Triumph in the Age of Amazon
The key to Amazon’s dominance is a business model predicated upon continual growth. For consumers, this manifests itself as an endless stream of e-commerce evolutions. Some are breakthrough, like augmented reality shopping. Some appear flawed, like Amazon Key. Alongside those innovations, however, come the inevitable increase in discounts.
This has made Amazon a force capable of redefining everything and everyone in its path – from brands to retailers to technology platforms, even content creators. Just ask Nike. Earlier this year, as its market share continued eroding, the sneaker giant empowered Amazon to sell its apparel directly. What’s next, Brett Favre playing for the Vikings? In this era of corporate Darwinism, the default option has become play nice with Amazon. And, to an extent, this is valid – it’s impossible to ignore this New World Order of commerce. However, it’s far too premature to name Amazon the king of commerce.
Currently a 3-horse race between Siri and Google Home—both of which rely on Google—and Alexa, which uses Bing as its default search provider (but recently added Google as a feature). It’s likely these competitors will ultimately provide more utility, above and beyond e-commerce, than Amazon.
Where do people go when they want to buy something? The answer is still “Google” just as often as it is “Amazon,” and the rate of commerce driven by social platforms is only increasing.
Outside of data behemoths such as Google and Facebook, even individual companies are beginning to join forces by sharing their data with Ad Tech partners in an effort to out-scale Amazon. In response, forthcoming API and programmatic scaling of their ad business could briefly tilt the balance in Amazon’s favor – although recent pushes by surprising competitors, such as Kroger, show that purchase-data-fueled programmatic will likely be democratized. Also, it remains to be seen whether enhanced self-serve capabilities for buying Amazon ads, via platforms such as Kenshoo, will drive increased advertiser adoption.
While Amazon continues experimenting with its sputtering Spark platform, the vast majority of consumers still turn to the social channels they love for inspiration and feedback: Instagram, Facebook, Pinterest and even Snapchat.
By adding Jet.com, rapid delivery and a Google Home partnership, Walmart is making a splash online while maintaining its brick and mortar stronghold. And their sales are at an all-time high, as a result.
Through our media planning, buying and analytics efforts for dozens of large brands, most notably in the retail and CPG verticals, Edelman Digital’s Performance Marketing team has discovered an alarming commonality:
3x more effective
It’s mission critical that advertisers place their dollars where current and future growth is most impactful, rather than make arbitrary allocations. As AdAge and The Wall Street Journal recently noted, Publicis, WPP and Omnicom plan to increase investment in Amazon by “between 40 and 100 percent in 2018,” ostensibly because of Amazon’s purchase behavior-driven targeting (though it’s equally likely they’re doing so to finally exert pressure on Google and Facebook). Which begs the question, is this sweeping change good for brands or just the holding companies that represent them? Moreover, if this shift is happening and competition outside of Amazon declines as a result, could now be the ideal time to invest even more with Google and Facebook?
- Refine then redefine the audience
Move beyond personas to zero in on your constantly evolving target audience. Focus on intent signals at a 1×1 level, but remain cognizant of scale. And be sure to track consumption patterns, adapting your targeting in real time for maximum impact.
- Create seamless brand and product experiences
Devising the best possible end-user experience is a must. Design fast and frictionless navigation across owned channels, optimize for mobile, voice and image, leverage data for personalization and offer meaningful member benefits to keep customers moving through the purchase funnel (and coming back for more).
- Maximize the value of pull
Draw customers to your brand authentically by focusing on a channel mix featuring search, social and influencer. For search, focus on audiences and not keywords; for social, mix deeper paid segmentation with influencer and UGC content to ensure pinpoint resonance. Most importantly, always test new search and social offerings and never lose sight of organic search optimization.
- Use data. No, really…use it for everything
Marketers now have access to such a wealth of data that top-down strategies driven by traditional agencies have long since given way to bottom-up, real-time methodologies. Empower search patterns, social trends and purchase data to guide your overarching creative and messaging strategies. First-party data is king, but also tapping into environmental, social, co-opted and competitive factors give you a major advantage.
- Focus on the real KPIs
Most brands still aren’t placing enough emphasis on results. Engagement, video views and click-thrus are nice directional metrics, but everything must ladder up to sales. Even more importantly, don’t lose the forest for the trees: track Lifetime Value to best score your marketing investments, messaging strategies and product offerings.
- Establish proper attribution
Knowing what drove a customer to purchase is a critical insight for a successful marketing program. Consider prioritizing multi-touch attribution over media mix modeling and strive to create custom models bespoke to your business, evolving them every quarter if possible.
- If additive, expand to Amazon
Take advantage of any/all incremental value that can be gained via Amazon, either from a distribution standpoint or simply to reach a supplementary audience. Consider potential risks associated with deteriorating brand equity, but don’t turn a blind eye towards the potential sales lift associated with leveraging AAP, AMS and/or AMG, depending on whether or not you’re selling direct on the Amazon marketplace.
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