With close to $280.5 billion in 2018 sales, Amazon has surpassed Google as the place shoppers go to research products.
Given Amazon’s massive audience, it should come as no surprise that advertising on Amazon has proven popular since the company officially launched pay-per-click advertising in 2012.
Yet while Amazon Advertising’s search offerings (Sponsored Brands, Sponsored Products, Sponsored Display) continue to provide brands with industry-leading Return on Ad Spend (ROAS), Amazon’s competitive marketplace requires brands to take a more sophisticated approach to advertising.
One of the best tools for brands to expand their reach is the use of Amazon’s audience insights. This demand-side platform, available to brands running Amazon DSP campaigns, provides a way for brands to reach shoppers based on their interests, behaviors, and demographics. Like many Amazon DSP offerings, Amazon’s audience solutions provide an amazing opportunity for brands to target their relevant audience and design a full funnel ad strategy to grow their brands.
What are Amazon’s audience solutions and how can brands best leverage these audiences?
Creating Target Audiences
The customer journey is nonlinear. A shopper might find out about a product through Instagram and research it on the brand’s direct-to-consumer website before visiting Amazon to read shopper reviews.
Brands can take advantage of Amazon’s deep understanding of consumer behavior, which will allow them to reach their target audience at different stages of the customer journey via Amazon DSP.
Amazon’s audience solutions are based on customers’ searching, browsing, and purchasing behavior across Amazon’s marketplaces. A marketer can retarget an existing customer base with Amazon advertising campaigns as well as create lookalike and new audiences based on this existing audience.
Multiple audiences can be combined in a campaign, and they can be used to target consumers on and off the platform.
For example, a furniture store selling mattresses can remarket to the customers who’ve already purchased a mattress and cross-sell them pillows.
Or, if an advertiser wants to promote and increase sales of their newly launched garden water timers, they can target the audiences who have been recently considering and browsing in the Gardening Hand Tools category.
Understanding Amazon’s Audience Solutions
Amazon audience solutions are comprised of 3 components:
- Audience Insights
- Amazon Audiences
- Advertiser Audience
Let’s look at each of these three in more depth
#1 Audience Insights
Brands can use audience insights to understand the makeup (such as gender, age, and approximate household income) and shopping patterns on the Amazon platform of their target audience.
Audience Insights allow brands to explore shoppers’ behaviors, deploying customized messaging and reengagement strategies. For example, if a brand’s audience has a significant number of affluent 25- to 34-year-old shoppers, a brand may consider marketing to tech-connected millennials. Audience insights also show which days of the week and hours of the day a brand’s top purchases are made. After looking at this data, a brand can use it to tailor campaigns or implement dayparting strategies to conserve budget and capitalize on shoppers during peak traffic timing.
This can be an advantage for brands that are new to Amazon Advertising, as it provides data around how customers search and purchase products on the platform. For brands that don’t sell on Amazon, this tool will not be as useful as some others, such as an overlap report.
Audience Insights help brands to get following key categories of data.
- Brand-level insights, which provide:
- Demographic information: Browsing and purchasing data by demographic profile such as age range, income bracket, marital status, and residential status. This allows brands to create customized campaign strategies and advertising messaging.
- Timing insights: Browsing and purchasing information by time of day and day of week. These insights help to explain seasonal trends and purchase timing, allowing marketers to formulate an appropriate strategy to ensure they reach their target customers.
- Purchase frequency: Allows for comparisons between repeat and single-purchase customers. Brands can use this information to look at the average length of time between purchases, which can be used to help drive remarketing and subscription enrollment.
- Consideration period information: Which gives brands a sense of how long it takes shoppers to go from category research to purchasing. This knowledge can help brands strategically plan the time frame for reengagement campaigns and promotions to target shoppers during the consideration phase.
- Overlap reports, which extend a brand’s reach to other audiences that intersect with the brand’s primary audience. The report helps to identify new overlapping audiences who may be part of the brand’s existing targeting type and extend the reach of the advertising campaigns to these new audiences. In addition, they provide an opportunity to customize the advertising messaging and creatives based on the interests of this audience.
#2 Amazon Audiences
Brands can use Amazon Audiences to slice and dice shopper data in different ways. Amazon Audiences allow brands an in-depth understanding of their shoppers, allowing for additional targeting and customized advertising approaches.
Standard audiences are “pre-built” and can be lifestyle, in-market, or demographic.
A lifestyle audience captures shoppers who frequently purchase from a certain category, such as exercise and fitness enthusiasts or people who are interested in health, fitness, and dieting. These audiences have shown interest in particular categories of products regularly which can be considered a certain lifestyle.
In-market audiences are comprised of shoppers who have searched, browsed, or considered making a purchase in a given category in the last 30 days. These activities indicate they are interested and engaging this audience could prompt a purchase. Some examples are people who are in market for fitness trackers or those who are in market for women’s exercise or fitness apparel.
A demographic audience allows a brand to target people with specific household incomes, age ranges, and other characteristics.
Brands can also look at audiences based on shopping interactions with Amazon. To do so, brands select activities such as keyword searches, detail pages viewed, or previously purchased products. Unlike the other audience types, this audience is only available through the Amazon DSP console to advertisers who sell products on Amazon and is used in the campaigns that link back to Amazon.
The Amazon DSP console also supports the creation of Lookalike Audiences based off hashed (or anonymized) audiences, audiences transferred from DMPs, and audiences based on visitors to your website also called Advertiser Audiences (see below). Lookalike audiences would have similar attributes or exhibit similar shopping behavior to a brand’s existing customer list, allowing the brand to reach consumers with similar interests in a more nuanced way than with demographic or category audiences from Amazon Audiences. A lookalike audience extends your campaign’s reach to consumers likely interested in your products.
#3 Advertiser Audiences
Using Amazon’s Advertiser Audiences give brands the chance to provide a consistent, cohesive shopping experience. This solution allows brand to incorporate their existing audiences into Amazon Advertising campaigns to drive relevancy.
There are three ways brands can provide data to build an Advertiser Audience group: through an Amazon pixel, hashed audience, or data management platform (DMP).
Pixel: An Amazon pixel can be placed on an advertiser’s website with regular traffic to track those customers for your Amazon groups. Brands can retarget or exclude shoppers from their Amazon campaigns based on the collected shopper data.
Once advertisers have placed the Amazon pixel on their website, the pixel automatically creates audiences in real time once the allotted amount of data has been collected. From there, brands can make lookalike audiences based on the pixel data.
Advertiser Hashed Audience: The advertiser hashed audience feature will generate a matched audience, as well as a lookalike audience based on the matched audience. Hashed audiences can come from email addresses or mobile advertising IDs that have been anonymized.
This matching process occurs within 24 hours. Once activated, these audiences can be used in advertising campaigns.
Data Management Platform: Brands can also choose to manage audiences by using a data management platform (DMP). Audiences can come from a variety of DMPs, including Nielsen and Neustar, among others. Brands working with one of these DMPs can securely transfer existing audiences for activation in Amazon campaigns.
How to Make Amazon’s Audience Solutions Work for Your Brand
In order to make the most of Amazon’s audience solutions, brands need three things:
Decent Shopper Data. It’s not worth the time investment if you don’t have something to bring to the table. Ideally, for a lookalike group, Amazon recommends a seed audience between 20,000 and 100,000 consumers. It should be said, though, that quality can supersede quantity here, so the best strategy is not necessarily to gather your largest group. Instead, a solid sampling of your most loyal customers can provide the best results.
Amazon Advertising Basics. If you do not already have an established Amazon Advertising strategy, and a little experience under your belt, you will not be able to use Amazon’s audience solutions effectively. Make sure you have the basics down for Amazon Advertising before launching into your audience groups.
Solid Understanding of Programmatic. Amazon’s audience solutions are built to be self-service, but the process is not simple. If you don’t have a strong understanding of programmatic, work with an agency that does.