The Rise of Amazon As An Advertising Giant

Amazon is an advertising giant in 2019. With more advertisers reallocating budgets to Amazon, some people feel its rise came without warning.

But if we look backward, we can see that Amazon’s rise has been nothing but planned and systematic. In fact, it’s taken the eCommerce king at least seven years to compete with Facebook and Google in the ad space.

However you slice it, Amazon’s ad business is no longer a sleeping giant. After surpassing Facebook and Google in product-led search in 2018, Amazon is coming out ahead.

Although Facebook and Google still own the advertising duopoly, Amazon boasts less competition and improved conversion rates, thanks to its treasure trove of data.

Today, Amazon is the world’s largest product search engine. With over 5 million sellers on the platform, they embrace a fine balance between user needs and happy advertisers.

But it wasn’t always this way. Amazon methodically crawled their way to the top over a period of years, adjusting their offerings to better fit marketers’ needs.

Learn about Amazon’s rise to the top, and how you can take advantage of its offerings in a competitive PPC landscape.

The Beginning of Amazon Advertising

Although Amazon has offered ads in some capacity since 2006, it wasn’t until 2012 that they ramped up their advertising efforts.

Until this point, Amazon had been highly secretive about their move into the ad space.

In an out-of-character flourish, Amazon announced their advertising offerings during 2012’s Advertising Week. They promoted their ecosystem of ad offerings, including the Amazon network and Amazon-owned sites. Amazon also enabled advertisers to push ads to Kindle users.

Amazon offered five untargeted ad options in 2006. But by 2012, plenty had changed. They allowed advertisers to reach users on the Kindle login screen, through retargeting, and with banner ads on partner sites.

Unlike the Amazon of 2019, in 2012, Amazon focused on working directly with large brands. Their focus wasn’t so much on agencies as it was on large, big-ticket advertiser accounts.

The Amazon App opening on someone's phone.

Self-Serve Offerings

By the beginning of 2013, Amazon had rolled out its self-serve, real-time bidding platform. Now Amazon finally built a platform that could compete more directly with Google’s Adwords platform.

In 2013 Amazon also started working more with agencies. They even embraced more in-house solutions, too. Amazon created a proprietary, in-house technology for their bidding software.

Originally the platform worked on a CPM pricing model. Today, it follows the CPM model for banner ads and a CPC model for other ad types.

Although Amazon still needed to iron out a few kinks, marketers were thrilled. Amazon had few advertisers on the platform, meaning there was less competition and cost for marketers using the platform.

Amazon’s high-quality purchase data, which Google simply couldn’t (and can’t) touch, gave marketers more high-quality data for campaigns. Marketers could finally tie revenue data directly to user purchases.

However, in 2013, Amazon wasn’t gunning for Google just yet. In fact, Amazon was still competing with Walmart. Over the next five years, Amazon would switch its focus to compete not with other retailers, but with advertisers like Facebook and Google.

Amazon’s advertising accounted for just 5 percent of its revenue in Q3 of 2012. 84 percent of its revenue was still coming from product sales.

As Amazon refined its advertising platform, this changed rapidly in the coming years.

A Growing Titan

By 2014, Google acknowledged that Amazon was their biggest competitor in advertising. In the next four years, Amazon rapidly rose to the top of the advertising world. In fact, Amazon announced its advertising wing grew over 130% year over year, reaching $2 billion in sales.

Today Amazon offers a handful of services to fit a variety of needs. They offer the Amazon Advertising platform, keyword self-service platform, PPC campaigns, and even a DSP.

Amazon dreamed big. Instead of simply competing with other online retailers, Amazon aimed to disrupt the advertising industry. After reporting millions in advertising sales at the end of 2018, it’s clear that Amazon is gunning for first place in the world of advertising.
Take advantage of Amazon’s growth
Amazon’s growth has real implications for your business. When advertising platforms compete, you stand to win. Use these tips to make the most of Amazon’s ads.

1. Smarter data at your fingertips

The great thing about Amazon is that it helps you predict buyer behavior. Facebook and Google can guess what people want to buy; Amazon knows.

Get more bang for your buck by advertising not just for more eyeballs, but for conversions, thanks to better purchase intent data.

2. Clean up your UX

This is a best practice for any PPC campaign. High-quality UX gives customers a better experience, increasing your chances at conversion.

Enhance Amazon product pages with videos and high-quality images. Clean up your landing pages so they load quickly and give users immediate value.

It sounds counterintuitive, but you can try advertising your products before you run an Amazon campaign. Increased clicks to your products tell Amazon that your products are in high demand. This, in turn, could give you an advantage when it’s time to run an Amazon campaign.

Also, make sure you have data tracking in place before running an Amazon campaign. Data will help you take advantage of Amazon’s advanced features and targeting.

3. Allocate the budget

Budgets vary by company, but 50% of marketers’ budgets generally go towards paid social and search ads. Platforms like Google and Facebook are becoming crowded and tired. Marketers just aren’t getting the results they once had.

Reroute your budget to embrace Amazon Ads. You should dedicate at least half of your PPC to Amazon if you want to see results.

Conclusion

Amazon experienced monstrous growth over seven years. The retailer wanted to offer far more than product to the world, expanding their offerings and investing in new ideas.

Whatever the future has in store for Amazon, it’s good news for marketers. Use Amazon’s growth to your advantage to stay top of mind for your customers.

Need a helping hand with your Amazon campaign? Contact Ocean Agency to cut through the clutter.

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