Industry reports say Amazon is encroaching on Facebook’s and Google’s stranglehold on the digital advertising market space. According to eMarketer, it was estimated that US advertisers spent $4.61 billion on Amazon’s platform in 2018, accounting for 4.1% of all digital ad spend in the US. That's still well behind Facebook’s 20.6% share and Google’s 37.1% in the No. 1 spot, but estimates have Amazon growing to 7.0% of the market through 2020.
So the question remains for digital marketers and advertisers: Should you take the Amazon plunge and invest in advertising on the platform? “If you are an ecommerce company and are selling a tangible product online, listing your products on Amazon and running Amazon Ads is a no-brainer,” said Josh Chang, senior marketing manager for acquisition marketing at HubSpot, whose team is using Amazon Ads in its marketing campaigns. “Even if you’re selling products directly on your website, Amazon and their ad products are another channel to reach people who might be interested in buying.”
Amazon Ads Growth
Many brands are jumping aboard the Amazon train, about 60% of digital marketing professionals responding to Marin Software’s State of Digital Advertising 2019 survey said they planned to increase their Amazon spend over the next year. Another 55% of them started using Amazon because they see it as a “significant growth opportunity.” And about a quarter said they want to increase purchases at the lower end of the funnel.
"The rise of Amazon as an Ad platform has blurred the lines between search, social and ecommerce, and now, a large portion of product searches begin on Amazon,” said Wes MacLaggan, SVP of marketing for Marin Software. “Amazon acts as a massive search engine that captures an attentive and purchase-ready audience, making it an enormous growth opportunity that brands would be remiss to not take advantage of.”
Related Article: A New Facebook Ad Metric Matches Spend Cross-Channel Experiences
Report: Amazon Campaign Management ‘Not Optimal’
It’s not all rosy in the Amazon Ad ecosystem for some marketers, about 37% of those surveyed by Marin Software said the campaign management tools on Amazon are not optimal, and 23% said the reporting tools are not as established as other channels. In addition, 30% of responding advertisers and marketers said lack of expertise with Amazon Ads is the primary reason why they are not yet using the platform.
Other significant findings from the report:
- 84% of respondents who use paid search (SEM) are currently using or planning to use Google’s new Responsive Search Ads format.
- 65% saying their company’s use of Shoppable images within search will increase in 2019.
- 32% of survey respondents reported that video is the most effective social ad format, followed by image ads (26%), Instagram Stories (23%) and carousel ads (19%).
Amazon's Ads Playbook
As for what kind of Amazon advertisements we are referring to, you won’t see Ads on your personal Amazon pages. Amazon Ads primarily consist of “sponsored” products or brands, according to Chang. The most common ad placements are at the top of or within Amazon search results, as well as on individual product pages. “So, much like Google Ads, you can target people searching for similar products to yours, and bid to have your ‘sponsored’ product show up at the top of the results,” Chang said.
Sponsored Search and Display on Amazon
Amazon has two broad categories of ad products: Sponsored Search and Display. Sponsored Search ads show up based on what a user is searching for or viewing on Amazon and are only for products sold on Amazon, according to MacLaggan. Amazon display ads help sellers drive more visitors and sales to their product listings using Amazon shopping insights, and can be for products or services not sold on Amazon. “One way to leverage Amazon Ads is via Sponsored Brands, which lets advertisers map campaigns to specific products,” MacLaggan said. “Amazon is crowded with brands working to stand out against the competition, and we’ve seen this Ad format perform effectively when advertisers use it to target audiences by advertising brands on competitive product pages. Sponsored Brand ads is a great way to generate brand visibility and protect a brand from competitive conquest.”
Sponsored Product Ads look similar to Amazon’s organic results, but they have a subtle “sponsored” flag attached to them, according to MacLaggan. These ads, he said, are keyword targeted and trigger when someone uses the Amazon search bar. “Sponsored Product ads are one of the most popular Amazon ad formats,” he said. “They are a great way for advertisers to try out various match types to get the right kind of traffic.”
Amazon also offers Product Display ads, which have similarities to Sponsored Product ads but offer a wider variety of ad sizes and formats. They are also popular because advertisers do not need to be an Amazon vendor to run display ads, since these ads can link out to the advertiser’s site, according to MacLaggan.
Related Article: Google Rebrands AdWords and DoubleClick to Google Ads
Why Amazon vs. Google?
But why break away from the tried-and-true? Google owns the market as we reported earlier. The keyword targeting on both platforms is quite similar, according to Chang, but the biggest advantage of Amazon Ads is the additional purchasing intent. “Personally, I go to Google to do research on things I’m considering, but when I go to Amazon, I’m there to actually buy something,” Chang said.
Amazon ads are likely cheaper from a cost-per-click standpoint, too. Because there are so many advertisers on Google, both with and without tangible products, the competition for some popular keywords can be fierce, sometimes in the $30 to $40 per-click range, according to Chag. “Amazon ad keywords are generally cheaper,” Chang said, “plus it’s easier to measure your ROI when you’re looking at everything on the same platform.”
What gives Amazon an edge at capturing ad dollars is the fact that the conversion occurs right there on the Amazon platform after the user clicks on the ad. For the most part, Google directs traffic to the advertiser’s website where the conversion later takes place, according to MacLaggan. “The reality is that many people start their purchase journey on Amazon, and brands can’t afford to ignore Amazon’s melting pot of customer demand,” he said. “The platform captures a rich store of late-stage buyer intent and conversation data and offers that data to advertisers with a high degree of transparency.”
Where Do Marketers Begin on Amazon?
What's the first step for marketing/sales teams in making an Amazon Ad campaign work? Determine that yes, you do have potential buyers on Amazon. “That is probably true for most companies selling a product,” Chang said.
From there, it is “super important” to have a clear outline of what products you want to sell, what categories you would put those products in, and what specific keywords are the most relevant on which to bid. “Similar to Google, Amazon really cares that the keywords you bid on are relevant to your product, so if you’re selling running shoes, it wouldn’t be in your best interest to target a keyword like ‘ski boots,’” Chang said. “Having an organized campaign structure will help later on as you start seeing results come through. Don’t just have one campaign and one ad for all your products. Try to stay a little organized.” Test different products, keywords and Ads. “The name of the game in PPC is experimentation,” Chang said, “so make sure you set aside some time to prioritize testing on all your ad platforms, including Amazon, so you can continue to improve results.”