Have you ever wanted to observe the full spectrum of human emotions? Try asking a few marketers what they think about advertising on Amazon in 2019.
Very quickly, you will find responses vary greatly – to the point that you might not even think they are talking about the same thing… (they are). The most common responses I have heard are either brave excitement to conquer new territory, or anxious uncertainty about how Amazon is going to disrupt current strategies. I also hear from a lot of marketers who are frustrated because they can’t tell if their Amazon Ads “are even working.”
Here are some other tidbits that most marketers can agree on:
Amazon Ads is growing fast (+95% YoY in ad revenue for 2018) and is already disrupting the current Google and Facebook advertising duopoly.
Amazon Ads is here to stay (over $10 billion on Amazon advertising in 2018, forecast to grow to $38 billion by 2023).
Amazon is quickly becoming the first-place customers go to find your products (56% of product searches started on Amazon in 2018).
Amazon Ads isn’t fully “figured out” yet, leaving many marketers to experiment on their own.
Every product brand needs to be thinking about an Amazon Ads strategy.
The common thread between all the conversations is this: Everyone has questions – and most feel like they should be doing something on Amazon. Let’s unpack some of the most common questions that we hear at New Engen.
Should I advertise on Amazon?
If your brand sells products on Amazon, you should at least be thinking about how you will incorporate Amazon into your marketing strategy. For a lot of brands, including Amazon into their advertising budget makes a ton of sense (for example: retail), but just because Amazon is big and shiny does not mean that it is a good fit for everyone (let’s say, babysitting services). Just like any other platform, there are pros and cons to Amazon, and you really need spend time thinking about what role Amazon will play in your larger strategy before jumping in.
Before you decide that Amazon isn’t a good fit for your brand, you should know that Retail marketers estimated that Amazon received 14% of their digital ad spend in 2018, placing it third behind Google (21%) and Facebook/Instagram (19%). If that isn’t enough motivation to start taking Amazon ads seriously, then I don’t know what is.
When should I start advertising on Amazon?
It's different for every business, but we think you should start thinking seriously about if you should get on the platform as soon as possible. Timing matters because the businesses that learn how to win quickly on Amazon will secure an advantage over those who do not. We know this because past emerging channels like Snap and Pinterest were cheaper to experiment and learn in when they were still new. As the Amazon Ads platform matures and becomes more regularly utilized, auctions will become more competitive, increasing the cost of testing and experimentation. Businesses that are able to develop robust strategies and technology now will be able to thrive when the marketplace inevitably becomes more competitive.
We also know that historical performance matters on Facebook and Search, and suspect that it will start to matter on Amazon in the future. So, the sooner you get on Amazon to build out product and advertising history, the sooner you will establish a formidable position.
That being said, I don’t think it is wise to just start dumping money into Amazon in hopes of some magic result. Each brand should consider what success looks like for your business on Amazon and only increase spend when you are confident that it is working.
How much time and money should I invest on Amazon?
There is no one-size-fits-all answer to this question. If you are not already advertising on Amazon, then you should probably plan to dip your toes in sometime within the year. Given how fast Amazon Ads is growing, it is likely that your competitors are already learning the ropes, and you don’t want to give them too much of a head start.
If you are already advertising on Amazon (congrats!). But ask yourself this: Are you setup to quickly iterate and learn what works? We suggest you spend the majority of your time testing and iterating through Amazon capabilities to find what works best for your business.
We also think it’s really important to invest time into building out an excellent storefront. Throughout the rest of the platform, Amazon mostly strips your brand’s identity, but the storefront is one of the only places where you are in control of your brand’s presentation – and where you can build and maintain your brand equity.
What should I expect on Amazon?
Pro: Amazon Ads is still a relatively cheap place to experiment on Ads. We work with multiple marketers who are running a wide variety of tests to learn what works for their brands.
Con: Amazon Ads is a tricky platform to navigate through using the native Amazon tools. Not only do they have 5 different ad placements to choose from, but they also lack sufficient reporting capabilities to really understand what is going on. Their workflow and performance features are lightyears behind what is available in Google and Facebook, which frustrates most performance marketers.
What should I do next?
Step 1: Try to come to terms with that Amazon is likely going to be part of your advertising future.
Step 2: Think about a budget and timeline for when you will be ready to start experimenting on Amazon Ads
Step 3: Reach out to us at New Engen. We can help you work through the Amazon Ads questions, and have built cutting edge technology to help identify and optimize performance on Amazon.