Amazon Advertising is exploding and helping to lead the charge for the fastest-growing channel in marketing, Retail Media, with 49.8% growth in the US in 2020 compared to the year before.
Amazon Advertising presents a unique opportunity that very few truly understand. If you think it can simply be managed like any other marketing channel, you are completely missing the boat.
Find out how you can take advantage of the full Amazon opportunity in this white paper, Winning on Amazon: The Amazon Advertising Opportunity for Brands Explained.
Recently, I hosted a webinar with Skai Retail Media’s VP of Client Success Kevin Weiss on this topic. Called “Getting a Grip on Amazon”, we went into detail on Amazon Advertising to provide even more information and context around the details shared in the report.
In today’s post, we recap some of the key points presented in that webinar to help marketers understand the path to success with Amazon Advertising.
To win at Amazon, you must think like Amazon
The first major point we presented in the webinar for marketers to understand is that Amazon is unlike any other digital advertising publisher. Unlike Facebook and Google in which the majority of their revenue comes from advertising, Amazon’s ad division is just another one of its billion-dollar businesses. Amazon is a major retailer, an Emmy-winning television producer, a device manufacturer, a web-services provider, and runs countless other profitable ventures.
Because advertising is a sliver of its total revenue, the key thing to remember for marketers is that Amazon’s focus is on the customer, not on its advertisers. Famously, Amazon’s goal is to be the “world’s most customer-centric company.” If you truly examine Amazon’s rise to glory, it’s because it has focused on the customer experience first, knowing that loyal customers will always come back to buy.
So, you too must abide by that code. Maintaining items in stock, fulfilling shipping quickly, keeping prices low to encourage customers to buy, and other similar things are how Amazon grades you.
Use Amazon to build your brand, not just immediate sales
Sure, Amazon Advertising is a fantastic bottom-of-the-funnel channel that reaches shoppers while they are in an online store. However, marketers who just think of this opportunity as a direct response channel are truly missing the boat.
Don’t just think about driving clicks to purchase. Think about how you can use it to build your customers by getting your product into their hands. 50% of Amazon customers are open to new brands or products, so why not use price sensitivity as a way to “buy” market share.
Amazon shoppers use the store not just to shop, but to research purchases too. Use this chance to get in front of consumers. Remember, one of the realities of today’s complex market is that there aren’t “net-new customers.” Businesses today must win customers away from competitors while protecting their customer base from being taken by rivals.
Amazon Advertising should not just be pigeon-holed as a “last mile” tactic. It can be used all across the funnel to influence and impact shopping behavior.
Four challenges of Amazon Advertising
Remember, to do business at the scale that Amazon does, it must employ sophisticated algorithms to help manage and monitor its business. Advertisers that don’t meet Amazon’s requirements around customer-centricity may even have their ads pulled. This commitment level requires not just the marketing team to stay on full alert, but also the Sales and Operations teams working closely together.
New ROI models are needed to align with how Amazon sees the world. This may require a mind shift to new metrics such as:
- Lifetime value
- New to Brand
- Repeat customers
Adapting to the new normal of business won’t be easy. Most brands don’t have the deep analytics and data needed to make rapid, data-driven decisions. Marketers need to look outside of just their advertising campaign data (clicks, impressions, etc.) to better understand how they match up to competitors.
Amazon is in the business to make money. With so many similar, competing products in its catalog, it’s safe to assume that the ASINs that generate the most profit for Amazon will have a leg up in the algorithms. That means both velocity of total sales as well as the individual margins made on each product.
Want to truly win with your Amazon Advertising program?
Leading brands & agencies rely on Skai for advanced optimization and cross-channel analytics to drive massive omnichannel growth. Unlike any other retail media platform, Skai Retail Media is backed by robust, world-renowned shoppable media engineering and experts who know exactly how to advise and lead your commerce evolution in the digital era.
Simplify retail media with advertising on every retailer that matters, find your optimal mix, and win big with full retail intelligence. All in Skai Retail Media.
To learn more, please reach out today to schedule a quick and easy demo.