guaranteed Deals) programmatically – just aren’t that programmatic. They require more manual work to set up, at the help of your rep. The beauty about programmatic is the ease at which you can tap into, set-up and consolidate your broad range of buys.
An area which is lacking and potentially limiting to ‘above the line’ and ‘branding’ advertising that marketers would bring to Amazon.
Accessing premium deals isn’t the only place where robustness is lacking. From an agency perspective, the user-friendliness and intuitiveness are not as strong as DV360, Tradedesk and others – meaning things are a lot more manual.
In saying this, the Amazon DSP is less than one year old and the limitations I believe are ones that won’t hold them back for too long. In the last few months of using the platform, product updates have come quick and fast and the user-friendliness has improved.
Where the platform lacks, the client support from Amazon often picks up! In regards to scale and inventory availability, with the acquisition of Sizmek, the platform growth will only accelerate and inventory range will improve rapidly.
3. How I see the platform being used in the next 12 months
As we are all busy planning for Christmas, Amazon should be part of your plans. At the very minimum, in the next 12 months, retailers should be tapping into Amazon Advertising to maximise sales on large sales days like Black Friday, Cyber Monday and Boxing Day. Days where we have seen customers continuously go to Amazon to purchase.
If I were a retailer, I would personally have an always-on Amazon strategy currently running. There is a small window of opportunity, while not all retailers have capitalised on the Amazon, to not only stand out from the competition in your market but also get ahead.
Not only will you find a strategy that works for your brand before your competitors, getting in early also has certain algorithmic advantages.
For example, an always-on strategy drives interaction, purchases and finally reviews. Having positive reviews and bulk amounts of them on products will earn you favours when the algorithms optimise.
Therefore, starting an always-on strategy now will force your competitors to bid harder and smarter when they eventually do decide to join.
4. Looking to the next 5 years and beyond
Could Amazon be a genuine competitor with the other walled gardens of Google and Facebook? Yes, because they have something google and Facebook do not. They are a leader in E-commerce and have access to purchase data and intent signals that are on another level.
If consumption patterns continue to grow, in the next five years retailers and non-retailers will not be able to avoid the power of advertising on the Amazon platform!
In recent years, most companies have been trending away from having multiple DSP’s. But Amazon’s natural fit for ‘shopping and retail strategies’, will mean that retailers are forced to use multiple DSPs – unless other DSPs collaborate.
This is unlikely but not unreasonable to expect as we have seen a similar trend in paid search with the integration of Bing and Google into Search Ads 360.
For now, I urge all marketers to consider making the move to Amazon Advertising as soon as possible – and ride the growth of this tech giant in Australia.