Could Amazon Advertising Become A Formidable Rival To Google?

Very few tech giants can say they have decided to single-handedly go against the duopoly that is Google and Facebook in the digital advertising space, and actually manage to make a dent. We have witnessed this through the failures of Twitter and Bing Ads to even remotely make an impact as far as far as selling online advertising goes. Recently though, there has been a new entrant making a play for the market and judging by the headway this new player has made so far, Google and Facebook have a lot to worry about. This new entrant is none other than e-commerce and cloud computing titan, Amazon.

It might be early days, but some experts in the digital advertising field are already calling it – Amazon is the next giant digital advertising conglomerate. This is due to recent reports from surveyed digital ad agencies revealing that they have been shifting about 50% – 60% of ad spend initially meant for Google campaigns, to Amazon, making it the third largest revenue earner in the online advertising industry.

Let’s Explore Amazon’s Advertising Solutions

Contrary to popular belief, Amazon is not exactly a newbie to advertising products on its platform. They introduced a cost-per-click (CPC) program in 2012 called Sponsored Products, where merchants can bid on keywords to show their products next to search results. This led to a gradual upscale of their advertising business to a bunch of acronyms like AMG, AMS and AAP. Amazon Media Group (AMG) was the team that liaised with advertisers to access the advertising platforms Amazon Marketing Services (AMS) and Amazon Advertising Platform (AAP). In case you’re wondering why these acronyms are referred to in past tense, that’s because they were all recently rebranded to feature under one name, Amazon Advertising.

While this may suggest a drastic overhaul to their product offering, nothing has really changed much. There are:

1.

Sponsored Ads

Which are made up of Sponsored Products and Sponsored Brands. These appear on search results and relevant product pages, and when clicked, direct customers to an advertiser’s product detail page or store.
2.

Display Ads

Which aim to entice customers to take action through various creative and storytelling formats. The good thing about these is that they can reach an ideal audience using insights based on first-party shopping behaviour.
3.

Video Ads

Which aim to tell brand stories and engage customers in brand-safe environments and establish an emotional connection with them throughout their decision journey. The advertiser can showcase products and services by pairing video with display ads.
4.

Amazon Stores

Which allow brands to create their own website on Amazon with a branded URL. These can be used to showcase the brand’s story and product portfolio in a curated customer destination.
5.

Amazon DSP

Which is a programmatic, demand-side platform for advertisers to reach Amazon audiences. This can help with managing, optimizing and reporting on Display and Video campaigns through the Amazon DSP console.

Amazon vs Google Shopping

Let’s delve deeper into the differences between Amazon’s offering and Google’s offering.

Google Shopping is a product designed for online retailers, where they can create a Merchant Center account and upload their entire product data. The beauty of it is that when users search for specific products eg. running shoes, the search results page will show images and prices of the products from different online retailers above the organic search results. Having your ads shown in the results will depend on your bids for the keywords and your landing page’s ranking in terms of Google’s algorithm, which can be detrimental if your website is not that great.

Amazon, on the other hand, is already a highly trusted online retailer, where the appearance of your product ads depends on your bids only. This can be beneficial for advertisers who do not have a website yet. The other good thing about Amazon as a platform is that high purchase intent is guaranteed, due to it being an e-commerce website by nature. They can also guarantee brand safety, which a lot of people do not consider when advertising on Google.  What this means is, Google’s platforms have a lot of user-generated content eg. YouTube video channels, where a reputable brand is at risk of having its ads placed next to content which may harm its image and brand story. Whereas on Amazon, users are not yet allowed to generate content.

Advertisers are definitely seeing value in bidding for ads on Amazon. Whether this means, that Google should be worried and relook its business model though, remains to be seen.

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