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

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

Getty Images, Amazon

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.

Fast moving consumer goods manufacturers, like P&G and Unilever, are now competing for Amazon’s shelf the same way they used to compete for Walmart’s shelf. They know what once people start making their shopping lists online it will be hard to change their habits. The time to win on Amazon for these brands is now. And the window may be very small, perhaps a year or two at most.

A counterintuitive strategy suggestion

This gets us to what brands need to do. The intuitive answer is to start thinking about how to leverage Amazon’s platform to win on the “digital supermarket shelf.” And, of course, brands need to do that, urgently.

Here’s a counterintuitive answer: now is also a crucial time to create great top-of-the-funnel brand-building campaigns on other platforms, including TV, YouTube, outdoor, Facebook, print, etc. Those who do will win.

If you can get people to prefer your brand now, you can rest a little easier in the future.

The reason for top-of-the-funnel work is that Amazon is about to cement habitual buying, quickly and insidiously, for millions upon millions of people and many product categories. The products will, in effect, order themselves. In short, initial preference today, driven by high-level branding, will help win the habitual buying of tomorrow. So a key to winning the bottom of the funnel in the future is winning the top of the funnel today. If you can get people to prefer your brand now, you can rest a little easier in the future.

A good way to think about it is that the funnel now looks like a barbell standing on its end: big at the top and big at the bottom. What is in the middle counts less than ever before. Big high-reach branding opportunities in 2018 and 2019, like the Super Bowl, the Oscars, series finales, and highly viral YouTube videos, may be more important than ever before, and a lot more important than they ever will be again.

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