Amazon is the first and still the largest e-commerce platform in the world, proven by its revenue and market capitalization. It emerged as a fast-growing challenger in the digital advertising market since it captures 50% of all online sales in the US. Amazon already has its own ad business within the platform. However, the ad infrastructure doesn’t seem to be as developed as Google or Facebook’s.
Both Facebook and Google cater to both personal and business purposes. These two are the leading ad service providers preferred by most businesses because of its amazing and advanced features in customizing the ad (hello, laser-sharp targeting). Plus, chances of success are awesome due to the high traffic and attention that people devote to using them, most on a daily basis.
Why Now?
For years, Amazon refrained from providing advertising space on its site because they thought ads might disrupt the shopping experience. As an alternative, Amazon used price, product descriptions and consumer reviews to keep up with products that are most prominent on the page. The site is a unique pay-to-play platform, with the top page dedicated solely to the highest bidder.
Before, sellers had the option to use Amazon Marketing Services. This is a paid platform that links within Amazon’s portals and appears in search results for specific products. You've probably seen "Sponsored Products" in your Amazon search results. However, this feature requires lots of manual work and its reporting is inefficient.
Threatened by the success rates of Facebook and Google advertising, Amazon is testing a new ad type dedicated to their sellers and vendors.
What It Will Look Like
The ads display in search results as a video based on a customer’s search query. An example is shown in the picture above. You can see the video ad after the first relevant search result.
This new feature will be made available through Amazon’s performance marketing platform, AMS. What’s new is the fee. Advertisers will pay for a Cost-Per-View basis, not the usual cost-per-click (CPC) model that most advertisers are familiar with on AMS.
In Conclusion
For now, it will likely benefit larger brands due to their bigger budgets and video assets already in play. Mark Power, CEO of Amazon, says that smaller Amazon sellers who rely on the cost-per-click model of performance marketing should not expect the same direct return on investment from this ad type.
What do you think about Amazon ads? Let us know in the comments!
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