By Zuhur Ahmed, Digital Acquisition Specialist
Amazon has steadily increased its share of digital advertising spend over the past few years and is now sitting in third position with 8.8% of all digital ad spend in the U.S. happening on its platform. We review what makes it a performance marketing channel and why brands should consider a presence on the retailer giant’s website.
Amazon has steadily increased its share digital advertising spend over the past few years and is now sitting in third position with 8.8% of all digital ad spend in the U.S. happening on its platform. It is quickly closing the gap between its closest competitors, Google and Facebook — both experiencing loss in market share due to marketers transferring budget to Amazon. Growing Amazon advertising to it’s now 10 billion dollars in revenue was the result of the site’s massive amount of daily traffic (half of all internet product searches) combined with already having a built-in advertiser base made up of millions of third-party merchants. The expansion of this advertising platform has given merchants and brands the opportunity to stand out of the crowds of products in front of buying-intent driven consumers. In this article, we’ll provide a run-down of why brands should consider a presence on Amazon.
The U.S. Amazon website is ranked as the top website worldwide for shopping, while its German, Japanese, and U.K. counterparts are the 6th, 7th, and 8th respectively. As a retail brand, it is nearly impossible to ignore the size of this giant and the access Amazon gives to customers, driving over 2.6 billion website visitors the month of January 2019 alone. Amazon also has over 100 million worldwide Prime subscribers, a yearly subscription that provides free shipping and access to certain deals which encourages customer loyalty and repeat purchases to make the $99 price tag worthwhile. 85% of Prime subscribers visit the site once a week and 45% make a purchase. In 2018, 54% of consumers used Amazon for their first product search surpassing Google. Even if the purchase is not ultimately conducted on Amazon (i.e., through a different website or offline) consumers use Amazon’s search engine to read reviews, research products and price compare.
We’ve established the importance of a presence on Amazon, but leveraging their Advertising platform can amplify that presence to drive sales by helping customers find your products – search engine marketing alone is no longer enough if you want to be found by your customers. Amazon’s advertising platform is an effective way for getting your product in front of customers at different stages in the funnel thanks to the various ad types and targeting methods offered. The Sponsored Brand ads allow brands to reach customers as they research and discover products as it targets customers using broader categories while consumers research products. In the lower stages of the funnel, sponsored product ads allow targeting based on specific keyword queries once the consumer is at a higher intent stage of the purchasing funnel. Amazon also shows the ads as bundles with products the user is already looking at, which gives brands ample opportunities to reach the target customer at different stages in their path to purchase, or while researching complimentary products.
It looks like Amazon’s importance in the digital marketing landscape is only going to grow as more dollars shift towards the retail site and they build out the advertising platforms capabilities and ad formats. The sheer volume of customers on the website, as well as their targeting and advertising capability, makes Amazon an ideal performance channel for retail brands.