Amazon Advertising: Your Roadmap to Success

Amazon is now the third largest seller of digital advertising in the US, behind Google and Facebook.  Forrester Research estimates that Amazon advertising sales reached $10 billion in 2018 worldwide, a 117 percent increase from 2017.

Collin Colburn, analyst from Forrester Research, says that Amazon’s strong and growing ad business helps many of Amazon’s other business units.  For example, as brand manufacturers and sellers buy more ads from Amazon, more products get sold. This makes Amazon’s top line revenue grow even more.

Why Amazon?

In 2018, 200 million Americans visited Amazon’s website according to Forrester. That’s over two thirds of the US adult population and equal to the number of Americans who visit Facebook annually.

In order to for your Amazon ad strategy to succeed follow these tips:

  1. Learn your customer’s life cycle. According to Forrester, there are six customer life cycle stages: discover, explore, buy, use, ask, and engage.  Each customer is one of the stages.
  2. Use the channels that support each stage of your customer’s life cycle. Most sellers are gaining new customers in the explore and buy stages on Amazon. Sellers should start earlier in the life cycle such as the discover stage.
  3. Determine the right media mix. Your media should not just include one model but a variety of models.  Digital advertising will grow from 45 percent of all advertising to 57 percent by 2023. Thus, make sure to make room for digital spending in your brand’s budget.
  4. Acknowledge that in-store sales still matter. While 84 percent of all US sales will be made offline in 2019, 36 percent of those offline sales will be influenced by digital.  The majority of dollars that are moving to Amazon ads are moving there from shopper and trade marketing budgets not off of Google and Facebook.
  5. Do not over-index on ad spend on Amazon. Test ads on other retailer’s websites including Walmart, Target, Best Buy and even Kroger.  Spend as much as you can without a decline in return on ad spend (ROAS) on Amazon. Then, look into these other websites and apps.

Overall, Amazon advertising can help your company acquire new clients and grow your overall revenue.