Another year has passed, and as we look back on how ecommerce changed in 2019, we can attempt to look forward with Amazon Advertising predictions for the coming year.
Time is an inevitability, and so too it would seem is the expansion of Amazon into every nook and cranny of ecommerce. Amazon Advertising continues to gain ground steadily on Google, and has even surpassed it as the most-preferred option for demand side platform advertising.
An intensified focus on the B2B sales market saw Amazon Business profits increase tenfold from $1 billion to $10 billion over the course of only two years, with some believing it may soon become one of the company’s most profitable sectors.
But not everything went Amazon’s way in 2019: The disclosure that independent merchants account for 58% of gross merchandise sales on the site caused their perceived share of the U.S. ecommerce market to be fall by nearly 10%. And as for those independent merchants, their claims that Amazon charges them thousands of dollars simply to speak to account managers has drawn the attention of both the Federal Trade Commission and international regulators and lawmakers.
So, with all of that in mind, I’ll lead off with our biggest, boldest prediction of 2020: Amazon’s billion-dollar Lord of the Rings TV series will be a hot mess. The Tolkien estate has informed Amazon that they can’t use any of the material covered in the movies, so the show will need to exist within the less-densely described Second Age that takes place thousands of years before the material the general public is familiar with. In creating the content, Amazon must be canonical and consistently ‘Tolkienian’ without changing any of the boundaries set forth by the author in his appendices and histories. As Jeff Bezos has personally said of Amazon’s marketplace, “Third-party sellers are kicking our first-party butt. Badly.” Similarly, I just don’t trust Amazon’s ability to create quality first-party Tolkienian content.
All kidding aside, let’s get to predictions based on what we’re actually knowledgeable about here at content26: Amazon Advertising.
Amazon Will Intensify Focus on “Building Brands”
As evidenced by the Washington Post article above outlining Amazon’s tenuous relationship with third-party sellers, we predict this is the year the company starts clearly pivoting their focus towards empowering established brands selling on the platform. To do this, Amazon will stop labeling themselves as a “sales channel,” but rather a “brand builder.” The recent focus on branded Amazon Stores was the first step towards this shift in rhetoric. Moving forward, we believe that the biggest Amazon Advertising trend in 2020 will be their commitment to this idea by providing tools and products that brands can use to tell their story and extend their value beyond the channel.
This could be a particular boon for companies in the B2B market in which Amazon has taken a distinct interest. For manufacturing, industrial, and scientific businesses, sales have long involved analog catalogs and telephone calls, and as a result, many of these brands have a lagging or nonexistent web presence. The ability for these businesses to build their online brand at the ubiquitous ecommerce point of sale could be incredibly enticing.
The Importance of ROAS Will Be Downplayed
This Amazon Advertising trend is directly related to the first prediction. In Amazon’s view, the way that brands have traditionally looked at Return On Ad Spend (ROAS) is myopic. ROAS may be an important driver, but the long-term return on that investment is the building of a widely identifiable and trusted brand, which pays much greater dividends. We predict that 2020 will see Amazon beginning to stress the idea that focusing too strongly on the immediate return of ad dollars is short-sighted.
New Reporting Tools Will Be Introduced
If brands are truly going to use Amazon’s ad business to build themselves up, Amazon will need to provide those brands with more complete with better data insights. In addition to general additions and improvements to Amazon Store reporting, we predict Amazon will begin to provide much more granular details pertaining to sales information across product categories. They will also begin to let brands tag their search and social media ads so that they can see the impact those channels have on their Amazon sales.
The Product Page Will Start to Look a Bit More Social
Taking a cue from Instragram, Amazon is beta testing a new feature called “Posts.” This free-to-use service will “help shoppers discover new products and see what’s new from brands by browsing feeds of brand-curated content.”
Search result pages will also begin to look a little more like Facebook and Instagram feeds, with in-line video ads becoming available as an option for search advertising.
Tips for the Coming Year
With Amazon changing their focus to “brand building,” brands need to evaluate whether or not their Amazon presence is still merely a sales channel or the potential for something more. Regardless of what they choose, our general advice is the same:
- Make sure your content is consistent across all sales channels. Potential customers should receive the same high-quality product information no matter where they look, whether it’s your brand website or the Amazon product page. When customers don’t get the info they need, they don’t buy.
- Take advantage of enhanced content. It’s free for every vendor on Amazon to use Basic A+ modules. Any brand that doesn’t take advantage of creating an informative, branded product page is leaving money on the table.
- Make sure customers can find your products. Integrating search-optimized terms into all of your product copy ensures those items are visible on a crowded digital shelf.
- Use Amazon Advertising to boost discoverability. With an ever-expanding array of tools to find potential customers, Amazon Advertising has the ability to dramatically increase sales.
- Apply what you’ve learned. Don’t just set-it and forget-it. Use Amazon Advertising’s enhanced metrics to learn what’s actually working to improve sales and implement that data moving forward.