In their most recent quarterly report, Amazon announced they’re on track to earn $10 billion a year from their advertising business. Some advertisers have already opted to move over half of their budgets from Google search to Amazon ads. In March, eMarketer predicted that Amazon was on track to become the third largest online ad player by 2020.
As a digital agency focused exclusively on the B2B space, we’ve been hesitant to invest significant time into Amazon ads. But with Amazon ads hitting a critical mass, it’s time for us to pay attention. Here’s why.
The rise of Amazon Business
Amazon Business is on track to generate $10 billion in annualized sales and currently has over 1 million global customers. Originally, Amazon Ads were limited to B2C products, but the rapid rise of Amazon’s B2B sales platform has us taking a closer look.
As a B2B agency, our belief is that a good portion of our customers will soon skip the distributor model and sell directly on Amazon. Ads targeted towards B2B products will soon follow.
Getting into Amazon ads is like getting into Google Ads in the early 2000s. The returns to brands are high if not astronomical at times and there aren’t many agencies focusing on the space. As an agency, this provides an excellent opportunity to access untapped markets while delivering insane value to customers.
Direct connection to conversions
Most ad platforms aren’t directly connected to a marketplace, which can lead to issues with conversion attribution. Because Amazon ads originate from the storefront, attribution is far more streamlined and straightforward.
But wait, it’s not all good news
Although Amazon Ads have risen in popularity, advertisers are having major issues with the platform. They have a lot of work to do to meet the demands of experienced advertisers who’ve grown used to user-friendly and feature-rich competitor platforms like Google and Facebook. Primarily, advertisers have expressed the following issues:
Clunky and slow
Executing an ad buy on Amazon takes much longer than Google or Facebook. Additionally, ad programs are overlapping and Amazon lacks bulk publishing features. Improvements are coming, but right now Amazon is far behind their aforementioned user-friendly competitor platforms.
Lack of sophisticated analytics
Aside from linking directly to a purchase, Amazon does not provide sophisticated analytics. There isn’t a clear-cut way of finding out whether an ad lead to a purchase or an abandoned cart. Did an ad drive a product view? How deep was the product view? As any e-commerce vendor knows, a big part of analytics is understanding all the actions driven by the ad, not just conversion.
But, it’s still early and things will only get better. If we know anything about Amazon, it’s their ability to rapidly evolve. We expect the same of their ad platform. They’re already taking major steps in simplifying their ad products by merging everything into one platform to improve the user experience. They’re beefing up their agency development teams and approaching brands directly. These are all telltale signs of things moving in the right direction.
Prediction: we’ll look up in 2019 and Amazon Ads will be a top-3 ad platform. It’s time for brands and agencies to take notice.