Amazon Ad Business Strategy
According to most ecommerce experts, Amazon’s ad business are set to rise in 2018.This is despite the fact that Google and Facebook have over the years managed to maintain a tight grip on the ad business sector. Some clear indicators of the company’s expected growth are its yearly upswings in terms of ad revenue and its focus on voice and smart speakers, both of which have resulted in marketers keeping a close eye on the firm to see what it does next.
Navigating Amazon from an advertising aspect is quite difficult. For starters, the whole idea of advertising is currently somewhat of a rounding error in regards to revenue for Amazon, whilst for Google, it is literally the backbone of the company.
There are basically two main platforms that broker advertising and partnerships at Amazon that operate independently of each other. The first one is AMG (Amazon Media Group), which is responsible for brand integration. The other is AMS (Amazon Media Services), which operates on an auction-based, search-type model. Even though it is the latter that is more similar to Google’s foundation, some experts still believe that AMG receives more of the revenue earned.
With the way things stand right now, we are yet to see if Amazon can make a change towards voice technology in order to beat Google at their own craft, just like Apple did with Microsoft and Nokia, by beating them to the punch in the race for Smartphone’s.
There have been rumors that Amazon has is in discussions with major brands like P&G on how such a model would play out. It will also be no surprise if Amazon makes a call to FMCG to get their take since they are considered to be priority customers. For the brands that do not sell any of their products on Amazon, they will likely find themselves a little bit further down the pecking order of things. This is mainly because Amazon has a limited budget for advertising, and will therefore prioritize the biggest opportunities or avenues for growing revenue through the platform. This is especially true when you consider their exceptional expertise in generating high volumes of adjacent revenue.
With Amazon Video and Amazon Prime subscriptions continuing to rise, the company now has a great opportunity to offer significant value to brands. Amazon is also expected to continue investing in original content productions like Kindle, which accounts for 18% of its revenues, in order to garner more attention amongst users.
So one may ask what all these changes mean for Amazon. For starters, some experts believe that Amazon ads are likely to experience a few glitches here and there before they actually succeed. It is also important to remember just how good Amazon is at experimenting with new concepts. Over the years, they have managed to learn from their mistakes in other projects, and this time will be no different. In addition, with Facebook and Google experiencing their own set of challenges in relation to filter bubbles and brand safety, Amazon can remain focused and steadfast on their new agenda.