Amazon's 'complex' ad business may still confuse marketers, but it will push into video and display next year to grab ad dollars from Facebook and Google

jeff bezos amazon

  • Amazon is gradually taking on Facebook and Google's dominance in digital advertising.
  • Observers expect Amazon to boost its video, display and search ad products in 2019 and possibly even launch a search engine to take on Google.
  • Even big brands that don't sell their products on Amazon are spending more there on brand-building, but marketers say that the e-commerce platform is still difficult to understand.

Amazon has long been an e-commerce giant, but it's quickly becoming a growing advertising force.

Marketers view Amazon as an alternative to the growing control that Google and Facebook exert on digital advertising, and mounting evidence shows that Amazon is slowly beginning to chip into the duopoly's clout. Research firm eMarketer estimated that Facebook and Google would collect 57.7% of US digital ad budgets in 2018, followed by Amazon in third place at 4.1%.

Amazon execs are notoriously tight-lipped on the company's financials, but advertising is increasingly popping up in earnings. The word "advertising" was mentioned 12 times in the company's third-quarter earnings call, up from nine in its second-quarter call.

This year, Amazon consolidated its ad business into a single brand and is reportedly building out an ad network for Fire TV.

Read more: One of Google's biggest spenders says there's a hole in Amazon's ad business

While the rebrand was meant to group all of Amazon's advertising into one place, marketers still struggle to understand the company's sprawling amount of ad units across search, display and video.

"A lot of their products are built in silos, and now they're saying, 'OK, let's try to bring it together,'" said Todd Bowman, senior director of Amazon and eRetail at Merkle. "It still is a very complex space though — there is explanation and education that needs to go into that."

Still, Amazon's trove of data that details what consumers buy, search for and look at outside of Amazon gives it a massive edge, say marketers.

"No other partner right has the level of depth from a consumer knowledge standpoint," said Sargi Mann, executive vice president of digital strategy and investments at Havas Media. "We're definitely seeing an active trend of marketers getting comfortable with the idea that it's not just a performance platform, it's a brand awareness platform as well."

Big brands that don't sell stuff on Amazon are starting to get on board

Amazon has long talked about the potential for "non-endemic" brands on its platform outside of its core retail and consumer-packaged-goods advertisers. Non-endemic brands don't sell items on Amazon — like financial services, automakers or travel agents.

This year, marketers got a hint that those brands may finally be testing advertising on Amazon, signaling that ad business is becoming more important for brand-building campaigns.

But because these brands don't sell items on Amazon, they're getting more creative with campaigns that use insights about consumer behavior.

"I don't think it's purely as an ad-buying platform," said Mann. "I think it has a role as an audience intelligence platform as well."

In November, Audi worked with Amazon to dole out surprise test drives to Amazon Go shoppers in Seattle, and one shopper won a trip to Audi's headquarters in Ingolstadt, Germany.

The Audi campaign is an example of how big brands are carving out specific ad budgets for Amazon, said Eric Heller, CEO of WPP-owned Marketplace Ignition.

"It used to be that there was a brand, e-commerce and direct budgets, and what we're seeing is, a lot of that is melding," he said.

Video will be a big deal for Amazon in 2019

In August, Amazon began experimenting with video ads in mobile search results and is betting big on its rumored ad-supported Fire TV app in 2019, sources said.

"Amazon has increased the inventory that they have," Merkle's Bowman said. "It's almost like they're starting to get endless opportunities with Fire TV [and] the streaming capabilities that they have to put high-impact ads out there for some of those brands in non-endemic categories."

Amazon's push into video advertising signals that it wants to be a bonafide advertising player, but the e-commerce platform is complicated for retailers. Brands that sell on Amazon need to handle all the basics of e-commerce like fulfillment and merchandising in addition to running paid ads.

"While video is exciting, the vast majority of brands have so much low-hanging fruit that they can still fix," said Marketplace Ignition's Heller.

amazon box

It could launch its own search engine to take on Google

One way that Amazon has chipped into ad budgets this year is through encroaching on Google search. CPG brands are shifting budgets from Google to Amazon because people search for specific brands when buying commodity goods.

For that reason, Amazon could consider building its own search engine next year, predicted Mark Douglas, CEO of SteelHouse, an ad-tech firm that provides media-buying tools to brands.

"Right now, Amazon's search business is clearly in the context of a shopping experience," he said. "I think the interesting thing would be if Amazon encroached more on search."

Amazon's ad network is gaining traction

Amazon also runs a programmatic-like ad network that places ads on websites outside of Amazon, much like Google DoubleClick Bid Manager.

Agencies say marketers are seeing more interest in that arm of Amazon's business because the ads are served using Amazon's lucrative first-party data about consumers.

Trevor George, CEO of agency Blue Wheel Media, said that roughly 30% of its clients ran ads on Amazon's demand-side platform (DSP) this year. He expects that number to hit 70% next year.

With the ad network, brands can hit a wide group of consumers across the internet who may not be immediately looking to buy something.

"Getting access to Amazon's display program provides access to a unique network that's exclusive to Amazon," Merkle's Bowman said.

Join the conversation about this story »

NOW WATCH: 6 airline industry secrets that will help you fly like a pro this holiday season



Contributer : Tech Insider https://read.bi/2Su9Bzm
Amazon's 'complex' ad business may still confuse marketers, but it will push into video and display next year to grab ad dollars from Facebook and Google Amazon's 'complex' ad business may still confuse marketers, but it will push into video and display next year to grab ad dollars from Facebook and Google Reviewed by mimisabreena on Friday, December 28, 2018 Rating: 5

No comments:

Sponsor

Powered by Blogger.