Dedicated Amazon Teams Are Helping Brands Develop Platform-Specific Marketing Tactics
Shops are tailoring their services to tackle the ecommerce giant
By Lisa Lacy
Agencies are adding divisions to help navigate the platform's complexities, as they once did for Google.
Sources: Amazon, Getty Images
Google released its self-service pay-per-click advertising platform AdWords in 2000, revolutionizing the digital advertising industry. One side effect: a cottage industry of specialized agencies to help brands navigate the new format.
That same year, Amazon chief executive Jeff Bezos cited a brutal 2000 in which shares were down more than 80 percent from 1999. Nevertheless, Amazon served 20 million customers and sales grew to $2.76 billion. Bezos remained optimistic.
Two decades later, Google will make nearly $40 billion in ad revenue—accounting for 37 percent of the U.S. digital advertising market, according to eMarketer. Meanwhile, eMarketer expects Amazon's newfound ad revenue will surpass $2 billion in the U.S. this year, giving it a 2.7 percent share, and that is expected to grow to 4.5 percent by 2020.
And just as shops dedicated to servicing brands on Google's ad platform popped up, agencies—but particularly search agencies—are now adding divisions devoted to Amazon to help clients not only optimize for the platform's algorithm, but also execute the best paid strategies on Amazon. Insiders say the algorithm focuses more on product relevancy and emphasizes factors like descriptions, sales volume, return rates, Prime availability and Amazon fulfillment.
Search agencies have a vested interest in building out capabilities for Amazon because it's complementary to what they've been doing for years—buying Google and Facebook ads, said Collin Colburn, an analyst at Forrester.
But, like Google before it, the race is on to distinguish Amazon-focused services.
"The biggest thing we are helping brands with on Amazon is helping them understand how the tactics that work on Google Shopping, or other search platforms, aren't the same as you need to succeed on [Amazon Marketing Services (AMS)]," said Gregg Manias, executive director of ecommerce at Acronym, which often taps Amazon when managing ecommerce marketing budgets for Brother and ScottsMiracle-Gro.
Search agencies that have recently added Amazon-specific capabilities also include iProspect, Merkle, Performics and Rise Interactive—and Colburn expects more to come.
Last June, WPP agencies Possible and Mindshare teamed up to help clients focus on Amazon with media planning, ecommerce services, brand experiences with Dash and Alexa, and analytics.
Joe Migliozzi, who leads the Shop+ unit for WPP's Mindshare in North America, also pointed to a proliferation of potential marketing tactics on Amazon, which, by his count, number more than 40 and include search, site display ads, sponsorships, Prime Day promotions, Amazon Locker wraps and Fire TV ads.
"The biggest thing we are helping brands with on Amazon is helping them understand how the tactics that work on ... other search platforms aren't the same as you need to succeed on [Amazon]."
Gregg Manias, executive director of ecommerce, Acronym
An additional complexity is how to sell a product with zero reviews on Amazon, Manias said.
"With [Amazon's] A9 [product-ranking] algorithm prioritizing recent transactions and a combination of other factors, brands can't wait on positive reviews to come from organic results," Manias added. "Instead, we work with them to develop A+ content that helps educate consumers on the new product, which typically increases the conversion rate."
Former Amazon employee Larry Pluimer was a few years ahead of the curve—starting his Seattle-based, Amazon-focused agency Indigitous in 2010 to help brands succeed on the platform. Now, after AMS opened Amazon's search results page to paid options, Pluimer is seeing increased demand for services, as well as increased competition.
"Even though Amazon's ad platform is easy to use—it is designed for a novice to operate and execute ads—but brands quickly realized when it gets competitive, they need to work smarter," he said.
An Amazon rep called ecommerce marketing a distinct discipline that requires a holistic approach.
"Things like whether you have enough inventory in stock or the product has a critical mass of customer reviews, optimized packaging and enough content on the product detail page all impact media performance, whether the goal is branding or sales," the rep added.
This story first appeared in the July 9, 2018, issue of Adweek magazine. Click here to subscribe.
https://adweek.it/2KmVVFo
Lisa Lacy
@lisalacy
Lisa Lacy is a reporter for Adweek's brand desk, where she focuses on retail and the growing reach of Amazon. She has covered marketing and technology for more than a decade for publications like TechCrunch, CMO.com, VentureBeat, the Wall Street Journal, Dow Jones Newswires, ClickZ, Search Engine Watch and Search Engine Journal. She has a master's in journalism from Columbia University and a bachelor's in English from the University of Sussex in Brighton, England.
by T.L. Stanley