COM 104 Lecture Notes - Lecture 14: Adwords, Polyvore, Google Search
27 Jun 2018
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Amazon merchandising
Amazon.com, whose stated mission it to help people “find, discover and buy
anything online” launched Amazon Product Ads as a cost per click advertising
model to enable item selection beyond what could be purchased on Amazon.com
itself. Amazon Product Ads has since become a high performing ad unit for
sellers who either could or would not sell on the Amazon marketplace due to
strategic concerns, budget limitations, or category competitiveness.
Amazon Product Ads offered sellers in un-gated categories the opportunity to
garner highly qualified traffic from Amazon.com and bring those customers to their
own website. More and more advertisers took advantage of Amazon Product Ads
to advertise their products on Amazon.com, leveraging high volume traffic, yet still
controlling the customer experience, protecting transactional data and maintaining
margins.
Over the years, Amazon has quietly become an advertising platform phenom and
is expected to generate $1.26B in advertising revenue in 2015 (eMarketer). With
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Amazon Product Ads, Amazon successfully followed a strategy of turning what it
knew about is customers into a contextual advertising product that effectively
monetized visitor traffic not yet ready to buy on Amazon.com.
However, Amazon seems now to have clearly recognized that there may be more
value in owning the shopper data as a means to protecting its long-term market
share, as opposed to generating short term online advertising revenue. With the
discontinuation of Amazon Product Ads, Amazon will now be keeping more
customers on its site.
The elimination of APAs will be a disappointment for many retailers. Amazon
Product Ads is a major revenue producer for many CommerceHub customers and
has grown faster than other major CSEs combined.
WHAT IS A BRAND OR RETAILER TO DO?
Merchants considering how to replace the loss of APA driven revenue have a
couple of different options to consider when thinking through their marketing
strategy for the remainder of 2015 and into 2016. Here is quick run-down of our
recommendations.
1. Maximize existing investments in Amazon Product Ads
In the short run, do everything you can to maximize revenue and generate as many
new customers as possible using Product Ads. The countdown has started and
you have three months. If APAs are performing well for you, you should consider
increasing your investment in order to take advantage of the 175M users (March,
2015) who visit Amazon’s websites per month.
2. Evaluate Amazon Text Ads
Officially out of beta, all account holders have now been opted into Amazon Text
Ads. This new ad unit is very similar to Google AdWords and is now starting to
replace real estate on Amazon.com that used to be populated with ads via
AdWords through the Google Search Partner Network.
Last year the Wall Street Journal reported that Amazon was planning to replace
third party ads with a new in-house ad placement platform and was testing new ad
types. Amazon Text Ads is a direct outcome of this announcement. The new Text
Ad program relies on the same Seller Central interface used for Amazon Product
Ads and functions almost identically to an earlier version of AdWords in that it is
CPC based, supports keywords, utilizes keyword match types, includes similar
content, allows daily campaign budgets and offers the ability to schedule start/end
dates for campaigns.
If your strategy doesn’t including selling on Marketplaces for a variety of reasons,
we recommend that you consider testing a small amount of spend against the new
Amazon Text Ad unit and closely watch performance. In fact, CommerceHub did
just this in partnership with one of our clients as part of the Amazon Text Ad pilot
program.
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Document Summary
Amazon. com, whose stated mission it to help people find, discover and buy anything online launched amazon product ads as a cost per click advertising model to enable item selection beyond what could be purchased on amazon. com itself. Amazon product ads has since become a high performing ad unit for sellers who either could or would not sell on the amazon marketplace due to strategic concerns, budget limitations, or category competitiveness. Amazon product ads offered sellers in un-gated categories the opportunity to garner highly qualified traffic from amazon. com and bring those customers to their own website. More and more advertisers took advantage of amazon product ads to advertise their products on amazon. com, leveraging high volume traffic, yet still controlling the customer experience, protecting transactional data and maintaining margins. Over the years, amazon has quietly become an advertising platform phenom and is expected to generate . 26b in advertising revenue in 2015 (emarketer).
