It's not just consumers spending more money than ever with Amazon. Three-quarters of Amazon sellers spend ad budgets with the eCommerce giant. Rapid growth in ads revenue is starting to put Amazon in competition with industry leaders Google and Facebook.
As budgets increase, successful marketing teams will need to prioritise an agile advertising strategy, looking ahead to future trends. What has worked before will not be enough to stay competitive.
2021 is the age of programmatic advertising
Our experts expect 2021 to herald an age of programmatic advertising. With Google ads continuing to limit access to search query data and blocking third-party cookies from several popular search browsers, advertisers are becoming more reliant on first-party data to formulate successful advertising strategies.
Amazon DSP enables advertisers to programmatically buy display, video and audio ads on and off Amazon. It holds valuable data about consumer shopping habits, which advertisers can use to discover over 40,000 audience segments to target and automate the most effective ad placement - without needing to know any of the data they access.
Personalised advertising moves to centre stage
Personalised advertising is also likely to take centre stage this year across the entire conversion funnel. Advertisers can no longer rely on targeting keywords and expect success. Consumers see many more semi-bespoke adverts, which are hyper-engaging compared to generic ads.
As a result, our team of experts predict that Amazon's ad console will begin to shift more towards personalised ads on the marketplace. Most Amazon sellers currently use PPC keywords, and these will always be popular on the platform. But as Amazon builds up data banks around each consumer, the company will look to create more advanced targeting strategies; we've seen this recently with the addition of 'views remarketing' in Sponsored Display. Brands that get early insight into any new updates, for example, in Sponsored Brand or Sponsored Display offerings, should aim to make the most of the updates quickly to get a head start in the hyper-competitive ad space.
Short, engaging video ads boost engagement
Another trend we can expect to amplify this year is video advertising. It's versatile and, with the rise of TikTok over the past year, it's become an expectation that advertisers can create simple yet engaging short-form videos. What's more, brands that learn to use video in innovative ways tend to have higher engagement rates over static ads. It won't be long before these sorts of short-form ads integrate into Amazon Prime Video.
Likewise, the pandemic has undeniably caused consumers to spend more time connected to their mobile devices than ever. As a result, mobile advertising has become a necessity for advertising success. We should expect Amazon to introduce new features on its mobile app to further engage with mobile shoppers.
“Story” ad format could be coming to Amazon
One prediction is that the "story" ad format, which rose to popularity on Facebook and Instagram, may soon be established on Amazon for brands looking to promote their brand story to shoppers. Amazon 'Posts' is already in beta in the US; it will allow brands to establish their identity on Amazon beyond their brand page to increase customer loyalty and conversions.
Testing the latest ads trends is no substitute for strategy
Keeping up with trends and understanding how to adopt them into your ads strategy will be key to stand out. But it's also essential that they don't lose sight of the basics of Amazon advertising. Most advertisers know a potential customer will rarely convert after seeing only one advertisement. Brands need to think holistically to ensure that they can increase digital touchpoints and connect advertising activity with discounts or product launches.
Amazon is a competitive advertising space. You not only have to attract new shoppers but defend your position and limit the risk of consumers purchasing a competitor product. Continuously review your advertising investment if you wish to maintain and grow versus the market. Looking to future trends is essential, but assessing past performance is just as important.
As Amazon advertising continues to narrow the gap between the giants of advertising, the company will undoubtedly be making changes in line with these trends to improve their service for the hordes of advertisers flocking to Amazon. But in a hyper competitive environment, only the brands that prioritise innovative advertising and respond quickly to these changes will feel the full benefit of Amazon's advertising boom.
Ready to take your Amazon growth to the next level? Take a look at our new eBookThe Amazon Success Blueprint: Achieving Sustained Growth on Amazon.
Bridget Morrow, Chief Client Officer