The Key to a Winning Amazon Ad Strategy? Go Big Everywhere Else

Top-of-funnel marketing now will drive shopping behavior tomorrow

Headshot of Brian Sheehan

Dear chief marketing officers: If you haven’t received the news flash yet, one of your top three tasks to ensure your survival in 2018 and beyond is to develop an Amazon strategy. Let’s start with what we know:
The digital duopoly of Google and Facebook, which according to WPP’s Group M ended the year 2017 accounting for roughly 84 percent of global digital investment (minus China), will soon become a triopoly. Make room for Amazon. While Amazon is currently only No. 5 on the list, it is growing—and growing fast. How fast? Over 48 percent in 2017.
While it will take Amazon a long while to get anywhere close to Google and Facebook, even at those growth rates, it should not take them long to get to No. 3 (passing Microsoft and Yahoo). And despite Amazon being a significantly smaller No. 3, getting your Amazon strategy right may be even more important to your long-term future than getting your Google or Facebook strategies right.
One reason is that what Amazon knows about consumers is superior to what Google and Facebook know.
While they all know a lot of things, Google’s strength is its knowledge of what you are searching for. Facebook’s is knowledge of what you (and your friends) like. Amazon’s, however, is what you actually buy.
Amazon knows your actual purchase behavior. A recent industry article about the video-gaming industry noted that gamer complaints about certain things, like loot boxes, paled in comparison to how gamers voted with their wallets. It said: “Business is about what people do, not what they say. Player behavior is more important than player speech.” That’s true for every business. What people like, or talk about, or complain about, is less important to brands than how they actually behave when they buy.
eMarketer’s podcast, Behind the Numbers: How Digital is Transforming Business and Life, recently devoted an episode to Amazon. Nicole Perrin, analyst at eMarketer, said: “The Amazon audience is ready to buy, and they buy a lot, and over time they buy more and more frequently … and for Prime users it’s basically even more so. And the Prime audience itself continues to grow.” Do you have a Prime account? If so, then you get it.
So, the marketing world is facing a perfect storm: a company that is right down at the very bottom of the purchase funnel that is growing by leaps and bounds. It’s also one that’s becoming the habitual buying platform for an exceptionally large group of consumers, that is being turbo-charged by Amazon Prime.
Here are some sobering thoughts: Amazon’s monthly reach on its site is 183 million users. EBay and Walmart, which are the second and third transactional sites in reach, have about half of that. According to a 2016 report, 55 percent of U.S. internet users start a product search on Amazon, not Google or other sites. That’s a game-changing statistic.

It is time for Amazon to become as much of a profit success as it is a product and marketing success, and advertising is a key part of the solution.

Amazon also has one of the largest demand-side platforms (DSP), a DSP with exceptionally high rates of satisfaction among its client customers. For product search, display, and lookalike targeting, Amazon is a powerhouse. That’s before we even start talking about the advertising possibilities of Amazon Prime’s entertainment offering (which knows what you like to watch, and offers potential advertising features like “X-Ray”), or Echo’s knowledge of just about everything else about you. And make no mistake, Amazon wants to develop its advertising business, quickly and substantially. It is time for Amazon to become as much of a profit success as it is a product and marketing success, and advertising is a key part of the solution.

Brian Sheehan is a professor of advertising at Syracuse University and is a member of our Adweek Academic Council.