Zach Morrison, president, Elite SEM
If there’s one thing all marketers can agree on, it’s that the advertising ecosystem is changing— and for an example of that change, look no further than Amazon’s shake-up of the known duopoly that Google and Facebook comprise.
Google started AdWords in October 2000, and Google has since become a giant of advertising, bringing in almost $95 billion in 2017. In the face of that dominance, it’s hard to imagine other players thriving, but Facebook entered the ad space circa 2009 and enjoyed 2017 revenue approaching $40 billion. Now, Amazon is joining the party to create a triopoly. It might be a few years behind, but the e-commerce giant still has the opportunity to make a lasting impression.
Google has a firm grip on search advertising, maintaining 90 percent of the space. Facebook’s specialty is mobile social traffic, of which they control about 80 percent. But with the biggest e-commerce store in the world, a popular streaming service, and arguably more data about customer purchase preferences than anyone else, Amazon is poised to carve out a significant swath of the advertising space.
In fact, 56 percent of shoppers looking for a product now start their search on Amazon instead of Google, and 63 percent of advertisers on Amazon plan to raise their budgets next year, which is a larger increase than either Google or Facebook.
Utilizing all three platforms doesn’t automatically mean they work together. Marketers need to leverage a truly integrated media strategy. Each channel comes with rich information that can be used to inform how to spend marketing dollars on the others. If, for instance, one of a company’s products is doing particularly well on Amazon, it would make sense for its marketers to shift its Google AdWords strategy to capitalize on that product interest.
Amazon’s emergence has huge potential, especially for e-commerce stores and online retailers. If you want to utilize Amazon’s advertising capabilities to reach a larger audience, consider taking these three steps:
1. Get comfortable with changing rules.
Amazon has begun to focus more on marketing and advertising, and it will be changing the rules constantly. Are you comfortable with that? The company isn’t like big-box retailers, where brands can build relationships with merchandisers. Amazon also opens the door for other sellers to acquire your product and resell it unofficially, and though that isn’t ideal, there’s not much you can do about it just yet. Selling on Amazon essentially requires brands to accept that many factors exist outside of their control.
2. Update your pricing strategy.
As with any new channel, it’s important for brands to update pricing strategies when implementing Amazon sales. This is an important marketing, merchandising, and brand perception decision that you shouldn’t take lightly. If done right, it can make a huge impact on your company’s bottom line. Consider keeping certain products exclusive to your e-commerce site or physical locations while offering others on Amazon.
3. Get help from experts.
Customers are using all three platforms—Google, Facebook, and Amazon—to learn, explore, and purchase. It’s important to approach each of these advertising channels individually but manage them cohesively. Each platform comes with its own set of strengths, weaknesses, and opportunities, so brands need to have an expert in each. These figures should be able to come up with individual strategies for the platforms they manage as well as communicate with one another to create a true integrated media strategy.
Amazon has slowly transitioned from a position as one of Google’s biggest customers to become a major advertising competitor. The e-commerce giant won’t completely take over digital advertising right away, but for many online sellers, it represents a promising new way to reach audiences.
Elite SEM is a digital agency specializing in performance marketing.
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