Amazon started as online book store and has grown to be the worlds largest online retailer.
Amazon Advertising growth accelerates in Q3 says Merkle
Ahead of Amazon‘s earnings call tomorrow, we’re expecting big things from Amazon Advertising growth and their contribution to Amazon’s bottom line.. Merkle’s latest findings in its Q3 2018 Digital Marketing Report shows that Amazon search ad spend continued to grow in Q3 2018.
- Spend across Amazon’s Sponsored Products grew 62% Y/Y, while spend on Sponsored Brands grew 86%.
- Amazon’s recent layout changes served Sponsored Brands well, as it significantly increased the number of page locations where Sponsored Brand ads may show.
- Brand keywords accounted for 61% of Sponsored Brands sales and 42% of Sponsored Products sales in Q3.
- Amazon Sponsored Products conversion rate is higher than that of Google Shopping, which points to the high purchase intent of Amazon searchers relative to general search engine users.
Amazon Advertising growth
We’ve seen how Amazon Advertising now dominates search result pages on the marketplace and has quadrupled to be a $2 billion a quarter business unit for Amazon. We’re expecting a significant rise in advertising sales to be reported for Q3 and for sales to further accelerate in Q4.
As a merchant, retailer or brand selling on Amazon, if you’re not already using Amazon Advertising then it’s likely you are missing out on sales and will be forced to do so in the future. Looking at the conversion rates, if you’re investing in Google Shopping paid search then with the higher conversion rates of Amazon Advertising it is definitely time to divert some of your spend and start experimenting.
“Published since 2011, the Digital Marketing Report offers detailed and accurate data trends and insights for marketers. The Q3 report not only provides marketers with valuable benchmark data for their programs, but it also sheds light on some of the most impactful changes happening on media platforms – from Apple’s new Intelligent Tracking Prevention (ITP) to Facebook and Instagram ad performance to evolving Amazon ad formats.”
– Erin Hutchinson, SVP, head of marketing for Merkle Americas
Amazon advertising already has a yearly run rate of nearly $9 billion and it’s advertising is still right at the beginning of its cycle and could possibly in the future be a $50 billion business per year.
Why advertise with Facebook when a company can advertise with Amazon where all the product buyers come to. Both advertising companies and companies will come to realise this. What will happen in years to come is that Facebook will lose a large proportion of advertising revenue to Amazon.
So is this for advertising your products to sell on your own web site or for promoting your listings on Amazon?