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Amazon, Advertising, and You

November 12, 2021
May 1, 2023

Amazon, Advertising, and You

Red Shark Digital

Amazon is now challenging both Facebook and Google in the paid advertising market. The e-commerce giant is now the third biggest digital ad seller, outperforming both Oath and Microsoft to come in at No. 3. It is only expected to increase exponentially from now on. Amazon’s Web Services (AWS) earnings generated $6.6 billion this quarter for Amazon, up $6.1 billion from last quarter. Not only has there been a massive increase in businesses spending on Amazon’s website, but they are also planning to increase their spending on the platform by a whopping 80%.

How is this affecting both small and large businesses?

More small and large businesses are shifting their budgets from different marketing efforts towards spending on Amazon. Budgeting for increasing spending on Amazon advertising is a dilemma for some companies. Where will this additional budget come from? According to ThirdFloorMedia, “The majority [of companies] (55%) expect it to come from incremental budget, while also chipping away at traditional search (30%), display (24%), other ad budgets (24%), paid social (21%), or other marketplaces spend (18%).”

Marketers are taking Amazon advertising quite seriously, with more than 70% reporting they are spending up to a quarter of their digital ad budget with Amazon. The remaining third are reporting spending between 0-10% of their annual ad budget with the e-commerce giant. There are three main groups of advertising that Amazon provides. The most sought out form of Amazon advertising was the Amazon Marketing Services (AMS) which is the search ads business for sellers on Amazon to promote their products. There are three search ad formats: sponsored products, headline search ads that show at the top of search results, and product display ads that show in a number of locations such as product detail pages, the right rail of search results, and marketing emails to Amazon customers. The second is Amazon Media Group (AMG), which provides managed services for brands on and off the platform with video and display options on its properties, including Amazon, Kindle, and Fire TV, as well as a wider network of sites. Lastly, Amazon provides the Amazon Advertising Platform (AAP), a Demand Side Platform (DSP) that offers programmatic access to Amazon audiences on other sites. Data shows that AMS and AMG were among the most popular for advertising followed by AAP. Using various digital ad channels for marketing is important for increasing awareness and generating new customers.

What does this mean for me?

As Amazon continues its bullish run in the digital ad space, one must consider what type of digital advertising works best for their certain company. Here at Red Shark Digital, we strive to find the right strategies to position your company for the best results. We are always striving to keep your company’s best interest in mind. Contact us for more information or to start your Amazon advertising journey!

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