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Brands tripling spend on Amazon ads to reach intent-driven shoppers

Brands tripling spend on Amazon ads to reach intent-driven shoppers
Monday November 5 2018

Brands are showing increasing interest in buying search ads on Amazon, with spend growing nearly 3 times between the 3rd quarter of 2017 and the first quarter of 2018, according to new research.

The study, from Kenshoo, indicates that consumers visiting e-commerce mega sites such as Amazon already have a very strong intent to make a purchase which is why they are a prime destination for advertising.

And with Amazon’s quarterly advertising sales reported overnight to have surpassed $2 billion for the first time, new data underlines how brands are showing increasing interest in buying search ads on Amazon – with spend on these ads growing nearly 3x between the 3rd quarter of 2017 and the first quarter of 2018 (see attached chart).

Spend even rose 16% between Q4 2017 and Q1 2018 – despite the fact that online ad spend traditionally peaks in Q4 due to the holiday shopping season when consumer retail spending is at its highest.

The findings are part of the quarterly trends data gathered by Kenshoo, which provides technology that supports 200+ brand advertisers – including Levi’s and Kimberly-Clark – to manage their search advertising on Amazon (in both North America and Europe) using Amazon Marketing Services.

Oren Stern, Kenshoo’s e-Commerce General Manager – a useful source if you’re writing anything about the growth of Amazon’s ad business – said:

“The fact that our data suggests advertisers bucked the typical seasonal trend and continued to increase their spend on Amazon following the traditional Q4 peak shows that brands are hugely interested in product-led advertising on e-commerce sites such as Amazon.

“This is part of an overall move towards brands wanting to place product led advertising on e-commerce sites such as Amazon because consumers visiting these sites are already in ‘buy-mode’ – they have a very strong intent to make a purchase. Which is why most brands are also seeing consistently higher returns than on other channels.”

“Online retail mega markets like Amazon, Best Buy, Target and Walmart, are now first destinations for customers looking to research and buy products. Advertising on these sites has become increasingly important to reach customers at the critical point of purchase – or in the decision-making process on what to buy.”

“Another attraction of advertising on ecommerce sites such as Amazon is that consumers use them as part of their shopping research phase – not just going there when they want to buy products. For example research by eMarketer suggests people use ecommerce sites to conduct ‘pre-shopping’ research on consumer packaged goods products ahead of going in store to do their shopping.”

“Plus ads on Amazon fit in naturally with the content and information present on the pages where they appear. If you search for a product on Amazon, the ads that come up look very similar to regular product listings and because they are related to your search they are highly engaging. The fact that they are unobtrusive and native in this way means they are clicked on far more than ads on other sites.”