Amazon marketing channel poised for growth

NEW YORK — North American marketers are more likely to increase their marketing budgets for Amazon than they are for Google, Bing, Facebook or Twitter, according to new research published today.

The Amazon-focused study by ClickZ Intelligence, produced in partnership with Catalyst, part of GroupM, found that 63% of companies advertising on Amazon are planning to increase this budget in the next 12 months, compared with 54% for Google, 53% for Facebook, 27% for Bing and 23% for Twitter. The report also found that only 15% of marketers agree they are using Amazon Marketing Services to its full potential, while only 17% say they have a fully defined AMS strategy.

To compile the report, ClickZ surveyed more than 250 North America–based business-to-consumer marketers in July 2017, and conducted in-depth interviews with those actively using Amazon as a marketing and sales platform for their own brands or on behalf of their clients.

The huge reach of Amazon makes it an increasingly attractive platform for advertisers, with AMS paid search products gaining traction with brands and agencies that are benefiting from impressive return on advertising spend, according to the report. As part of its research, ClickZ also carried out in August 2017 an online survey of 1,600 U.S. consumers, looking at usage of Amazon, and comparing research and buying behavior for eight categories of retail, including grocery, clothing, home electronics and pet care. Sixty-six percent of consumers surveyed said they bought clothing from Amazon in the previous 12 months, compared with 64% for personal care products and 63% for furniture or home décor.

Only 43% of consumers bought grocery products through Amazon in the last 12 months; however, according to the research, this figure is set to grow as Amazon scales up both AmazonFresh and Amazon Prime Pantry programs following its acquisition of Whole Foods Market.

“Today, it's not enough to simply spend more with Amazon. With multi-factored opportunities for product promotion, brand investment needs to be expertly managed for maximum return. In this age of Amazon, brands must be strategic, savvy and internally integrated to maximize sales,” said Kerry Curran, managing partner, marketing integration, Catalyst.

Amazon is well positioned to increase its market share for paid search advertising, and it’s thanks to its transactional data. “Amazon knows who you are and what you are purchasing,” explained Chris Humber, head of search, Catalyst/GroupM. “It's the Holy Grail, and what Google would like to have — the missing piece that allows Amazon to move from predictive to prescriptive search, so they can recommend proactively.”

The research also explored the use of Amazon's Alexa Voice Service by consumers, and the extent to which brands are planning for the growth of voice search. According to the consumer survey, 14% of consumers own an Amazon Echo, and an additional 32% are considering it. The marketer survey found that only 15% of businesses have developed “Skills” on Alexa, with an additional 23% of companies planning to do so later this year.

Click here for the complete report.

 

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