Amazon is a puzzle to even the savviest marketers. While for many brands it's a direct rival, it's also a place to sell products and buy ads. Friend or foe, CMOs need to bone up on Amazon.
"It's absolutely critical," says Christopher Apostle, exec VP and head of performance at Havas Media Group. "If you haven't had the opportunity to understand the Amazon marketplace, you need to."
This year, Amazon prioritized its advertising business, overhauling its platform to make its offerings easier to understand. The reorganized ad platform is now simply called Amazon Advertising, which encompasses marketing services, the media group and programmatic advertising.
While the business is simpler than it was a year ago, Amazon is still a multiheaded shopping beast that requires some expertise.
The advertising side can be broken down into three areas: search, display and video. Ads can run on Amazon and its online properties like IMDb and Fire TV, or they can appear on third-party websites and apps that use Amazon's demand-side platform.
But aside from the paid ads, there's also an unpaid side of Amazon, like product-listing pages, brand stores and customer reviews.
"When you work with Amazon, you've got to take some time to identify how each channel can drive a specific objective," says Dan Pereira, group director of commerce strategy at VMLY&R. "Video could be great at awareness, but won't necessarily drive sales. Some ad placements are good at driving sales but not great at getting impressions."
How to organize your team
"More e-commerce teams are integrating the digital marketing team and the folks responsible for shopper marketing," says Kerry Curran, managing partner of marketing integration at Catalyst, a marketing research firm.
That's essential, because the shopper team might be schooled in writing catchy product descriptions, but not understand the basics of setting keywords in an ad campaign.
Amazon has a retail analytics platform, which shows a brand what products are in stock, demand forecasts, sales and other stats. But the ad platform and retail analytics are separate platforms within Amazon, and it can be difficult to connect those dots, says George Manas, president of Resolution Media.
Agencies are able to do some of that legwork for brands. They can also help analyze ad buys across Google, Facebook and Amazon, and on ad platforms from retail rivals like Walmart.
Understanding what's selling well on Amazon could help shape decisions on what to advertise on other platforms.
Also, this year, Amazon has been testing a conversion pixel, a piece of code brands insert in ads that run outside of Amazon. The pixel can show when an ad on another site leads to a sale on Amazon.
What advertisers find hard to track is how much Amazon is driving new customers versus a consumer who might have bought the product anyway through another retailer, says Mike Seiler, director of search and shopper marketing at AKQA.
Voice and video plans
Amazon doesn't have any ad offerings to buy prominent placement within the Alexa ecosystem, but there are ways to try to get noticed there. For instance, more brands are including Alexa commands on their packaging and in their ads, letting people know they have an integration with the device.
Some brands are also able to send a push notification to phones when a consumer mentions their products to Alexa. If a person tells Alexa to buy a specific brand, the push notification alerts the person to a dynamic shopping page on mobile with more options and products to peruse.
Amazon is also making strides in video with its Fire TV, which streams apps like Amazon Prime, Hulu, HBO, CBS, Netflix and other ad-supported content. Amazon delivers ads into shows on Fire TV.
Watch out for the CRAP list, as in "can't realize a profit." Amazon will remove products if they're not profitable for the company, which means a brand can't advertise that item until it adjusts its price to guarantee a profit. Amazon does not reveal exactly how it determines what it considers profitable, because that can vary by product and brand.
Monitor your inventory
If a popular product is out of stock, Amazon will penalize brands in its algorithm if they can't fulfill orders, and that can hurt how a brand appears in search results.
Prime Day is a high-traffic day, so there is more ad inventory. If you don't tell Amazon to cut you off from buying ads, you could go broke, Curran says. You might even want to consider skipping advertising on big days like Prime Day. Amazon sells special promotions on its biggest days, starting at hundreds of thousands of dollars, according to advertisers, and Amazon often applies high-pressure tactics to get brands to pull the trigger. It's important for brands to plan ahead and set aside money in case they want to try these special opportunities.
Be careful. Amazon could launch a rival product to your own at any moment. It's important to consider how you spend your media dollars on Amazon and how much data you share with the company.