Loading...

Amazon Will Dominate Online Advertising, If They Overcome This Hurdle

 

It’s not often that I discuss the technicalities of marketing in my Founder’s Notes. Instead, I focus on client/agency relationships, such as when I wrote on why brands must empower their agencies to fail; or marketing ethics, like when I wrote on why those who adopt gender stereotypes will face a precarious future. In the six months since launching Agency Scouts, however, there has been one question echoing around the offices of both brands and marketing agencies – is Amazon about to break the duopoly of Google and Facebook?

A recent eMarketer report revealed that Google and Facebook would remain dominant throughout 2017, with the two giants raking in 63.1% of all U.S. digital advertising revenue. This is 2.7% higher than eMarketer had previously forecasted, a surprising increase when you consider the brand-safety and ad fraud concerns that have surrounded both Google and Facebook in recent months.

eMarketer also forecasts that Amazon’s advertising revenue will increase from $1.5 billion in the current year to $2.4 billion by the end of 2018. Whilst still tiny when compared to both Google and Facebook, this growth is an indication of Amazon’s shifting focus from growing product inventory to encouraging sellers to invest into their growing advertising offering.

For me, however, the first indication of Amazon’s growing interest in strengthening its advertising revenue came at Cannes. Whilst both Google and Facebook maintained a dominant presence – with both ultimately securing a portion of the French Riviera’s beautiful seafront – Amazon also set-up shop in the Carlton hotel. Here they met with major media buyers, such as WPP and Publicis Groupe to discuss their advertising platform and the opportunity it offers their clients.

Whatever Amazon’s end goal is, they certainly have the capability to become a major player in the digital advertising arena. Not only do they have the platform to serve advertisements on, but also maintain a huge mass of consumer data outlining what consumers are looking for and have purchased previously. With almost 50% of all online shoppers heading to Amazon when searching for a product, this mass of data is continuing to grow and offers much more than the data provided by both Google and Facebook.

Having worked with brands advertising on Amazon, however, I believe that they must overcome another hurdle before they can truly disrupt the duopoly of Google and Facebook – ease of use. This is as both Google and Facebook’s advertising platforms are undemanding on business owners and marketers. Amazon’s advertising platform, on the other hand, is clunky and challenging for even the most technically adept user.

Beyond improving the platform, Amazon must also improve the level of service provided by their so-called ‘advertising specialists’ who seemingly lack the most basic understanding of the platform they promote. This is as it can be a truly painstaking process to get your inventory on the ecommerce giant’s site and then advertise it. This is particularly the case when selling certain categories of products, such as health and beauty items.

Should Amazon successfully simplify their advertising platform and improve the level of service provided to both sellers and advertisers, I have no doubt that they will forge a path through the digital advertising jungle and dominant. Not only do they have the 11th most visited website in the world to display their advertisements on, but they also maintain invaluable consumer data and a brand-safe environment.

Unlike Google and Facebook, users of Amazon.com can purchase products on the same website they are advertised to on. This limits the number of steps and therefore increases the chances of them making a purchase, increasing the value of Amazon and its advertising offering further for businesses of all sizes.

We may, therefore, come to find eMarketer’s forecast of £2.4 billion in advertising revenue to be a drop in the ocean by the end of 2018. Either way, brands must be considering the potential of Amazon and keep a keen eye on their growing variety of advertising options they offer. Equally, brands must ensure that their agency partner is as eagle-eyed and, if Amazon is already an important channel for their brand, familiar with developing and implementing strategies on Amazon as it goes through a time of change.

By | 2017-09-24T13:47:03+00:00 September 24th, 2017|Founder's Notes, Innovation|

Leave A Comment