Amazon is ratcheting up conquesting campaigns, both as an ad platform and as a private-label brand operator.
Conquesting is when a brand tries to directly peel off a competitor’s customers or audience. It was a limited strategy in the old world of media and shopping, where there wasn’t much data to identify a rival’s loyal customers and malls wouldn’t allow, say, Banana Republic to distribute coupons outside of a Brooks Brothers.
But on Amazon, conquesting abounds. Amazon itself is the most aggressive conquest advertiser on the platform, with its private labels taking sponsored placements atop other brands’ own search results and product pages.
Conquesting comes with risks for Amazon, because it infuriates brands and could open the company to charges of anticompetitive action. But that hasn’t dented the growth of Amazon’s conquesting efforts or of Amazon ad platform features designed for conquesting, since Amazon is well-placed to steal legacy brands’ market share and conquesting creates fierce bidding wars that drive up ad prices.
Search conquesting
Search ads can be the most blatant form of conquesting.
Amazon recently caused a stir by advertising its AmazonBasics batteries in a huge splash above search queries like “Energizer.”
On the one hand, this is an example of Amazon eating its own dog food. Duracell could also take sponsored placements on a competitor’s keywords if it wanted to pony up.
Some brands are very aggressive, and are willing to take some losses to undercut a rival, said Rami Odeh, VP of digital commerce for the Omnicom shopper marketing agency TPN Retail. “Often they want to be the second-highest bidder, but in the process exhaust the competitor and create unprofitable sales.”
But Amazon also reserves some search conquesting tactics for itself. Many searches for a brand that Amazon has a private label alternative to will show a carousel of products like “Top rated from Amazon’s brands” directly above the fold, meaning a user doesn’t need to scroll the page to see it. Typically those searches might feature carousels like “Customers who bought this also liked…” or sponsored ad placements.
Amazon has a very strong sense of the value of being at or above the fold, said Brad Moss, managing partner of the Amazon ad tech startup Product Labs and a former Amazon ecommerce product manager.
There’s no option for a brand to buy its own top-rated product carousel or to prevent Amazon from pitching its private labels, Moss said. Even if a user explicitly searches for your brand, the organic search results are often pushed below the fold.
“The average consumer wouldn’t notice but we certainly do,” he said.
New search features
Amazon recently began testing search-based retargeting so that advertisers could target people across the web based on their Amazon searches. Previously, a brand had to get someone to transact or land on a product page before retargeting them – the opposite of conquesting – but search-based retargeting would open a new avenue for conquesting.
The search-based retargeting program is in a tightly controlled beta to prevent abuses and data leakage as Amazon fine-tunes the product. But it’s an important sign of Amazon’s plan to bring conquesting tactics (and prices) to more inventory.
“Amazon will eventually allow brands to conquest and defend Amazon keywords on non-owned media,” said one search agency exec participating in the Amazon retargeting beta, who spoke on background due to a nondisclosure agreement. “If anything they see it as a good time to advance these options because brands are more concerned about brand safety issues with social media, and are moving down-funnel because of that.”
Product pages
In the past six months, Amazon has also refined the data controls for brands to advertise directly on a competitor’s product page.
“It’s been a little more secret until recently when Amazon allowed you to boost your ad spend on other people’s pages,” Moss said.
Amazon doesn’t allow advertisers to target another brand’s product page by name, “(but) you can narrow down the targeting enough where you pretty much are pointing in the direction of a certain brand or brands,” Odeh said.
For instance, Amazon campaign reports show search keywords and pages where an ad was served, including the Amazon Standard Identification Number (ASIN), the number assigned to each product line, similar to brick-and-mortar stock keeping units. Since brands can manually connect the anonymous ASINs in their reporting to actual product lines, it’s possible to identify the pages of competitors where ads led to sales. And since brands can target by ASIN, it isn’t hard to hone in on a rival without targeting by brand name.
Smaller brands and Amazon’s private labels are particularly adept at the tactic, Odeh said. Large brands have hundreds of ASINs to track, so they aren’t laser-focused on exploiting one or two. Established brands also tend to have higher prices, he said, so targeting based on price is a way to offer cheaper alternatives on the pages of well-known brands.
“Conquesting in general is something clients differ on internally, since some have ethical stances and some don’t want to get into dueling budget battles,” he said. “We see it works though, and clearly so does Amazon.”
