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Why more advertisers will see Amazon as a brand builder

Why more advertisers will see Amazon as a brand builder
Opinion

Amazon presents an attractive proposition for advertisers wishing to harness Amazon’s consumer data insight in multiple channels including the TV streaming space.

 

The retail media landscape has exploded recently, but perhaps the most interesting thing about this growth is it isn’t all about commerce.

Amazon saw its media earnings reach $31 billion in ad revenue in 2021. While it is still very much third behind Google and Facebook, the commerce giant is making an interesting play which could gradually reset the balance between the walled gardens and open the way for other retail brands to diversify and expand their media propositions.

Whilst historically the perception has been that the retail advertising sector is only beneficial for the promotion of CPG or FMCG products, Amazon is breaking the mould by showing its versatility when it comes to middle and upper funnel activity for all sectors, not just retail.

Following a similar strategy to the likes of Google and Facebook, Amazon’s focus has shifted to digital brand-building and brand awareness – linking its vast retail and data capability to streaming and live media such as Twitch, Freevee (formerly IMDb TV), influencer live shopping, and Prime Video.

With the phasing-out of third-party cookies, and increasing privacy regulations, Amazon presents an attractive proposition for advertisers wishing to harness Amazon’s consumer data insight in multiple channels including the TV streaming space.

Data is king

It’s expected that US retail media advertising investment will surpass $50 billion by 2023. In the US, Amazon is using its retail and customer data to work with brands that would not normally use its services to sell their products, including non-retail advertisers, but who are keen to reach their audiences through display and streaming services like OTT and other channels. Examples include Fortune 500 financial services, media, and hospitality brands.

Streaming TV ads within Amazon inventory and across publishers is now available to most advertisers, regardless of whether they are ‘endemic’ (sell their products on Amazon). This means that brands can tap into both Amazon’s rich customer data, such as in-market segments, as well as their exclusive and premium inventory.

Amazon is also making strides in the tracking and analytics space with the evolution of its data clean room solution, Amazon Marketing Cloud. With this solution, as well as with their wealth of customer data, Amazon is a leader in the pack in regards to conversion tracking and attribution solutions in the face of cookie-deprecation.

Democratisation in the online advertising space?

It’s likely that there will be a shake-up in where brands choose to spread their investment between the dominant walled gardens as Amazon takes on more non-retail clients. It’s predicted that this will see Amazon’s digital media spend share grow steadily from just under 12% over this last year to approaching 15% in 2023.

The retail media network specific space is also becoming more crowded as household names like Walmart, Target, Instacart and Tesco continue to develop their proprietary solutions.

It is likely that we will continue to see a democratisation of the space similar to that which we have seen in the broader Streaming TV space with players like Hulu, Roku, and Apple TV.

These nascent-walled gardens have a long way to travel before they are close to the ’Big 3’ in terms of capability and scale. But in the short term, they offer benefits in scale and audience access for retail/endemic clients.

Why brands should make the Amazon DSP a primary choice

With a demand-side platform (DSP) and measurement capability to match Google and Facebook, Amazon’s entry into the global TV advertising business, which is expected to reach $159 billion this year, is a significant media milestone.

What continues to set Amazon apart from its competitors is its rich and proprietary customer data, ability to drive customer loyalty, and access to exclusive, premium inventory – crucial tools for marketers looking to effectively build their brand.

As marketers look to balance conversion driving efforts with effective brand awareness, the Amazon ads business is well-positioned to serve these needs and continue to grow among retail and non-retail brands.

 

Hannah Grobmyer is associate vice president at digital media agency Kepler, and is responsible for leading its Amazon Advertising Solutions team.

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