Amazon reveals how it thinks about advertising

The retail giant is rapidly building out its ad business but says marketers should think of it as a way to add value to the customer, not just as a sales tool.

amazon advertising

Amazon has advised marketers to rethink how they might advertise to consumers on its site to consider how they can add value to the customer journey rather than just use it to boost sales.

Speaking at the Dmexco ad tech conference in Germany this week, Amazon’s director of international ad sales Dan Wright says: “Traditionally, people think if they sell products on Amazon they want to sell more products or start advertising to create value in that way. But the [real opportunity] is how do you solve a problem for the customer all the way through their journey in a way that is helpful to them.

“If you do that through different engagement points, be it marketing on a box that’s shipped to a house or banners on a website, if that value is created through the process of helping the customer on their journey across all these different touchpoints, then you as a brand get value.”

Wright said it is for that reason that Amazon “doesn’t think about advertising as branding and performance in the traditional way”.

“If you’re doing the right thing for the customer, that will come through,” he added.

Estimates as to the size of Amazon’s ad business vary but WPP boss Sir Martin Sorrell reckons it is around $2.5bn annually, making it a growing player but still well behind Facebook and Google. However, it is becoming a bigger force and brands including Procter & Gamble and Unilever have spoken about how they are working with the company.

READ MORE: Can Amazon put an end to Google and Facebook’s digital duopoly?

P&G’s chief brand officer Marc Pritchard, speaking separately at Dmexco, said: “We’re teaming up with ecommerce players like Amazon and Alibaba so we can use their unique consumer ID data and reach consumers precisely when they’re ready to buy.”

The opportunities in voice search

One of the big areas of opportunity for brands wanting to advertise on Amazon is in voice. Wright said there are now 20,000 ‘skills’ on its Alexa personal assistant, with 600 created just in the last week.

However, Wright said brands must once again ensure they are adding value to the customer experience, as well as trying to “surprise and delight” customers if they want the skill to be a success. Marketing the skill is also important to ensure people know it exists and how it works.

“Developers and designers assume that people just know how to activate and engage with a skill so when you do the advertising about the skill its important to have an experience that the consumer comes to and can understand what the skill does and how to engage with it. You have to be very prescriptive about the initial engagement and the development. If that is done correctly it leads to a value-added experience,” he explained.

Voice is of growing importance to advertisers. Research by Microsoft and iProspect has found that 20% of searches are currently voice initiated, with that expected to rise to 50% by 2020. And iProspect’s global chief strategy officer Shenda Loughnane said that opens up big opportunities for brands to better understand intent.

“We used to say that search was the world’s largest consumer database. Voice takes that to a whole other level. In a text environment you might type ‘weather Cologne’ but in a voice context you might ask ‘is it going to rain on Thursday in Cologne’. We now know the day and what they are concerned about and we suddenly have rich contextual intent that we can play with,” she said.

“Voice allows us to match intent and the context of that intent.”