AMS – What do we know now?

Intro

56% of US, UK, German and French shoppers use Amazon as a starting point for shopping and 22% say that they ‘won’t look anywhere else if they see a product that looks suitable on Amazon’.[1] With an already highly qualified audience, it’s unsurprising that Amazon has been evolving to make its advertising offering unignorable, making the $806+ billion dollar company even more profitable. [2] While AMS is far from a new platform, the last 12 months have seen a 60% growth in ad revenue. [3] As such there have been a plethora of commentators vocalising their predictions about how the platform will continue to perform and what it means for the future of digital advertising. But what do we know now about the platform as it has evolved?

Benefits for advertisers

Aside from a welcome alternative to the existing duopoly of Facebook and Google, there are a range of reasons why agencies and brands are finding budget for AMS activity

Audience: advertisers can place products in front of a handpicked audience who are actively looking to buy
Ranking: ads can appear above organic listings
Design: sponsored products blend into organic search naturally
Device: Amazon’s investment into their mobile site and app means that advertisers can show their ads in a friendly design on all devices
Brand page: Amazon offers the option to brands of creating their own branded page within the ecosystem. Ads on the platform can link to brand page and immerse users into that brand through a third-party environment where the infrastructure already exists to make this an easy process
Purchase journey: Amazon’s one click to purchase online or via the app makes the purchase process simple and seamless
Consumer loyalty: Amazon is a highly reputable platform which alongside all the above factors creates a gravitation pull to purchase from this platform
Fulfilment: If wanted, Amazon takes care of storage and delivery and customers have trust in being able to contact Amazon if any one these are below expected standards

Ad formats

There are 3 main ad formats which Amazon offer to promote individual or groups of products. Used in conjunction with each other, these can provide a strong digital presence on the platform

1.Sponsored products: create campaigns with a number of products (Amazon recommend 3-10) and use keywords you want to target these keywords with (you can also select to let Amazon auto target customers based on product information). Amazon will match the product it deems most relevant with the search query and ads can appear in the top 3 positions of the page, or the last 3. These ads flow naturally into organic listings and there are multiple spaces available. They are the easiest to set up and are usually approved within an hour.

2.Headline search ad: these cover the top strip of the search results page. Users can add in their brand logo, a headline and show 3 products. You can also use these to click through to a separate page with more products on or a brand page (can be a good solution if a brand page isn’t yet created).

3. Product display: these ads are product or interest targeted and appear on relevant product pages. These can be an effective way to target specific competitor products when users are one click away from a conversion. In the below example two different products are advertised, one across the horizontally across the bottom of the screenshot,and the other in the bottom right corner.

Current obstacles

While we have seen some excellent results for our clients currently running on AMS, advertisers do need to be aware there are some limitations to the platform at present. Fundamentally Amazon is playing catch up with more established platforms and their functionality.

Reporting: Reporting functionality is still limited. There are no capabilities yet for device, location, time of day. As outlined above, with headline ads we can promote a number of products. Whilst we can see the sales and cost of sale attributed to the keyword in the interface, we can’t yet see this data at product level. You must have specific access to be able to pull this report into an excel
Eligibility: an advertiser or agency can’t just sign up and start advertising straight away. You must receive the ‘buy box’ on your products which confirms you are an eligible seller
- This can however also be seen as a benefit to stop unqualified sellers from advertising on the platform and driving costs up whilst driving user experience’s down
Product ratings: whilst Amazon ads boosts products above organic listings, from our experience in running them poor product ratings, or low product ratings due to a newly launched product or range, still has a detrimental affect on performance. Whilst paid ads can help exposure of products, the organic optimisation of them is still crucial as ratings on all ad formats remains very visible, as with their organic counterpart
Ad scheduling: There is no option to show ads on certain days or certain times of the day. This means advertisers must pace their budget throughout the day without it running out. For advertisers with smaller budgets, this can be challenging
Bulk changes and reporting: these advanced features are only available to certain sellers so for smaller sellers, manual changes can be time consuming

Amazon in the wider digital landscape

Whenever discussing the ins and outs of AMS, we must also recognise that this is just a small part of Amazon’s advertising capabilities and overall marketing functionality. From user (app) acquisition, off-site media buys via their 1^st party data, VOD or even their somewhat-maligned foray into social with Spark, Amazon is sitting on huge potential in the ad space. They own and control all the requisite aspects of their digital supply chain: the user base; the ad inventory and – hugely important since GDPR – their own high-quality 1^st party data.

Conclusion

The digital retail space is developing rapidly (especially considering last year’s events between Google and the European Commission [4] plus Facebook’s continuing development of its retail proposition) and with advertisers being forced to diversify their channel mix, Amazon is a platform which can’t be ignored. Whilst there are a few downfalls and limitations with the platform, as we’ve seen with others, it will develop and grow. With half of online shoppers starting their search on Amazon, any agency with retail clients will need to, if not already, start assessing their Amazon position. As the retail arena continues to grow digitally, Amazon will be a key player in media strategy.

[1] https://searchengineland.com/report-google-beats-amazon-product-search-reach-rival-sees-greater-loyalty-282570

[2] https://www.gobankingrates.com/making-money/business/how-much-is-amazon-worth/

[3] https://digiday.com/marketing/amazons-ad-business-grew-60-percent-quarter

[4] https://techcrunch.com/2017/09/28/google-tweaks-search-ads-after-eu-shopping-antitrust-ruling/