As Amazon’s commerce and advertising revenues continue to skyrocket, the company’s enigmatic policies remain a core feature of the platform.
While leading digital ad platforms like Google and Facebook churn out regular product updates and constantly brief media and customers on policy nuances, Amazon keeps even its closest partners in the dark, according to several who attended this week’s Feedvisor Amazon Professional Sellers Summit in Brooklyn, NY.
“I advise all clients to be vigilant about remaining within Amazon’s terms of service,” said Phil Stolt, co-founder and CEO of the Amazon consultancy Ortega Group and a former Amazon executive. “The internal prioritization is what the outside world really doesn’t understand about Amazon.”
Amazon’s haze leaves even close partners unsure of how the company works, which has created something of a cottage industry for third-party Amazon marketing experts.
Dredging insights from friends and contacts still at Amazon has become a de facto differentiator among Amazon consultants, said Brad Moss, a former Amazon product manager who’s now managing director of the Amazon agency Product Labs. “It’s a part of the discovery and value we provide for clients.”
The lack of detail from Amazon – and the confusion that it can create – was on full display last year when the company launched Video Direct, a video monetization product for content creators. The initiative raised more questions than answers for even pilot partners about the connections between Amazon Prime’s media platform and the core Amazon marketplace.
The Amazon enigma “is now something that has to be built into how you look at the space,” said Kevin Mannion, CSO of the branding consultancy Advertiser Perceptions, earlier this year when Amazon unexpectedly emerged atop its DSP category benchmark.
The murkiness that clouds Amazon’s ad guidelines can benefit some of its sellers, but it can also tempt them into pitfalls.
For instance, many brands and manufacturers sell the minimum number of products to Amazon for platform resale specifically to unlock the advertising benefits Amazon offers to direct vendor partners. Those benefits include incentivized traffic and shopper data.
At the same time, Moss said, those sellers also maintain their own seller status in the marketplace.
One Amazon seller at the summit, who declined to comment publicly due to a nondisclosure agreement, follows the same plan. He sells a few products directly to Amazon to access advanced advertising tools, but said he feels uncomfortable “gaming the system” because of Amazon’s track record of suddenly flattening vendors who push the envelope on policies.
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Peter Kearns, a former Amazon business development manager and current seller consultant, said he recently asked an Amazon employee whether the ecom giant would close the loophole where merchants sell products to Amazon to access better ad tools. So far, Kearns said, Amazon doesn’t have an answer to the question.
But Amazon’s policies often change abruptly and unpredictably.
At the end of 2016, for example, Amazon pulled an unexpected about-face on its customer review policy by suddenly prohibiting incentivized reviews, a leading conversion driver for many resellers who can’t rely on brand equity to nudge consumers.
Amazon “doesn’t always push developer updates, so there is this constant fear among sellers about whether Amazon will shut them down or not,” Moss said.
The impression of Amazon as a Wizard of Oz operating behind the curtain distorts the fact that Amazon’s divisions often work in isolation or in contradictory ways.
“When I started at Amazon it was all about resellers,” Moss said. “Meanwhile, the guy next to me was developing brand registry.”
The brand registry product has shifted business directly to brands instead of marketplace resellers, who try to profit off the margins.
While Amazon’s marketplace seller services team view sellers as “second customers” after the consumers, Kearns said “there are other teams in Amazon that compete with that team and they don’t care about those sellers at all.”
One reseller said he nervously tracks Amazon’s growing business with brand leaders, such as the advertising and discoverability benefits given to strategic CPG and grocery brands that work with AmazonFresh or sell directly through Amazon.
“As a reseller, I know I bring value by lowering prices and raising selection in the marketplace, but brand owners are the fastest-growing segment and are the focus of internal investments right now,” he said, requesting anonymity because of a nondisclosure agreement.
Kearns said “there are definitely more tools being driven to the brand owner.” He expects new ad formats, such as thumbnail videos on product pages, to debut for brands later this year.
“There’s a lot of talk about the marketplace moving away from resellers to brands,” he said. “But it’s hard to be sure about that.”
