Could a Triopoly Be A Reality As Amazon Advertising Picks Up Speed?

Julia Blyumkin, Digital Dynamo

Why You Need To Consider Amazon For Your Digital Advertising Mix

It’s fairly common for business owners and entrepreneurs who provide services or solutions to consumers to approach us and say, “You guys do Google AdWords and Facebook Ads, right?” Of course, as a full-service marketing and ad agency, that answer is yes. But it’s less common to be asked by these same businesses whether we run campaigns through eCommerce giant Amazon Advertising.

Why? Well, it’s two fold. 99% of the online advertising marketshare is held by a duopoly where Google made $22.7 billion from advertising in the second quarter, while Facebook made $9.2 billion in this year alone. So, it makes sense that most brands have heard of these advertising channels and it seems to be a natural or logical fit to position their brand and service offerings in front of the masses who use Google and Facebook every day.

The common perception shared by brand advertisers and consumers alike is that Amazon is the go-to for anything product-oriented, but not necessarily services. If your brand sells tangible consumer goods that are already being sold through Amazon, you can pay to get your products listed higher or placed into sponsored positions. For brands who aren’t product sales-driven, advertising on the network at first blush may not seem exactly right. But it is and early adoption by advertisers is on the rise.

Amazon’s growth in the online advertising space is imminent with accelerated quarterly growth and ad revenues predicted to round out at $1.5 billion this year. Sure, this is give or take 1% of the online advertising marketplace, but for those early adopters, the playground is theirs to rule.

What About Data?

It’s no secret that Amazon is sitting on a mountain of data they’ve been collecting the last couple of decades. And while Google and Facebook have robust datasets as well pertaining to search queries, geographies, and preferred devices, Amazon’s model is founded upon the purchasing patterns of their customers, which takes consumer data to a new level. These models enable brand advertisers like you to optimize ad campaign targeting, so you can more optimally reach your potential customers at scale via the Amazon Advertising Platform (AAP).

As an example, you may be a lender, a real estate agent, or a homeowner’s/renter insurance provider. With Amazon Advertising you could position your company and services in front of consumers who are purchasing a large volume of homewares or appliances in a short period of time that may suggest they may be in the market of purchasing, renting, or remodeling.

If AAP Is So Smart, What’s Stopping More From Advertising?

The price tag. Unlike Google AdWords and Facebook Advertising which don’t require brand advertisers to make a significant upfront investment, especially if you’re running pay-per-click (PPC) campaigns, the same cannot be said for Amazon. If you’re going to play in the AAP sandbox, don’t forget to fill your pail with $35,000.

<h2<$35K – Are You Serious?

Yes. While Amazon offers a range of advertising solutions, at the end of the day, Amazon is looking out for itself, its bottom line, and keeping customers in their environment.

So, if you sell your products and services on Amazon already, the buy in is magnitudes less. But, if your services are not available for purchase on Amazon and you’re directing traffic away from the sandcastle, be prepared to bend the knee to this Khaleesi.

Bend the Knee GoT Gif

Will It Get Cheaper?

Hard to say. You have to admit, Amazon’s model makes sense. If consumers spend an average dollar amount during each visit shopping, how much of that dollar is Amazon willing to forego to let their visitor jump ship to a brand advertiser’s site? Reasonably hefty.

Google and Facebook monetize content to keep afloat. Yes, they have Google Shopping and Facebook Marketplace, but these are loss leaders that attract visitors and get more eyes on content. Amazon, on the other hand, has an iron fleet charting its many routes of return, with revenue-share from product purchases as its leading vessel.

It’s possible the upfront investment cost will come down some, but not so much that you can dedicate a $5 or $10 budget per day to run a campaign.

So, Do I Do It?

As an advertiser, you should consider AAP as the premier advertising solution for brand visibility meanwhile leveraging a highly targeted dataset. If you’re a B2B or B2C with a large ad budget, we encourage you to run a campaign through Amazon Advertising. The returns are promising.

And, if you’re ready to get your toes wet, but aren’t sure what kind of sand sifter or shovel to grab to mold your campaign into shape, we’re here to help!

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