The Rise Of Amazon Advertising

For so long in the digital media industry there has been a duopoly owned by Facebook and Google. Combined these companies make over 100 billion in advertising revenue each year, and with their enhanced data gathering methods they have been able to offer better more in depth products and services than any new entrant who enters the market. That is until Amazon launched Amazon Advertising.

Why is Amazon a threat? 

In the United States, roughly 50% of all ecommerce transactions happen on Amazon.com, Considering how big ecommerce is in America this is a staggering statistic. Generally in technology, New Zealand and Australia follow America’s lead, hence why business owners and marketers alike should be across Amazon ads.

What makes Amazon’s advertising product so powerful is that it has an enormous and detailed amount of ecommerce, and transactional data on all of its customers. It knows there buying habits, trends and demographics on such an intimate level as all this data is collected on their own servers. What this has allowed Amazon to do is create a product that is refined, direct and effective, and with such a large amount of all ecommerce transactions happening on the website, they have a direct entry point into the market that digital advertisers and marketers have to be wary of and ultimately across.

How much of the advertising market does Amazon currently own? 

As of 2019 Amazon became the third largest digital advertiser behind Facebook and Google netting close to $10 billion dollars in advertising revenue. They currently hold close to 8% of the digital advertising market in the U.S but this is expected to continue to climb throughout 2020 and 2021.

What are the types of advertising on Amazon?

There are three main types of ads you can configure and run with Amazon ads.

The first are search headline ads. These work much the same as Google Adwords, when you search for a product in Amazon you can pay to be at the top via and ad, this product works like an auction just as Adwords does, so the more bidders, the higher the cost per ad.

The other two main types of Amazon ads are sponsored product ads and product display ads. Both of these are types of display advertising and work much like display ads do on the Google Display Network. 

Summary

People often only think about Google and Facebook when creating their media plans and strategy. But in the United States and soon to be other parts of the world, Amazon ads will be a stock standard practice. Forward thinking and adopting a strategy around this for when it reaches your country (if it already hasn’t) is integral. Having a well thought out plan around this topic will keep you ahead of your competition and ensure continuous profits and ROI.

Published Date: February

Published by Alex Jordan