How Amazon’s ad network fuelled the 2019 Prime Day – and will continue to do so

How Amazon’s ad network fuelled the 2019 Prime Day – and will continue to do so Alasdair McLean-Foreman is the CEO of Teikametrics, the leading SaaS Retail Optimization Platform (ROP) that helps retailers, brands and agencies grow revenue and increase profitability on Amazon. He earned a Bachelor of Arts in Economics at Harvard University where he was captain of the Track and Field Team and a member of the Great Britain and England national track teams.

The richest man in the world, Jeff Bezos, has even more reason to celebrate. Amazon’s 48-hour Prime Day event this year just provided a glimpse of what ecommerce — and most likely, all commerce — might look like in the years to come.

Almost half of online shoppers in the US now begin their product searches on Amazon, compared with 35 percent who turn first to Google. Bezos is also pushing to broaden Amazon’s influence in brick-and-mortar operations, offering Prime member discounts at Amazon-owned Whole Foods markets and the soon-to-be-rolled-out, largely automated, Amazon Go stores.

The latest evidence of the extent to which Bezos has changed the DNA of retail came during the July 15-16, 2019, Prime Day online sales marathon. According to Forbes retail columnist Pamela N. Danziger, last year’s Prime Day resulted in 100 million items sold worldwide in just 36 hours.

This year’s numbers proved even more staggering, as Amazon Prime members — 200,000 more of them every month — swarmed to find Prime Day discounts. Together, they pushed the number of items sold to 175,000,000 — exceeding last year’s Black Friday/Cyber Monday tally and becoming what the company claimed was the “largest shopping event in Amazon history.”

Total sales revenue was expected to grow from $3.8 billion in 2018 to $5.8 billion this year, according to Coresight Research. Amazon has not yet released overall sales figures for Prime Day 2019, but the company announced that sales for small- and medium-sized third-party sellers “far exceeded $2 billion” this year.

Just five years after its creation, Prime Day 2019 makes it clear that Amazon has created a “Christmas in July.” That’s true not only for bargain-hunting consumers, but also for brands — especially those that take advantage of Amazon’s advertising resources to raise their products above the rest.

Be found in the crowd

Amazon has surged past Walmart to become the world’s biggest retailer in part due to its increasing emphasis on brands selling products directly to consumers. In addition to luring shoppers with healthy discounts, brands using Prime Day promotions can expect sales to grow three- or four-fold during the two-day shopping marathon — as well to enjoy a lingering “halo effect” that swells consumer spending for two weeks or more after it’s over.

While some consumers come to Amazon in search of familiar brands, most arrive — on Prime Day as well as the rest of the year — open to competing products that enjoy strong customer reviews or offer competitive prices.

The best way to attract those shoppers is to make intelligent use of Amazon’s growing array of advertising tools. They include using popular keywords in Seller Central, offering discount coupons, making strategic use of sponsored ads and taking advantage of the Showcase template, which allows brands to promote a selection of products on Amazon and then link shoppers back to a company’s own site. According to Amazon, companies that purchased sponsored ads enjoyed a 500 percent increase in ad-attributed sales during Prime Day 2018 — a boost that an increasing number of brands are benefitting from this year.

Reshaping the face of advertising

Just as Amazon has rewritten the rules of retail, it promises to redefine advertising as well. While total Amazon ad revenue still lags behind Google and Facebook, the growth rate of its ad business is racing ahead.

Amazon’s ad revenue is currently increasing at a rate of 120 percent a year, compared to 69 percent for Facebook and 50 percent for Google, according to The Information. And Amazon’s take will only get larger. A survey of ad buyers in January, 2019, found that more than half planned to boost their ad spending on Amazon this year — with nearly two-thirds saying they would divert money spent on other digital platforms to reach that goal.

Clearly, Amazon advertising is a game changer. Brands that want to rise above the competition on Amazon need to embrace these new marketing tools to achieve faster growth in the world’s largest marketplace.

(c) Stanescu

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