There’s an ever-growing opportunity for advertisers on Amazon, the commerce marketplace maven every retailer hopes to emulate (and simultaneously fears). The company has nearly doubled its global ad revenues since 2011, from $420 million to an expected $835 million this year, eMarketer estimates. If true, this puts it ahead of publishers like Pandora, Twitter, LinkedIn and Millennial Media.
Amazon runs paid media through its demand-side platform, Amazon Advertising Platform (AAP).
We spoke to several people about how it is bringing its paid media offering to market.
According to Rob Griffin, EVP and global director of product development at Havas Media, a number of electronic manufacturer clients use Amazon for reselling purposes, which can be a bit of a black hole.
“They get new customers, but they don’t necessarily know who they are, how [products are] selling or what the conversion rate is,” noted Griffin. “What’s interesting is, [Amazon has] rolled out these new ad products and these adjacent sort of publishing ‘offerings’ for consumers and now it becomes, ‘What if I made that data available to you?’” he said.
“To me, it feels like they’re going to the market and saying, ‘Let me see what else is out there,’” beyond Amazon doing what Amazon historically did best – hyper-relevant product recommendations and resales.
Amazon views advertising as an extension of the overarching Amazon shopping experience, said Vik Kathuria, managing partner of corporate strategy and digital investment at GroupM and MediaCom. “As long as Amazon stays focused here, our clients benefit,” he noted. “It’s still early days for Amazon in this space and for digital overall, but I believe there’s a lot of opportunity for innovation and we’re very excited to collaborate with them.”
Within Amazon Media Group, a number of ad products — ranging from Amazon sites to Kindle and mobile ads — are under development, but Amazon Ecommerce Ads hold the greatest data potential. Because of the dynamic interoperability of the units, such as the ability to read a review, add an item from a cart or clip a coupon, ecommerce ads could outperform standard banners.
“They’re valuable in putting Amazon shoppers back in the shopping mindset when they’re not on Amazon.com, or third-party sites,” he added.
What about Amazon’s pitch to the media agency?
“I would say they’re selling in a very black-box manner, much like the early AdWords approach,” commented Josh Wetzel, VP for media network and business development at Bazaarvoice Media, which competes with Amazon.
Wetzel added, “It’s black-box in the sense that you don’t get a lot of choice, but it’s compelling in that it’s like, ‘Hey, you know we’ve got 100 million uniques every month for shopping and we know who is a dog buyer/owner and we can guarantee that we’re going to target them. But, they’re pretty cagey about data in general.”
“I would say they’re very protective of consumer information in general,” he added, “but they do use it in as compelling a fashion as they can for the advertiser.”
For retailers, as long as Amazon keeps an air of transparency and discloses any overlap or cross-pollination between the customers it’s surfacing and the customers the retailer is gaining directly, Amazon holds unbeatable data insights. “I think that’s why they’re testing around as a publisher and with some of their rich media products,” Griffin said.
Similarly, Amazon could pull ahead in the attribution race. “If they open up their data pipes to their advertisers and we can pull that in to our clients’ DMP and combine that with direct revenue I’m driving to the website through paid media, all of a sudden they can show attributable value they’re bringing to the table,” Griffin added. “I think once they do the attribution element, they win.”
According to David Selinger, CEO of RichRelevance and a former Amazon engineer, “The part that’s going to be really explosive is the emergence of Amazon as a media player, which is going to be that exploratory, cross-channel, ‘Let’s advertise on our Collections page, our home page and on the Kindle,’ and building out these really unique bundles.”
