Why Advertise on Amazon

Although the figures in terms of advertising revenue are far from comparable, Amazon has positioned itself, surpassing Twitter, as the third most important advertising platform in the world behind the giants Google and Facebook. This growth has not ended and, as can be seen in the following graph provided by Statista, Amazon is expected to give a lot to talk about in the coming years. Its advertising revenue is estimated to increase 26.4% this year.

Throughout this article, we will try to explain the reason for this success and show the possibilities that Amazon offers as an advertising platform.

Advantages and disadvantages

Like any advertising platform, Amazon has advantages and disadvantages. Some of the pros that have helped and will help the success of this platform are, for example:

• Users who come to Amazon are not looking for information, they want to buy.
• Amazon has a large amount of data on user behavior that other platforms lack (for example, how they convert or what they buy), data that it uses in favor of advertisers who decide to use it.
• By advertising on Amazon and increasing sales, SEO within the Amazon platform also improves.
• The CPC is lower than in AdWords or Facebook.

But Amazon Advertising also has disadvantages and some of them are:

• Selling through Amazon means 20% less profit, a percentage that the platform remains.
• More and more sellers want to have a presence on Amazon and this causes tougher competition.
• Amazon can prioritize its own products over others.

Ad types

Ads on Amazon are primarily aimed at achieving three objectives:

1. Increase the sales of the advertiser’s products.

For this purpose, the ads will appear at the top of the search results page.

This type of ad is perfect for those advertisers who, in addition to increasing sales, want to increase brand awareness or even publicize a new brand or product line. In addition, it allows showing several products at the same time.

2. Generate traffic outside of Amazon

These types of ads are aimed at those advertisers who prefer that users convert outside of Amazon. The formats offered to achieve this are not innovative at all, but Amazon continues to bet on traditional display formats, such as banners, video, etc.

3. Increase the downloads of an App.

If the objective is not the sale, but to achieve the increase of the downloads of an app, Amazon offers this format. With it, users will see the ad prompting them to download the app when they are using the Marketplace application itself.

One of the drawbacks of this format is that the ads will only be shown to those users using a Fire or Android operating system.

How does Amazon Advertising work?

After knowing the advantages and disadvantages and the different types of ads that the Amazon advertising platform offers, the question that arises is: how does it work?

Well, in terms of the account structure, the operation is similar to that of AdWords or Facebook, which, if you have already used any of the above, surely facilitates the work. The structure would be:

Account> campaign> ad group> ad> keyword

Unlike the aforementioned platforms, in Amazon Advertising all ads refer to a specific product, that is, there is no possibility of making brand ads globally. The platform, to help those who have a large number of products, will automatically generate these ads. In addition, all ads must be linked to a product page as a landing page.

It is necessary to do a previous study of keywords to know which ones work better and which ones do not offer interesting profitability to the advertiser. For this, there are several possibilities.

Finally, it should be mentioned that the platform uses a bidding system to set the price of its ads: it weighs the level of quality and quantity of the impressions and the advertiser sets a maximum price that it is willing to reach. In this way, the advertiser only pays for the clicks on their ad.

Because of all this, more and more advertisers are relying on Amazon to advertise their products and achieve their goals. One thing is clear: Amazon has become an effective option as an advertising channel that advertisers and Amazon ungating services providers and agencies should keep in mind and that will give much to talk about.