John Denny of CAVU Venture Partners, which invests in consumer brands like One Brands, explained why to the New York Times.
At the simplest level, a business can use the e-commerce firm’s data to retarget people who have looked at its product pages, but One Brands can also target new consumers via lookalike audiences whose shopping behavior is deemed similar to people who have bought its protein bars before.
And having found such potential customers, Amazon can automatically show them different ads based on their particular shopping behaviors, whether that’s carrying out extensive research, for example, or having items delivered regularly.
“Early tests are showing this is insanely powerful,” Denny said. “They can do this and nobody else can come close.”
Accordingly an ecosystem of agencies has developed around Amazon, offering advice on how brands can best utilize the platform – from managing the entire process (as WARC’s sister company Edge by Ascential does) or specific parts of it.
Quartile Digital, an example of the latter, analyzed the performance of search ads for snack brand Just The Cheese and discovered people searching for two unrelated low-carb products were also buying cheese bars.
By targeting Amazon customer buying those categories with display ads across the web, the brand was able to generate almost 22,000 clicks and more than 4,000 orders – a 20% conversion rate that Daniel Knijnik, co-founder of Quartile Digital, described as “amazing”.
“That is the kind of powerful granularity for building the target audiences that just Amazon can give you,” he said.
With 51% of product searches in the US now beginning on Amazon, WARC’s Marketers’ Toolkit 2019 has noted that being on Amazon is becoming a commercial obligation – and an associated survey indicated a widespread intention to increase spend on Amazon ads in 2019.
But brands face a trade-off when it comes to selling products on Amazon’s e-commerce platform, the report cautioned – “namely, entrusting the consumer experience to a third party in exchange for accessing a massive potential audience”.
Sourced from New York Times; additional content by WARC staff