Amazon’s prime day sale has just ended but the company has unveiled a huge surprise; this time for the vendors and retailers. The company is all set to go headstrong against the duopoly held by Google and Facebook. Amazon has great plans for its upcoming venture that will make advertising simple and profitable.
Advertising plays an important role in online business. With millions of people using the internet simultaneously, ads can be the perfect way to attract customers. There are many ways a brand can advertise its products and Amazon aims to simplify them for a holistic solution.
Amazon has a large amount of data owing to its supremacy in the e-commerce domain. This data can be used by brands and vendors to improve their marketing strategy. Even though Amazon allows brands to advertise on its own website, with a completely dedicated advertising wing, brands can expect a higher conversion rate.
In September the company simplified its branding by merging Amazon Media Group, Amazon Marketing Services, and Amazon Advertising Platform under the name “Amazon Advertising. The company’s boss Paul Kotas said at the time that the move was meant to make the company’s ad options “simple and intuitive for the hundreds of thousands of advertisers who use our products to help grow their business.” However, this merger may not simplify things much for an outsider with less or no knowledge of Amazon ads.
There are numerous things that give Amazon a superior edge than its competitors Google and Facebook. To begin with, Amazon has sponsored ads that share the same functionality as Google’s have a better conversion rate. The reason attributed to this increased conversion rate is, Amazon has an audience that comes with the intention of shopping or purchasing a particular product.
With ads displaying on the same page as the searched product and in the right spot, the customer is more likely to see the ads and purchase the product. Advertisers have to bid on particular terms and the one with the highest bid gets the spot. This is “the simplest way to start advertising,” Amazon says on its advertiser-facing website.
Advertisers can also buy sponsored ads listing which can help customers discover their products. For instance, if a buyer searches for Nike shoes, the sponsored ads of a new brand or other brands such as Puma, Adidas, Reebok, etc may show up. Amazon also has other types of ads such as ‘display ads’, where ad images pop-up while visiting Amazon’s website, Kindle or third-party websites. There are also video ads that play on Amazon sites such as IMDb and Amazon’s Fire TV.
Advertisers use a tool called a “DSP”, or a “demand-side platform” and Amazon has its own third-party advertising tool named “Amazon DSP”.
Amazon’s advertising wing has been performing well with high conversion rates and reaches offered to the advertisers. However, the numbers are currently moving at a steady pace, as the advertisers have been spending cautiously on the platform. The services are expected to improve as Amazon has recently acquired Sizmek’s Ad Server and Sizmek Dynamic Creative Optimization that will enable advertisers to create tailor-made ads pertaining to the location and behavior of the customer.
With the evolution of Amazon’s advertising division, brands can expect a fair rise in conversion rates and implement new strategies to outperform their rivals. This can be a golden opportunity for vendors to increase the sales and utilize their advertising budget more profitably.