Published on March 1st, 2018 | by Sunit Nandi0
Amazon in Digital Ad Space: Formidable Force, Notes Robert Tallack
A lot of people think Amazon is well on its way to taking over the world, and, actually, that’s really not hyperbole. From publishing and media to retail, delivery and even healthcare, Amazon has become a disruptive force to be reckoned with in almost every industry it touches.
And don’t forget to add advertising to that expansive list.
Amazon has long been in the advertising business. Ads on its site help both customers and sellers. Plus the large amount of shopping data it owns can be leveraged so that sellers can zero in on customers who are most likely to buy online.
Last year marked a blitz by Amazon as it moved aggressively to demonstrate its growing influence and potential. “Right now, Amazon accounts for a very small piece of the total digital advertising pie,” explains Robert Tallack, who leads ConversionPoint Technologies, an e-commerce technology company that helps brands increase their e-commerce reach, revenue and return on investment.
“But Google and Facebook, which together account for almost two-thirds of the online advertising space, should be keeping an eye on what’s tracking fast behind them,” Robert Tallack adds. “Because Amazon’s ad business is exploding, and its strategy for winning puts it where Google and Facebook were a few years ago – the next new thing.”
Amazon stepped up its advertising game in several ways in 2017.
The company signaled its offensive by announcing plans to open a new office in New York City to focus on advertising. It will have a potential employee base of 2,000, comprised of teams that sell differently than other platforms in that they have a sales/retail cross-functional approach. Amazon also offers a rich variety of traditional and new digital advertising options, from search to newer video advertising and a new streaming service for entertainment.
That’s helped as Amazon has aggressively courted major advertisers like Mondelez, Procter and Gamble and Unilever. Better yet? The promise of “best-in-class” performance, and its decidedly sexy trump card of data. Facebook knows people and their interests. Google knows what people are looking for. But Amazon’s unique proposition is knowing what people buy.
Or, as Saurabh Sharma, Amazon’s director of programmatic advertising told Digiday, its big advantage is its sweet spot, where e-commerce and advertising meet. “It’s not only about being able to place ads in the right place and right time; it’s also the right relevance,” he said.
Tallack notes that there’s more to Amazon’s positioning that’s different, though. “It’s setting out to make advertising seem less like advertising, moving away from its more traditional forms to seem more natural and organic,” he says.
During a recent call with analysts to report a “blowout” fourth quarter, considerable credit was given by CFO Brian Olsavsky to Amazon’s advertising business. While its sales aren’t broken out, they are grouped in the “other” category, which jumped by 62 percent in the final quarter to $1.7 billion.
In a CNBC report, Olsavsky said: “Our strategy is to make the customer experience additive by the ad process. We want customers to be able to see new brands and have an easier time discovering products that they’re looking for. For brands, we think the value proposition is that we can find ways for them, especially emerging brands, to reach new customers.”