Amazon Ads Platform and the Importance for E-commerce

Amazon History and E-commerce

Amazon was founded by Jeff Bezos on July 5, 1994, initially as an online bookstore. Over the years, it has expanded into selling a wide variety of products, including electronics, apparel, home goods, and more.

• Global Reach: Amazon operates in numerous countries with dedicated websites, including the U.S., Canada, the U.K., Germany, Japan, India, and more. Each of these sites caters to local markets with region-specific products and services.
• Technology and Innovation: Amazon’s platform is powered by advanced technology, including AI-driven recommendations, dynamic pricing, and extensive data analytics. The platform continuously evolves, with features like one-click ordering, voice shopping via Alexa, and cashier-less Amazon Go stores.
• AWS and E-commerce: Amazon Web Services (AWS), Amazon’s cloud computing division, powers not only Amazon’s e-commerce platform but also countless other websites and services globally. AWS’s success has helped fuel Amazon’s growth and innovation in e-commerce.

Amazon Ads Origin

Here’s a brief recap of the evolution of Amazon ads:

• 2008: Introduction of Amazon Product Ads: Amazon first dipped its toes into advertising by introducing Product Ads, allowing external websites to drive traffic from Amazon to their sites.
• 2012: Sponsored Products Launch: Amazon introduced Sponsored Products, a PPC (pay-per-click) advertising format that allowed sellers to promote their products directly within Amazon’s search results and product detail pages.
• 2016: Expansion of Amazon Marketing Services (AMS): Amazon expanded its advertising offerings under Amazon Marketing Services, which included Sponsored Products, Headline Search Ads (now Sponsored Brands), and Product Display Ads.
• 2018: Rebranding to Amazon Advertising: In September 2018, Amazon consolidated its advertising products under a single brand name, Amazon Advertising.
• 2020-2021: Growth and Innovations: Amazon Advertising continued to grow rapidly, introducing new ad formats, improving targeting capabilities, and expanding to international markets
• Present: Amazon Advertising now includes a wide range of products and services, such as video ads, custom display ads, Amazon DSP, audio ads, and more, allowing advertisers to reach customers both on and off Amazon’s platforms.

Understanding Amazon Ads

• Amazon Ads, also known as Amazon Advertising, is a comprehensive platform that enables businesses to promote their products, brands, and services directly on Amazon’s e-commerce site and across its network. It offers various ad formats designed to reach potential customers at different stages of the buying journey, including: –
• Sponsored Products: These are PPC (pay-per-click) ads that promote individual product listings within Amazon’s search results and product detail pages. They help increase product visibility and drive sales.
• Sponsored Brands: Formerly known as Headline Search Ads, these ads allow businesses to showcase their brand logo, a custom headline, and multiple products in a banner format at the top of search results. They are designed to build brand awareness and drive discovery.
• Sponsored Display: These ads allow advertisers to target customers on and off Amazon using display ads that can be personalized based on shopping behaviors, interests, or product views. They help in retargeting customers and reaching new audiences.
• Amazon DSP (Demand-Side Platform): This programmatic advertising platform enables advertisers to buy display, video, and audio ads across Amazon’s sites, apps, and third-party websites. It offers advanced targeting capabilities and access to Amazon’s first-party data.
• Video Ads: These are short, engaging video ads that can appear on Amazon’s properties like Fire TV, IMDb, and Amazon Prime Video, as well as across the web.

Using Amazon Ads

Amazon ads direct access to purchase-ready customers. Amazon is a platform where users are already in a buying mindset. Unlike other platforms where users might be browsing for entertainment or information, Amazon shoppers are often actively looking to make purchases, increasing the likelihood of conversions. Here are other advantages to the platform:

• Vast Reach: Amazon has millions of active users globally, making it a powerful platform to reach a wide audience. This reach is particularly valuable for brands looking to scale their presence quickly.

• Detailed Customer Insights: Amazon collects extensive data on user behavior, including search queries, product views, purchases, and more. Advertisers can leverage this data to create highly targeted and personalized campaigns, improving the efficiency and effectiveness of their ads.
• Integrated E-commerce and Advertising: Since Amazon is both a shopping platform and an advertising platform, the entire customer journey from discovery to purchase can happen within the same ecosystem.
• Brand Building and Performance Marketing: Amazon Ads allows businesses to focus on both long-term brand building (through Sponsored Brands and Video Ads) and short-term performance marketing (through Sponsored Products and Sponsored Display), making it a versatile tool for different advertising goals.

Amazon in Canada

• $3.2 billion in sales in May 2020 broke the record in Dec 2020 to $3.82 billion
• In 2021, of over 27 million e-commerce users, 72% shopped on Amazon.ca
• Net sales in 2021 of $9.6 billion and went to $11.51 billion in 2022
• 2023 most online purchase categories: fashion, electronics, furniture, etc.
• Amazon.ca had approx 206.3 million web visitors
• 70% of shoppers frequently visit Amazon.ca

Benefits of Amazon Ads

• Purchase Intent: While Google and Meta are excellent for reaching broad audiences and driving traffic, Amazon users typically exhibit higher purchase intent. This means that Amazon Ads are often more effective at driving direct sales since users are already in a shopping mindset.
• Rich First-Party Data: Amazon’s first-party data, derived from user interactions within its ecosystem, allows for highly precise targeting. This is particularly valuable as third-party cookies become less effective, giving Amazon an edge in data-driven advertising.
• Closed-Loop Attribution: Amazon offers robust tracking and reporting tools that allow advertisers to see exactly how their ads influence sales.
• Lower Competition in Certain Niches: While Google and Meta are saturated with advertisers across many categories, Amazon Ads may offer less competitive and more cost-effective opportunities, particularly for e-commerce-focused brands.
• Amazon DSP for Off-Amazon Reach: Amazon’s DSP not only allows advertisers to reach audiences on Amazon but also extends the reach to other websites and apps. This capability provides a broader reach while still leveraging Amazon’s powerful data.
• Ad Formats Tailored to E-commerce: Amazon Ads are specifically designed with e-commerce in mind. Features like the “Buy Now” button and real-time inventory integration make Amazon Ads particularly effective for driving immediate sales.

Summary

Amazon Ads is a powerful tool for businesses looking to reach purchase-ready customers, leverage detailed customer insights, and benefit from an integrated e-commerce and advertising ecosystem. Its advantages, particularly in terms of purchase intent and first-party data, make it a compelling option compared to other platforms.

It offers a unique advantage for e-commerce brands by integrating advertising directly with the purchasing process, making it a powerful option for driving sales and growing brand presence.

Have question about utilizing Amazon Ads for your own campaign? Reach out to us today.