More money than ever is being spent on Amazon by consumers. This should come as a shock to no one as the retail giant has benefited from a global pandemic that has caused a lot of traditional bricks and mortar retail to spend a large portion of the year closed.
Last month Amazon released their earnings report and saw their revenue in 2020 increase by 38% YoY. An impressive feat, but it’s not Amazons frankly, unsurprising overall revenue figures that caught my attention…
Amazons earnings report
Buried in their earnings report was the often ignored ‘other’ revenue category. Most of this category consists of advertising revenue, which many competitors such as Google +8.98% and Facebook +21% saw small to moderate increases, especially compared to previous years growth. Manufacturers and advertisers are clearly taking note of Amazons success and spending more on advertising on Amazon than ever before. A
Many will put this down to a unprecedented year and consumer buying habits shifting temporarily, but the data suggests otherwise. Our friends at WARC have conducted research of over 1,000 marketers and found that one-third expect to spend even more on Amazon in 2021.
Why it matters
Advertisers ignore the shift in customer spending habits and advertising investment at their peril. Amazon search results and product pages are some of the busiest and most competitive places to buy advertising space.
As you can see in the screenshots below, in the search results for ‘Samsonite Suitcases’ not one Samsonite product can be seen above the fold. Trip are competitor targeting for sponsored brands (the bar at the top) and Amazon Basics, Eminent and Antler are showing above the brand that is being searched for in the sponsored products space.
On the product page it’s a similar story. Straight away it is clear that competitor brand Eminent are buying Sponsored Display on the Samsonite product.
Further down the page, before the product and brand description there is a whole host of different competitor brands buying advertising space on the Samsonite product page.
What brands can do about it
To those who are selling on Amazon but not using their advertising feature all of your hard work is just providing your competitors with advertising space for low sales funnel customers in a desirable category. Would you leave your brand terms and pages unprotected for competitors to target in any other advertising channel? Of course not.
But fear not, there are some simple steps (in order of priority) that you can take to protect your brand, bid on your categories advertising space and if you’re feeling bold target competitors and complementary products or brands.
1) Bid on your own brand keywords to protect your brand in the search results using sponsored brands and sponsored products
2) Use sponsored products and sponsored display to protect your product pages
3) Target generic keywords that describe your product category with sponsored brands and sponsored product ads in the search results
4) Target competitors products with sponsored products and sponsored display ads
5) Target complementary products (eg sound-bar on tv product pages or belts on trousers product pages)
If you want to find out more about Amazon advertising strategy, solutions, algorithms and content opportunities on Amazon I hosted an Amazon Advertising webinar in December which can be found here. Or if you want to chat anything Amazon you can reach out to me at email@example.com or call me on 07599506444.