Amazon Advertising revenue which include Amazon Sponsored Products, Sponsored Brands, Display Ads and Amazon demand-side platform is still growing at a healthy pace, although not at the dizzying three digit percentage quarterly growth we saw at this time last year. That’s fair, Amazon Advertising is becoming a more established part of of the eco-system and the 37% year on year growth comes on top of the 129% growth for the same quarter last year.
37% growth in Amazon Advertising revenue (up a percent from 36% yr on yr growth in Q1 2019) is still phenomenal and shows the importance that retailers and brands are putting on Amazon Advertising – whether it be Amazon Sponsored Products or Amazon Sponsored Brands, the spend is increasing and having closed out 2018 with a $10.1bn Amazon Advertising business unit, the signs are that Amazon are on track for at least a $12bn advertising revenue in 2019, if not higher when the inevitable bump comes in Q4 for the peak Black Friday and Christmas season.
(Amazon’s reported figure for Amazon Advertising revenue primarily includes sales of advertising services, as well as sales related to their other service offerings.)
What’s particularly interesting to note is that Merkle research suggests that that while Amazon Sponsored Products and Sponsored Brands spend grew 19% and 77% Y/Y, respectively, sales grew by at least 100% on both formats. This means that currently your returns should continue to outgrow your investments and, for those that get it right, Amazon Advertising is paying dividends.
Merkle also point out that only a third of clicks on Amazon Sponsored Products came from search results pages. Single Product Detail pages accounted for 41% of traffic so with the relatively new ability to adjust bids based on placement the Single Product Detail Page is where to focus your spend. This gives the ability to snatch a sale at the last moment from a competitor’s product so is well worth taking the time to optimise your campaigns.
3 Responses
It is a shame that you have to pay more to get exposure, deep pockets will win a high majority of the time over someone who spends time and experience optimising a Product Detail Page, conforming to the listing policies/best practices etc…
I wonder if getting your own brand on Amazon, having a big launch budget for ads, selling via FBA and using FB groups for fake reviews is the best way to go big on Amazon – assuming of course you have a product that people actually will want.
I do not condone this, but IMHO it does seem that a lot of the top sales ranking products come from this new way of marketing/product exposure on Amazon.
Managing ad campaigns is yet another job and more money being spent out, but the problem is that as your competitors are doing it then you should do or you risk being left behind.
Amazon is quickly becoming the new Google AdWords – for physical products. The situation in the UK/EU is not that bad yet, but on Amazon US, click prices are ridiculously high – even for very cheap products. You can only wonder how anyone can run a business when they have to pay $5+ per click on a $10 item. There’s no way you can make a profit. I don’t blame Amazon though – they’re in this game to make money and the number of sellers, for same products, is increasing – they’re simply taking advantage of the situation.
In the future (partially already now), the only way to make this work for people with small budgets is to go after long-tail keyword products. Ones that have a few hundred £ in sales per month and don’t attract 90%+ of sellers (as the sales volume is too low for them). And this means – building a portfolio of many such long-tail keyword products to create a substantially sized business.