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As one of the earliest internet success stories, Amazon’s evolution is proof positive that adaptation and agility are essential to building a loyal customer base. Since its beginnings as an online bookstore almost 30 years ago, Amazon has branched out to entertainment, cloud computing, consumer devices, and much more, meeting evolving customer wants and needs at every turn, and building a large, loyal customer base of hundreds of millions of active customer accounts worldwide.
Amazon first introduced advertising experiences in its Store in the mid-2000s. Today Amazon Ads is helping advertisers to reach the right audiences across its diverse portfolio, and making Amazon into a bona fide media channel — one where global consumers said they most appreciated seeing ads, according to Kantar’s 2022 Ad Equity rankings.
The origins of Amazon Ads as we know it
To hear vice president of Amazon Ads APAC Shinji Tsukamoto tell it, the evolution of Amazon Ads is inherently intertwined with that of Amazon itself. Over 10 years ago, Amazon Ads launched in Japan with display ads, which businesses would use to help drive sales on Amazon.
As Amazon Ads has expanded its offerings to include the likes of Fire TV and Twitch — which Tsukamoto noted is “very much a place for brand-building” — Amazon Ads gradually morphed into a full-funnel service provider.
“Across APAC, our advertising customers are not just looking at us as a retail solution, but for branding as well,” observed Tsukamoto. “We’re building across the full breadth of marketers’ core needs — reach, relevance, and results.”
Besides the advertising opportunities available across its stores’ channels, in many countries Amazon Ads also offers placements across a selection of its owned-and-operated sites, Fire tablets, and Fire TV, as well as programmatic display and video advertising on third-party sites and apps via Amazon DSP (demand-side platform).
This range of solutions has enabled Amazon Ads to help brands adapt to shifting consumer behaviours affected by the pandemic, including trends such as online grocery shopping, cord-cutting, and the adoption of voice technology.
Working backwards from the customer
That philosophy of working backwards from the customer — what Amazon calls customer obsession — permeates everything the company does, including advertising.
Effective and innovative work, in Tsukamoto’s view, is about streamlining products and services to slot seamlessly into customers’ daily lives. “If I see an ad for Coca-Cola on Amazon while I’m out and about, I’m going to a convenience store or to a vending machine to buy one. You don’t have to bring people to the buy spot, you can inspire them where they are.”
“The way that consumers shop has been evolving,” he continued. “There’s an organic shift of more customers moving fluidly across channels, between research and purchase mode, to shop for more types of products across more devices.”
“A lot of ‘traditional’ marketing notions — such as the linear journey from awareness to purchase, or the notion of high- vs. low-consideration purchases — have been upended,” said Tsukamoto. “It’s now about being present where and when customers want to shop, and engaging with them in the right ways throughout a non-linear decision journey.”
“We’re seeing more and more evidence that combining tactics across awareness and discovery, programmatic, remarketing, and performance advertising such as Sponsored Products has a greater impact for brands over time,” said Tsukamoto. “Putting all of these pieces together in the right way is complex. But retail marketing can also be extremely valuable not just for driving sales, but also for awareness and brand building,” he continued.
Amazon Ads offers complementary advertising products that run the gamut from branding initiatives like Custom Solutions to contextual, cost-per-click ads that Tsukamoto believes “flex with customer intent to create useful shopping and discovery experiences.”
“With all of the recent changes in consumer behaviour, advertisers need to be able to reach audiences across more channels, whether they are watching television, listening to their favourite music or podcast, or waiting for that much-anticipated package on their doorstep,” Tsukamoto concluded.
No half measures
Accordingly, adjusting for a fractured media landscape and changing consumer behaviours also requires the adjustment of measurement methods.
Acknowledging the “challenges” presented by cross-media measurement and transparency, Tsukamoto said, “advertisers want to know what’s working across each stage of the customer journey to understand how their media performs across different channels, receive faster insights to act on, and understand what outcomes their digital marketing is driving outside of sales.”
In an effort to help advertisers measure campaigns more flexibly — beyond return on ad spend (ROAS) — Amazon Ads has invested in solutions such as Amazon Marketing Cloud (AMC) and Brand Metrics.
Tsukamoto describes Brand Metrics as a “self-service solution” that “goes beyond ad-attributed metrics, enabling brands to quantify how awareness and consideration interactions translate into the growth of their business in the Amazon store.” Included in its array of different metrics are engaged shopper rate, a brand’s total audience size in relation to peers in their category, number of brand searches, and return on engagement (ROE). Meanwhile, AMC is a holistic measurement solution which allows advertisers to analyse Amazon DSP and sponsored ads signals together and generate aggregated, and anonymous, actionable insights.
What the future holds for Amazon Ads in APAC
Within APAC, Tsukamoto has observed an uptick in the adoption of brand-building tools as more advertisers begin to focus on upper-funnel goals in addition to conversions.
Among those tools are promotions that aren’t connected to Amazon’s online store, such as in-stream advertising for live sports on Prime Video. A recent example of this is the Prime Video Presents Live Boxing event held earlier this year, which Tsukamoto described as “significantly well-received” with an 85%1 satisfaction rate among customers who viewed ads during the event.
Other innovations in which Amazon Ads is investing in certain countries include its interactive livestreaming service, Twitch, which Tsukamoto described as “a huge vehicle in the upper funnel.” Done right, commerce becomes “the by-product of making great content and building a community,” said Tsukamoto.
Touching on the goals that Amazon Ads has for the APAC region, Tsukamoto said, “We’ll continue to work backwards from brands’ needs and provide reliable and actionable insights to help them engage customers wherever they are along the journey. Amazon isn’t simply a Store for lower funnel conversions; Amazon is also a place for raising brand awareness.”
1 Dentsu Macromill Insight, 2022
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