Amazon Is Opening Up Its Ads Business, and Marketers See a Big Opportunity to Shake Up Search

Brings together branding and performance marketing

Amazon is making a big impression at Dmexco.
Getty Images

COLOGNE, GERMANY—Execs from Facebook, Google, Pinterest, Snapchat and more are crowding the halls of Dmexco, but perhaps the most interesting company here is Amazon.

As brands have complained about the duopoly of Facebook and Google controlling most of the digital ad ecosystem, Amazon is on the lips of consumer-packaged goods and retail brands as digital’s third big player, and the Seattle-based ecommerce giant is quietly talking to marketers about its ad offering this week and speaking on a few panels.

During one such panel on search advertising with other execs from Google, Pinterest and Kenshoo, a company that helps marketers manage search spend across platforms, it became clear that marketers see a big opportunity for Amazon to lure brand dollars to its platform in addition to more traditional performance marketers.

Colleen Aubrey, global vp of self-service performance advertising at Amazon, spoke on the panel about her company’s recent work in setting up keyword targeting that allows brands to serve ads to product pages, playing up the fact that consumers don’t shop from one website or at one specific time.

"People very much underestimate the power and promise that Amazon brings to the table."
Yoav Izhar-Prato, co-founder and CEO of Kenshoo

“Customer journeys are nonlinear, and when we think of a marketing funnel, it’s a useful mental model to think about how you’re investing your marketing dollars,” she said. “In real terms, what we observe customers to do is not linear, and the transition between discovery and consideration through to purchase happens very quickly and can happen in different cycles.”

After testing search-based ads with agencies and brands, Kenshoo is making Amazon ads readily available to all marketers through an API integration today. According to Yoav Izhar-Prato, co-founder and CEO of Kenshoo, Amazon could be the hottest new player in search because “whether it’s about brand awareness or down to performance across devices, it just works.”

He added, “People very much underestimate the power and promise that Amazon brings to the table. It is the emergence of brand and performance, and it’s the first time that we’re seeing this coming together. Amazon right out of the gate is speaking very well to those consumer-goods companies that are trying to reach consumers, because Amazon is the solution of choice for the consumer, and what we’ve seen in almost every metric is promising.”

After the panel, Adweek spoke with Oren Stern, Kenshoo’s general manager, about what the new partnership will entail. Working with OMD, Levi’s has tested Amazon ads as has performance-based shop Chacka Marketing.

Stern declined to share specifics but said that Amazon is opening up new budgets from brands within ecommerce and co-op budgets.

“We’ve been working with Amazon [for] probably over 18 months but more recently, this API program for six, seven months,” Stern said. “I’ve been in software for many years [and] I’ve never before seen that tremendous pent-up demand to get on board. I think the maturity encompassing of what the consumer is doing there is what led to some of that push.”

Amazon offers three ad formats—sponsored products, headline search ads and product-display ads—that are purchased on a cost-per-click basis. Sponsored products and headline search both use keyword targeting, while product-display ads are targeted more by types of categories used for competitive placements.

According to a new study from Kenshoo that surveyed 3,100 consumers in the U.S., United Kingdom and France, 56 percent of consumers go to Amazon first when shopping and 72 percent of shoppers use Amazon to find products.

Voice-activated search

But when it comes to voice-activated devices like Amazon Echo, shopping and commerce isn’t quite there—yet.

“Echo and Alexa present some really exciting opportunities going forward—what we’re really focused [on] is starting with our core shopping experience and finding ways for marketers to get the products that they care about in front of customers and customers finding products that they love,” Aubry noted.