Amazon revamped strategy to conquer branding ads budget - Part II
Amazon is an ideal environment for performance, much less for building a brand, which explains why some advertisers still have some difficulty seeing it as an advertising delivery platform.
But Amazon has another card up its sleeve: its DSP, which allows advertisers to buy display and programmatic video advertising. According to a study by the Tinuity agency, advertisers have increased their investments that pass through the DSP by 30% over one year, in the third quarter of 2019. While three-quarters of these investments were spent on inventory on Amazon, the rest was spent outside the platform, on more traditional media sites. This is enough to satisfy advertisers who are not comfortable with the performance of the e-commerce site's proprietary inventory.
Amazon strengthens its technology by adding, in 2019, the ad-serving and COD bricks of Sizmek, an independent ad tech on the verge of bankruptcy. The underlying technology is not mind-blowing, but it allows access to very good quality data: purchase history, product preference, purchase intentions. These cross-references make it possible to identify new prospects typologies, thanks to cross-referencing data on purchasing behaviour or moments in life. For example, an electricity or gas supplier can reach customers who are in the process of moving (because they are looking for white appliances or new accessories). Similarly, Amazon's subscription offer for nappies enables it to identify the arrival of a new child in the household... and therefore, a potential change of vehicle.
To attract those who hold the purse strings when it comes to branding, namely media agencies, the platform has worked hard on its offer. Customer support is indeed essential for these demanding partners. Amazon has staffed itself with collaborators and has worked on the accessibility of its tools. Generalist agencies are currently a bit rejected because there is little support, and the handling is not easy.
The last obstacle, and not the least, is the disappearance of third-party cookies (announced by Google for the next two years). Amazon is one of the significant potential losers of this announcement. It will have to increase its inventory to compensate for the slowdown in the deployment of its DSP offer. The disappearance of third-party cookies favours “walled garden” platforms. It will not change anything for Amazon's ad-buying... but it makes it more difficult for its audience extension offer, as the matching of cookies with external sites is considerably complicated.
To tap into larger branding budgets, Amazon needs an entirely different offering than what it offers within its site. Ideally, it should be based on high-impact videos. That is already a bit of a case in point. Amazon allows brands to display their video ads to Fire TV, Twitch and IMDb TV users. "By using our Video Creative Builder, advertisers can create relevant, eye-catching video ads that help increase brand and product awareness," said Amazon. These inventories allow them to reach an incremental audience, as they are complementary to linear television.
However, we are still far from an "at scale" solution. Today, only 40 million people worldwide use a Fire TV device every month. This is still a small number, and it will no doubt be necessary to make acquisitions or invest in exclusive content to boost this inventory. Amazon has shown that it can make acquisitions; it has the means to do so. The platform did not hesitate to pay $1 billion to get its hands-on Twitch.
One last option remains: introduce advertising into the online video platform, Amazon Prime Video. Nearly 82% of American households are registered there, according to estimates by Consumer Intelligence Research Partners (CIRP). Access is offered to all Prime subscribers, a popular Amazon-made delivery service across the Atlantic. The platform has so far not let anything slip through its fingers as to its willingness to introduce advertising. But according to eMarketer analysts, this is likely to happen soon, given the size of the video advertising market. Amazon would allow brands to reach their customers via pre-rolls broadcast before the programmes they view. Such an offer would be likely to attract all those advertisers who, as in the consumer market, invest a lot in television and little in digital.
The e-merchant, who knows the purchase history of his customers and the requests made by those who use his voice assistant, Amazon Echo, could feed tailored campaigns with consumer insights like any marketing director dreams of.