Do you need an Amazon advertising strategy?
By: Mo Dezyanian
Tags: Advertising, Marketing, Amazon

E-marketer recently reported that Amazon, is the number 3 Digital Ad platform in the US. Right after Google (37.1%) and Facebook (20.6%). With its 4.1% market share, Amazon has now passed mighty Oath, and Microsoft.

There are many reasons for this, one of which is an accounting change at Amazon. Nonetheless, here’s the reality that should get your attention — Amazon is sitting on a massive amount of data that they will be looking to monetize through advertising.

As a strategist, they should be on your radar if they weren’t already. Next question: Do you need an Amazon ad strategy right now?

What problem can Amazon ads solve for you?

Let’s start with the nature of the Amazon marketplace, and what sets it apart from Google and Facebook. Once you have a grip on those two things, you can answer the question of whether Amazon needs to be in your advertising mix.

Direct to consumers

Amazon is, of course, primarily an online marketplace for consumers and brands to sell product. To help your product rank high in Amazon search results and get the attention of your prospects, the company provides a number of paid solutions — sponsored postings, video formats, and more.

But Amazon doesn’t just own the Amazon domains, it also has other major websites such as IMDB.com. So naturally you can advertise your products there, too.

What does that mean for you?

Simple. If your business has a direct-to-consumer relationship, i.e. you sell products directly to consumers, Amazon ads are something to take note of. And if you don’t you have to ask yourself if your product should have a direct to consumer relationship. Typically, this applies for CPG type brand who want to bypass or augment the retail distribution model. It allows them to supplement sales without investment in e-commerce and to avoid costly shelf-space wars.

What that looks like in terms of Amazon strategy and how that works with your Google and Facebook strategy is to be figured out by your marketing team. A little more on that below.

Target markets

But Amazon’s true advertising strength comes from its data. “Today over 54% of product searches that occur on the entire internet occur on Amazon,” says Bloomberg Technology. To put it another way, Amazon has a massive, ever-growing treasure chest of detailed data on online purchase behaviour. Combine that with the data garnered from its hosting arm over the years- AWS and you can get an idea for Amazon’s scale.

Their established position and their data are the true power of their advertising platform. If you believe that you can find your target market by extrapolating from their actual purchases or purchase-intent behaviours, you’ll have the right fit with Amazon.

For example, for one of our clients we knew that people who are interested in musical instruments and accessories would align well with our target market. So we picked up Amazon as an advertising channel.

That doesn’t mean that your ads will be on Amazon directly. It means you’ll be using Amazon insights to serve advertising throughout their owned platforms.

How does it compare?

Following, the framework we take my clients through to help with decision-making on Amazon advertising.

Google primarily has data about the next moment:

What is one person looking to do a moment from now?

Where are they going to go?

What are they looking for?

Of course, Google has more, but this is a good place to start from a mental model perspective. The question to ask is: Do you want to catch your consumer in the very moment when they want or need your services? A classic example is a person shopping for a new car. Your ads need to be present when a prospect is doing research and moving through the buying process. No surprise, search advertising is a stable pillar in the automotive marketing mix.

By contrast, Facebook’s strength come from data about habits, interests, and their connections. What does one person read? What do they like? What do they enjoy? Who are they connected to?

To understand the appropriateness of this channel for your service/product, ask yourself: Do I know precisely who my target market is? What do I actually know about them demographically and psychographically?

By contrast, Amazon has data about purchase intent — what do people want to buy and what have they bought. Now you have to decide whether past purchases and purchase searches are a stronger predictor for your brand or, for instance, online searches. The answer is likely a combination of both.

And that’s just the beginning

With Alexa, WholeFoods, and Go Stores, Amazon now offers access to voice search data, retail shopping habits, and food consumption behaviour — all in one space. And make no mistake, all that data will be eventually monetized.

So. Will you have an Amazon ad strategy?

Update: Amazon Tests Search-Based Retargeting, The First Time Its Search Data Leaves Its Walls