A quiet giant in digital advertising has been hiding in plain sight. But it’s now a rapidly-growing challenger to the two behemoths, Google and Facebook, who collectively own upwards of 70% market share. This disruptive titan has access to immense amounts of consumer transactional data, advanced technology and advertising reach across PCs, phones, TVs and voice assistants. Oh, and it also happens to be the world’s largest retailer, considerably closing the distance between advertisement and purchase. Say hello to Amazon Advertising, the giant well-poised to upend the digital duopoly of those cash cows.
Amazingly, many people, including those in the industry, don’t even realize Amazon is in advertising. The company quietly billed a massive $14.4 billion in 2020 ad revenue, according to eMarketer, yet most advertisers don’t understand the breadth of the opportunities available to them. They may “do Amazon” by buying its near-decade-old product search ads. However, that one tactic only scratches the surface of the ecosystem’s potential. Amazon has built a separate, robust advertising infrastructure that impressively blends technology with enormous amounts of consumer data. All the purchases all of us have made, and the products we have browsed for decades have generated copious amounts of invaluable data. These insights are at the core of the behavioral targeting system Amazon has created.
And that is just the beginning. Let’s add on more Amazon sources: Prime Video, Amazon Music, Whole Foods, Kindle, Amazon Garage, Fire TV and Alexa. Just within the past month, Amazon integrated intricate data from Visa, Experian, IRI, and ComScore (among others) which is precisely matched to masses of Amazon shoppers. Combined, this delivers a portrait of consumers that is remarkably specific. When leveraged in well-structured strategies, this can garner action from intent-filled buyers, at scale, and in fundamentally different ways than any of its advertising competitors.
Bezonomics’ author Brian Dumaine said, “Amazon wants to be the operating system for our lives.” The byproduct of our collective adoption of this system is a windfall of data. Since Amazon is also the engine for online retail, if this trove is wielded correctly, these ads also represent the shortest path from advertising to purchase. Or to put it another way, Amazon knows more about driving a brand’s customers to buy than the brand itself does.
The company’s next key asset is ad inventory, which stretches well beyond the Amazon website on your laptop or phone. Amazon Advertising has a large footprint, serving ads onto computers, mobile phones, tablets, Alexas and giant TVs hanging in living rooms around the globe. From a content standpoint, it has built a custom publisher network of non-Amazon websites, apps and TV networks that vastly increase its possibilities for placing ads.
Put together, all of this technology, data, platforms and content reach that is under Amazon’s purview can be leveraged by a select group of companies to the benefit of their respective clients. Since Amazon always prioritizes the customer’s retail experience, this approach provides them with strong quality control of their ecosystem, and ironically, makes them a wholesaler of advertising services and technology.
The possibilities for a brand can be truly exciting. Imagine browsing for Ray-Ban sunglasses on Amazon.com while having coffee in the morning. That night, you sit down with your children to watch “Kids’ Baking Championship” on your 65-inch TV. Using your Fire TV, you click on the Food Network only to see a commercial for those very same Ray-Ban sunglasses. This is a successful brand and product reinforcement. But now let’s further Amazon-ify it: you simply click your remote—or speak aloud to your Alexa—“buy that.” The world’s largest retailer charges your credit card and ships your new Ray-Bans directly to you.
While this may sound like science fiction, the only piece of this multi-device process that is currently unavailable is the purchase. But it’s coming. Soon. Amazon is the only company that can complete such a full interaction loop seamlessly. This comprehensive consumer journey—from ad to purchase, regardless of platform—is the one advertisers and brand executives have been waiting for their entire careers.
It further shows the increasing role and power that Connected TV (CTV) will yield. CTV is an entertainment channel that was already on the rise. Then the pandemic put jet fuel in its audience growth and made “streaming” an everyday term. Amazon has cultivated its own CTV hardware platform with Fire TV, and in parallel, its own content CTV service with Prime Video. The company’s bifurcated strategy gives it access to ad inventory that runs on Fire TV devices, but also across other hardware including Roku, Apple TV, Samsung TVs and even Xfinity cable boxes. Fire TV and Roku currently boast more than 50 million active users each. Combining all of the streaming platform opportunities ladders up to the scale of cable television. Now, layer in those targeting abilities again, and TV advertising has been given a considerable upgrade.
Finally, to drive increased usage of Prime Video, Amazon has invested heavily in partnerships to broadcast live sports, including the NFL, PGA and Premier League Soccer. These draw audiences in mass, where each viewer leaves a digital fingerprint perfect for precise follow-up advertising the day after the broadcast.
Smartly using the full funnel of Amazon Advertising provides companies with the chance to transform their marketing approach, altogether. Companies who lean into this strategy will stop throwing money at digital interruptions, and start intimately anticipating their customers’ needs and presenting insightful consumer value via their ad units. Further, this new experience should be markedly better for consumers, proving that digital data can actually be used to provide daily benefit. This is an inflection point that leaves much for advertisers to be excited about, not only for its vast promise of growth, but for its natural and necessary evolution. While $15 billion in ad revenue may be a rounding error for Amazon, it foreshadows what is coming from the quiet giant. Advertisers and brands need to get ready.
Jordan Greene is Co-Founder and Chief Media Officer at Alpha Precision Media