Amazon Advertising Growth: What Brands Need to Know

Google’s Eric Schmidt said in 2014 that Amazon was the company’s biggest competitor, and his premonition is still true today. Amazon is fast rising into a realm that has previously been dominated by Google and Facebook: advertising.

While Amazon is not even close to seeing the revenue that Google and Facebook garner from ad spending, it is quickly becoming an advertising channel brands cannot ignore. More people begin product searches on Amazon than they do on Google, and Amazon is opening the door for brands to capitalize on this fact.

Where are Amazon’s advertising services at today, and how should brands take advantage of this innovation?

shopping in the era of Amazon advertising growthAmazon Advertising Today

Amazon Advertising Growth

During last year’s Q4 earnings call, Amazon posted a line item for “other” revenue that showed a 60% increase in 2016. This revenue line covers co-branded credit card agreements and “certain advertising services.” Adam Levy of The Motley Fool points out that Amazon’s credit card has been around since 2002 with little change, giving the majority of the credit to Amazon advertising growth.

As advertising on Amazon takes on greater importance, Amazon’s CFO, Brian Olsavsky, sees advertising and consumer goals working together.

“Our goals there are to be helpful to customers and enhance their shopping and viewing experiences, mostly with targeted recommendations,” Olsavsky said… “We think that’s a good strategy rather than invasive things that take away from the shopping experience.”

Amazon has Valuable Data and Engaged Customers

Advertising is a fast-growing segment of Amazon’s business for a reason. Although the company is not likely to catch up to Google or Facebook’s ad revenue in the next couple of years, the value of its services lies in the type of data Amazon possesses and the intent of consumers seeing the ads.

The specifics of what a user owns or wants to own are unique insights the online retailer has to offer.

“Google knows what people are searching for. Facebook knows what people like and who their friends are. Amazon knows you searched last week for running shoes, but also that you bought a pair a year ago,” write Alistair Barr and Jennifer Saba on Reuters. “That kind of information has advertisers salivating.”

Pair that knowledge with consumers who arrive on the site already contemplating a purchase, and you have an incredibly strong foundation of knowledge and intent.

What Types of Advertising Does Amazon Offer?

Amazon has had small ways for brands to advertise in the past (things like inclusion in an email blast), but the key new area of growth is in Amazon Marketing Services (not to be confused with Amazon Media Services, which is the parent branch to the marketing services group).

AMS allows brands to run keyword-targeted ad campaigns. These are pay-per-click ads that can appear in three ways on the site: as a product display ad, a sponsored product, or a headline search ad. They can be platform-specific and they can appear on sites outside of Amazon.com.

Ad campaigns on Amazon also come with key performance metrics. Read more on Amazon paid campaigns here.

Amazon Marketing Services spurring Amazon advertising growth

Take Advantage of Amazon Advertising Growth

Here are three steps you can take to capitalize on Amazon’s self-service advertising.

Lay a Foundation

Before you launch your first paid campaigns, make sure your product pages are worth driving people to. If necessary, update your essential content, including the product title, bullets, basic product description, and main product images.

You will also want to add enhanced content to your most important products. Enhanced content covers lifestyle images, videos, 360 views, comparison charts, and additional details about the product.

Advertise

Now’s the time to raise the discoverability of your products by strategically implementing paid campaigns. Use ads to drive demand for products; since Amazon primarily rewards clicks and sales with higher search placement, paid ads can help your products rise through the search rankings.

Be careful to avoid the pitfalls of automating or forgetting your content.  As your marketing messaging changes and your products’ needs change, you will want to update your ads and content to match.

Fine-Tune Your Strategy

All that great data we mentioned earlier? This is where it comes into play. Monitor your metrics and adjust your strategy to get the most out of your AMS spend. Once your campaigns are over, you can take your learnings back to your product-page content for continuous improvement.

The Takeaway

The industry has taken notice of Amazon advertising growth. Take advantage by preparing your product pages for the spotlight, setting your AMS campaigns, and using your learnings to improve as you go.