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Amazon Advertising - Attracting Brands

Updated: Apr 23, 2019

Amazon advertising has broken all the stereotypes of advertising and has emerged as one of the biggest advertising platforms in the recent past. With its growing popularity, many brands have flocked their way towards them. The main reasons behind this are:

Direct sales data for clearer ROI:

Retail marketers find the dynamics from Amazon more compelling. Amazon is generally the place shoppers go to actually buy stuff, as opposed to simply discovering or researching about a product, the historic domain of Facebook and Google.

Retail marketers gave the edge to Amazon over Facebook and Google accounting on ROAS (Return on ad spend, or how efficiently ad dollars have been translated into sales), CPMs (Cost per mili, or actual expense of a user clicking through to a product), reporting, campaign management and attribution.

All these benefits have overshadowed the main reason of why brands are finding Amazon advertising more compelling. The main benefit is the clear return on investment (ROI). Amazon has the shopper data, it knows what actions the shopper took after seeing an ad (i.e. clicking on the ad or ultimately buying from a competitor), and whether the shopper actually converted the ad to a sale or not.

Amazon is getting better at sharing data:

A common complaint that has been made against Amazon is that, it shares only a small portion of the huge shopper data it has collected. There are signs that Amazon is recognizing that data like keyword volume, impression share and advertising placement is the information that advertisers need access to, in order to build out more campaigns and justify additional spend.

Amazon recently launched Brand Analytics in Seller Central, which shows the comparative rank of a given keyword, similar keywords, and which products received the most traffic and decisive sales conversions from each keyword. Previously, brands operating on Vendor Central would have had to take out a premium reporting package from Amazon to access this data. Now Amazon has simplified this process and deriving data from them is easy.

Access to Amazon’s power

Amazon has been credited for their large, affluent and active shopper base and these turn out to be the major reasons for the advertisers to flock on Amazon. While the primary reason for advertising on Amazon was related to Performance and ROI (17% of respondents), the next most common reasons were “Size of the audience available on Amazon” (16%), “target audience active on Amazon” (15%), and “Amazon’s users are in a purchasing mindset“ (14%).

Brands are finding that a portion of shoppers are so loyal to Amazon that they don’t consider buying something off the platform. These shoppers usually convert to be the net new business for advertisers, an audience that couldn’t be reached through other advertising platforms.

Suspicion still prevails in the minds of advertisers:

Some advertisers are expending money to advertise their products in search results, only for Amazon to show a pop-up promotion for their own private label product. Almost as many respondents cited their leading concern as being competition with Amazon’s Private Label products, compared with respondents citing competition with other brands being their primary concern.