With many of us constantly checking out Amazon for its brilliant deals, it’s all too easy to see the company primarily as a retailer. However, with $2 billion of advertising sales last year, it’s now a significant advertising platform and shoppers’ default search engine. Marketers now need a compelling Amazon component in their strategic planning.
Traditionally Amazon has been considered as a retailer and part of the last stage in the consumer buying journey, with ad spend reflecting that. This now underplays how important an opportunity Amazon is. Chief marketing officers should leverage Amazon’s unique position as retail’s biggest channel.
Amazon Marketing Services
Amazon has Amazon Marketing Services (AMS), its pay-per-click performance marketing offer, only available to brands and vendors selling on Amazon and with ad placements solely visible there. It uses similar components from pay-per-clicks and Google Shopping. Formats include sponsored products, headline search ads and product display ads.
Where AMS differs from other biddable media channels is that brands can bid on both products and keywords, rather than focusing on products in isolation. This gives AMS a level of control that’s unprecedented from other major paid product-based ad platforms.
Here are seven reasons why AMS should matter to your brand:
1. AMS ads get high conversion rates
Most Amazon searchers already have an Amazon account and they’re looking for something specific. These are Amazon shoppers, so unless what they’re looking for is available much cheaper elsewhere, they’re going to buy it there.
2. Brands have more control
On Google Shopping, advertisers bid on products themselves and an algorithm organises the feed search term results. With AMS, you still have the products but marketers can also bid against keywords and search terms, instead of letting the platform decide this. This gives marketers more control and greater optimisation potential, which ultimately leads to increased campaign efficiency.
3. It’s cheaper than Adwords/Google Shopping
AMS is still quite new, and cost per clicks (CPCs) are cheaper, partly because there’s less competition for search terms in comparison to channels like Google Shopping. Conversion rates are also better as people shopping on Amazon usually buy there. This results in ad and bid costs being comparatively low, even with non-brand specific terms (as with Google ten years ago).
With lower ad and bid costs than Google Shopping combined with better ad optimisation, paid Amazon Marketing should be more efficient and deliver a higher return on advertising spend (ROAS). According to GroupM, 50% of investment is on sponsored products with the remainder split between headline search and product display ads.
4. You get more visibility for your products and can be there when consumers are
For brands advertising on AMS, the increased level of online real estate should lead to more sales and higher revenue, which is good news for brands trying to sell directly from their vendor site.
This gives marketers greater control, helps their products get seen and generate more sales. A combined organic and paid for Amazon strategy will see better sales over purely organic activity.
5. Paid Amazon ads will be prioritised, just like on Facebook
We’ve seen in recent years how other channels (Google and Facebook) have slowly started prioritising paid advertising, and as an ad platform, Amazon will be sure to follow. The successes from an organic-only Amazon approach will become increasingly limited.
6. Many PPC and biddable skills are transferable to AMS
The platform easily integrates into your brand’s broader paid strategy and tactical delivery should be relatively easy to implement with the platform’s similarity to other PPC channels. While AMS’ interface is more time consuming to run compared with established platforms such as AdWords, skilled PPC professionals will be able to deliver results swiftly.
7. Amazon is the retail giant
Amazon is the online retail giant, making up for 43% of US online sales and the fifth biggest UK retailer. Its reach is only set to deepen with its move into grocery (Amazon Fresh, buying Wholefoods) and its recent acquisition of US online pharmacy PillPack. Some might say that Amazon is taking away from the ecommerce industry but it’s probably more accurate to say Amazon wants to become the ecommerce industry.
Retailers and brands will soon find that a paid for Amazon strategy is essential. If you’re already selling on Amazon then you should consider AMS activity to support sales and customer acquisition.