Amazon has over 300 million customers around the world, 20 percent of whom make a purchase at least once a week. This didn’t happen by accident—Amazon’s rapid expansion is tending to homogenize the online retail sector. The sheer number of motivated buyers is what makes the online retailer, and its almost limitless data cache, uniquely positioned to enter the ad space with the serious advantage of knowing who wants to purchase what, and when.
Google and Facebook have dominated the ad space for years, and the addition of a new player brings lots of room to shake things up for publishers and e-commerce retailers looking for new traffic sources. When Amazon enters the field, there are a few things that Mr. Bezos surely will capitalize upon, allowing the rest of the field to take note of what works and what doesn’t.
Data from every touchpoint
Amazon’s relationship with data along every touchpoint of the user’s experience from search to sale and beyond cannot be understated as its largest selling point for advertisers looking to engage and interact with audiences they haven’t yet reached. What differentiates Amazon from Facebook and Google is that only Amazon can leverage insights based on 20 years of observed shopping behaviors. Amazon has a sizeable amount of user data as it is; working with AI will provide the edge they need to massage this data and get the most out of it. Data issues aside, Amazon knows that this is about performance not branding.
Once a shopper is on Amazon, there is a high degree of certainty that they are likely to take an action, specifically purchase something. Because of this willingness to buy one thing, it will be much easier to encourage a second purchase, be it a complementary item or a competing product. Past purchases and search history also give Amazon a clue as to what shoppers are interested in, another serious advantage to encourage action and capitalize on previously abandoned carts.
For e-commerce retailers, these action-oriented operations put Amazon ads on a pedestal. Instead of finding users who are researching or browsing on Google, or catching up with friends and top stories on Facebook, retailers advertising on Amazon will be engaging with customers who are ready and willing to spend their money.
Targeting and performance metrics have already shown their efficacy in every online vertical—companies are successfully using analytics to make real-time business decisions, and artificial intelligence to process huge amounts of data. Amazon surely feels the push to bring targeting to the next level in order to deliver ad placements that bring the right potential buyer at the right micro-moments to the brand.
We’re always turning towards our phones, and in an advertiser’s perfect world, each of those opportunities will be used to reach buyers with exactly what they want. Based on Amazon’s enormous data holdings and highly sophisticated analytics—in use by some of the biggest brands in the world—this should be an achievable feat. This is also a key area where Amazon can learn from its predecessors by taking time to assess the best ad format. Ads have to strike the right balance of encouraging a purchase without interrupting a user as they browse, shop or purchase.
Blending digital and physical
By working with Amazon, retailers that haven’t already completed the digital transformation (perhaps they aren’t yet on mobile) will now have the chance to work with a service that stands to offer the full Monty. Retailers that are looking for an excuse to get on mobile have the chance to not only work with Amazon’s performance measurement capabilities, but online inventory tracking and the multi-step logistics to get the item from the warehouse to its new owner. This all in one service could be what it takes for some retailers to step into mobile and begin operating with the new consumer standards.
It’s all in the packaging
At the end of the day, no matter what Amazon offers, it will need to deliver it with a great user interface and high-yield capabilities which are easily represented and digestible. That means that audience segmentation, KPI review, campaign tracking capabilities (along with the physical aspects of Amazon’s services) will need to be displayed in a way that users can immediately understand what parts of their strategy are working or not, areas of overlooked opportunity and how to mitigate loss.
Inbal Lavi is CEO of Webpals Group.