Why Amazon’s Advertisement Platform Proves to Be Serious Competition for Google and Facebook

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July 24, 2019

“The potential for disruption in the advertising industry is clear when you read that the worlds largest e-commerce marketplace opens itself up to allow brands to advertise on its very own platform”

It can be argued that Amazon benefits the most out of this opportunity as we all know Google earns millions every year by letting brands use their Search Engine as an advertisement platform. However, when looking at case studies such as a brand known through Shark Tank, which increased their sales by 203% (Amazon, 2019) or a toys manufacturer who managed to increase its revenue by 377% (RoiRevolution, 2019) through Amazon Advertisement, the benefits are shared either side.

Advantages of Placing adverts on Amazon

1. Amazons Membership Network

Around the world Amazon has more than 100 million Prime members (CNN Business, 2019). Given that you don’t need a Prime account to use Amazon, one can only imagine how many customers are using the online platform every day in total. In conclusion, brands will gain exposure to millions of customers through a well-established network.

2. Existing Brand Equity

Consumers know Amazon as a brand that they associate with values like trust, reliability and credibility. Using this platform can allow brands to feed off this positive perception to boost their own.

3. The Ads Are Being Displayed to Buyers Rather Than Viewers

When placing ads in Amazon, marketers can be sure to reach people who are actively looking to buy something, which makes the conversion rate and ROI much higher than on Google or Paid Social.

4. Lose Amazon as Bidding Competitor

I bet that most people who practice Paid Search at a professional level have seen Amazon showing up as a competitor in their Google Ads’ Auction Insights report at least once. It is natural for a big competitor, after all, Amazon essentially is a big warehouse and they are bidding on products which are being sold on the platform on one way or another. As one of the biggest revenue driving companies world-wide, we can also imagine Amazon’s media spend to be far greater than the amount a ‘typical’ brand would invest.

This again, most likely results in them having higher bids on all match types, especially broad match and BMM keywords, as the platform sells such a high variety of products that as a Paid Media scholar, the only plausible strategy for me, would be to bid higher on those match types in order to cover such a high volume of keywords. Therefore, it is very likely that Amazon purposefully or non-purposefully, will be bidding on your brand terms. Placing ads on Amazon directly will allow marketeers to shift some upper-funnel activity away from expensive non-brand search, to an environment where consumers have already expressed some level of desire or intent, increasing conversions and ultimately, ROI. This will be particularly effective for smaller, less established brands.

Overall, this type of Paid Media does challenge its original form into a new and much better targeted way of Paid Search which has shown its relevance in the contemporary practices of Paid Media.

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