Amazon seeks ad growth

05 April 2012

NEW YORK: Amazon, the ecommerce giant, is seeking to attract consumer packaged goods companies as advertisers on its pages, thus tapping a major source of potential revenue.

Lisa Utzschneider, Amazon's VP, global advertising, argued that boosting ad sales to brand owners in this sector constituted a "huge opportunity". She was speaking at ad:tech San Francisco, Warc's coverage of which can be accessed here.

"There are millions of moms researching products and buying online," Utzschneider said, according to Reuters. "Moms have $2tr dollars of annual spending power."

Figures from eMarketer, the insights provider, suggest companies in the consumer packaged goods industry will allocate $5bn to advertising their products on the internet in 2015, doubling the total logged in 2011.

Amazon first began hosting third party ads on its web platforms six years ago, and now offers marketers access to customers through its Kindle ereaders and tablets in the same way.

Its advertising operations have just been extended to Canada and France, joining Germany, Japan, the UK and US among the countries where the firm is attempting to drive up ad sales.

One recent campaign utilising Amazon's services was run by Kimberly Clark, the health and personal care group, which bought ads for Huggies Slip-On nappies on Amazon's sites and Kindle devices.

Some executions provided a $2 discount and an extra 20% off if shoppers ordered via Amazon's "subscribe and save" programme, promising lower prices on monthly purchases. User reviews similarly featured in certain formats.

Amazon reported the intent to buy rose 14 times when individuals were exposed to these ads, and that members of its audience were 30 times more likely to research the product in question. Sales on mobile devices also doubled.

Currently, only 4% of customers purchase consumer packaged goods lines from Amazon, presenting significant room for growth. "CPG marketers love that opportunity," said Utzschneider,

Ben Schachter, an analyst at Macquarie Securities, stated that Amazon is at a nascent stage. "We have been watching Amazon's progress on its advertising opportunities closely and believe them when they say that they are just getting started," he said.

"The key is being able to use massive amounts of personalized shopping data to better target ads. Given Amazon's knowledge of users' buying habits, they are very well positioned to deliver on the potential of better targeted, and therefore more valuable, advertising experiences."

Data sourced from Reuters; additional content by Warc staff