Why is everyone suddenly talking about Amazon?

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Ben White

If you’ve been keeping any kind of eye on the digital industry lately, you are probably aware that Amazon has become a prominent subject in many conferences, articles and digital strategies.

While some might cheekily suggest that the sudden interest in Amazon is driven at least in part by a will to move swiftly on from talking about programmatic and ad fraud implications, it’s very true that Amazon’s ability to influence online sales both within and outside of their web domain has become a very important topic.

Amazon has arguably thrown itself into the spotlight with their latest tech innovations and vital contributions to the future of digital; Alexa, Prime and Fire Stick, to name a few. Aside from this though, Amazon is a breath of fresh air to anyone frustrated by the recent impact of a digital sector dominated by two media giants: Facebook and Google. Although ever developing and responsible for driving the industry forwards, both companies hold a degree of monopoly over anyone intending to knit together a successful digital strategy, and the Amazon platform offers a chance to do something different.

Amazon boasts one of the world’s largest digital real estates, and unlike Facebook and Google who can only see what people are interested in or searching for respectively, Amazon holds data that shows what people are actually buying. Staggeringly, 55% of all product searches already start on Amazon, and this number is only growing. So, when it comes to buying things online, Amazon is already the market leader in this space. For someone interested in selling merchandise, this provides several opportunities; either you might want to use the Amazon platform to advertise items due to its more accurate targeting capabilities or you could choose to sell your merchandise directly on the site, a platform where people are strictly searching to buy. Furthermore, because Amazon knows all the purchasing information for all types of products, it can also allow advertisers to use those insights to form digital strategies outside of the Amazon platform.

So, in practice, how do some of these elements work for businesses using Amazon?

  • It acts as an e-commerce and fulfillment platform. Not only do you have the ability to put your product in front of a handpicked audience who are actively looking to buy, but also Amazon is happy to take on order fulfillment. With most items being delivered in a day, both customer and business are satisfied.
  • By looking at the platform as an opportunity to use SEO learnings, businesses can build strategies on Amazon that ensure their products are listed ahead of competitors.
  • Just like Google, except with a more buyer focused audience, Amazon allows you to bid on certain keywords for which you intend your merchandise to show for, as well as allowing for advertising of apps through the Amazon app store.
  • Amazon has its own TV and Music streaming service. This offers up vast opportunities to any advertiser wishing to push video content out to specific targeted groups using video on demand.
  • The levels of data housed by Amazon are extensive and you can use that information to inform your own digital strategies outside the platform.

What is challenging for advertisers is mainly just the teething problems you would expect of an offering with so much volume and opportunity – there is only so much media they can book. If Amazon can allow greater self-service and provide greater clarity of spend and results, reducing spend thresholds for advertising to help entice more brands into the space – all things that other media providers offer, then they will easily take a sizeable chunk of online advertising spends within the fashion and retail sectors.

Perhaps the most exciting aspect of the Amazon proposition is what they don’t do… Yet. Amazon is clearly gearing up in a significant way and is potentially the company to bring the next revolution to commerce (not just e-commerce, which it’s fair to say they have already revolutionised alongside eBay). What are the developments that we feel Amazon could easily bring by tying all of their composite capabilities together?

  • Monetisation of – and insights from – voice search. If a user is asking Alexa about train times, it could easily return sponsored suggestions. Amazon wants to get a better understanding of an account holder’s domestic set up to further fuel their insights? A simple piece of voice recognition software could soon reveal the likely number, age and gender of family members. Slightly scary, yes, perhaps intrusive but hugely useful for marketers.
  • Want to understand what offline, non-Amazon, purchases a user is making? Amazon Pay will soon reveal this as it is rolled out further – all purchases on Amazon.com can then easily be overlaid with offline habits. Again, great for marketers looking for users who fit their desired audience.
  • (Perhaps the most farfetched.) With its purchase of Whole Foods, Amazon now has a solid beachhead in the traditional bricks and mortar side of retail. Imagine what it could do for your real-life shopping experience if you are wondering around a store fitted out with digital displays and beacon technology, the Amazon app on your mobile tied to all you purchase history. Tailored offers? Dynamic digital screens? Recommendations and reminders of what you need to go alongside the BBQ set you bought online yesterday?

So why is Amazon making the headlines at present? It’s simple really – it has carefully cultivated everything it needs to become the next major player in the digital ad space: high-value real estate; first party user data; a place at the centre of our e-commerce habits. And by the looks of things, it has only just begun to demonstrate its potential.

Gareth Owen is managing director of online performance agency Roast.

Gareth Owen

All by Gareth