What Is Amazon Advertising? Should You Use It?

by | Nov 26, 2019 | Thoughts | 0 comments

Amazon Advertising was launched in 2018 and is the updated version of Amazon Marketing. Amazon Advertising is a pay per click (PPC) ad platform similar to Google’s and Facebook’s systems. In this article, I’ll explain what Amazon’s platform is like, and what kinds of businesses can use it.

Amazon Advertising, which I’ll call “AA” for short, is a new venture to build up the ecommerce giant’s revenues. Amazon is notorious for operating at a loss, either underselling the competition or investing its income on projects to grow its reach. Now that the company has built up its database of consumer habits, brands and marketers can use it in their marketing.

AA can power PPC ads anywhere from Amazon’s website, to Kindle ebooks, to follow-up emails, to display ads on other websites, and video ads on Amazon, FireTV, and other sites. Online ad marketshare is currently dominated by Google and Facebook, but experts predict a time when Amazon will be a third contender (“‘It Will Be Google, Facebook and Amazon’: The Year In Amazon Advertising.”)

Amazon Advertising For Sellers

The first obvious type of business that can use AA are product brands that sell directly on Amazon. “Sponsored Ads” are paid spots that appear in the product search results. According to Hubspot, you can set either broad, phrase, or exact keywords, and your items will appear, with priority given to the highest bidders on those keywords.

“Sponsored Brand Campaigns” are ads for multiple products by a company that are displayed together in the search results. The product limit is three, so you should pick the ones that reflect your current promotion the best. Sponsored Brand Campaigns lead to a specially designed landing page for your Amazon store.

“Product Display Ads” appear in areas of Amazon’s page other than the search results. They can also appear in emails for abandoned carts, follow-ups, and recommendations. The idea with Display Ads is to cross-promote products, using “Interest Targeting,” and reach people searching for related-but-not-the-same items.

“Amazon Stores” are your brand’s own dedicated pages, hosted by Amazon. This is a direct competitor to Shopify and WooCommerce, in that you can design your own product pages and carts. Amazon will handle the web hosting and fulfillment. It would be your job to market the goods.

“Video Ads” and “Native Ads” can appear on Amazon’s website and devices, as well as 3rd party sites like news and blogs. For many years, Amazon has been Google’s top advertising client, and Amazon sellers have used Google and Facebook’s ads to reach customers outside the site. Amazon probably hopes AA will make the company independent.

Non-Amazon Sellers

Digiday theorizes that businesses who don’t directly sell on Amazon can also use Amazon Advertising. According to its article, “How Amazon Is Readying Its Blitz On The Ad Industry”,

Amazon is increasingly trying to pitch to what the company dubs “non-endemic” advertisers — brands that don’t sell on Amazon. Asked what he considers a challenge, [director of programmatic Saurabh] Sharma mentioned that push, adding that it’s not really a challenge, but an opportunity. Non-endemic advertisers would cover, for example, brands in categories like cable, wireless, airlines or restaurants. “There are opportunities to bring that value,” said Sharma.

“How Amazon Is Readying Its Blitz On The Ad Industry”

Similar to the Product Display Ads that sell products that are indirectly related to product search terms, Video and Native Ads on outside websites can sell services like insurance or contractors. Using Amazon’s network of consumer data, a business can target web surfers based on what they’ve shopped for. For example, CNBC suggests if you’re a bathroom repairman, “You might like the information Amazon has to target people who are buying things like grout and hammers.”

Is Amazon Advertising Right For Your Business?

It’s easy to see large brands benefiting from AA as they have the war chests for large ad campaigns. What about smaller businesses and startups? As with other PPC advertising, it depends on your niche. Success in marketing requires finding the precise keywords your customers are searching with, or the right demographics and geography to match your buyer profile.

Businesses that sell products and want to utilize Amazon’s fulfillment services will get the most use from AA. If you’re a dropshipping or direct to consumer (D2C) business, you can use Amazon’s native and video ads, but Amazon will see you as a direct competitor otherwise. Your best bet would be Google, Facebook, or even Pinterest.

Until Amazon’s Native and Video ads appear on more 3rd party websites, a service-based business should stick to Google Ads. Google My Business is a great free service that will get you seen in your local area. Also, customers who are looking for a particular service are more likely to start their search on Google, meaning they’ll be more motivated to use you. The one advantage Amazon has right now is it’s not as competitive or expensive. However, there are other marketing strategies such as search engine optimization and social media citations.

Looking Ahead

The previously mentioned CNBC article says Amazon is expected to have 8.8% of the digital ad market share by the end of 2019. The Motley Fool says Amazon’s total revenue should be about $275 billion, with advertising making $9.8 billion of that, or less than 4 percent. Still, it’s advertising division is growing faster than that of any other company.

You should also consider the growing use of ad blocker apps, and the growing use of influencer and affiliate marketing. In previous posts I discuss running a business outside of the major tech giants, and web traffic without Google and Facebook. I’m not entirely against Big Tech- I run Google Ads on my website, and I just published my ebook on Amazon Kindle. My hope is that we’re not so dependent on these companies and we have real choices in our marketing.

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