New Survey Shows Amazon Gaining Momentum as Digital Advertising Platform

Nanigans, a leader in performance advertising software, announced results from its latest survey conducted by Advertiser Perceptions.

Based on responses from 100 digital advertising decision-makers at retail companies generating at least $50 million in online sales annually, the survey reveals that Amazon is rapidly gaining momentum in the digital advertising race.

Retail marketers estimate Amazon gets 14 percent of their digital ad spend, placing it third behind the Duopoly of Google (21 percent) and Facebook/Instagram (19 percent).

Additionally, half of those surveyed said they are planning to spend more with Amazon over the next 12 months — with an average planned increase of 25 percent.

While some marketers are shifting ad dollars from other channels like Google (29 percent) and Facebook/Instagram (34 percent), 41 percent are adding incremental budget to support their increased Amazon spend.

“Amazon has a unique advantage as an advertiser, an ad network and a marketplace. Amazon had a marketplace that existed long before its ad business, so when the company decided to compete with the Duopoly, the supply and demand already existed — so Amazon was able to gain momentum quickly. Amazon also had very accurate and robust audience data from its users, including purchases and search history data, which enabled the platform to compete with others from day one.”

Ryan Kelly, vice president of marketing at Nanigans

Amazon Experiencing Growth

Amazon is experiencing this growth for good reason: marketers say the platform meets their goals.

The top three reasons respondents advertise on Amazon are: strong performance and return on investment (ROI), size of the audience, and their target audience is active on Amazon.

Of those serving ads on Amazon, an average of 30 percent of online sales come through that channel.

Outperforms Google and Facebook on Key Indicators

Marketers also say it outperforms both Google and Facebook/Instagram on key performance indicators, including:

  • Return on ad spend (ROAS) – 39 percent of respondents saw higher ROAS than Google, and 54 percent saw improvement over Facebook/Instagram
  • Cost per mille (CPM) – 32 percent of marketers reported lower CPMs than Google, and 38 percent felt the same about Facebook/Instagram

“It’s uncertain if the ROAS and cost benefits retail marketers are seeing with Amazon over the Duopoly will maintain as Amazon matures as an ad network. There’s very likely a real first mover advantage that brands are experiencing with Amazon. As we begin to move past the early adopters, and advertising on Amazon starts to get adopted by the masses like that of the Duopoly, the channel could become less effective for retailers as more competition will drive up prices thus lowering ROI.”

Ryan Kelly, vice president of marketing at Nanigans

Despite Amazon’s proven results, marketers have expressed concerns about the platform.

Forty percent are worried about Amazon having too much of their data and almost a third (31 percent) see Amazon’s retail business as competitive with their own.

A majority of marketers (57 percent) even predict Amazon will eventually misuse consumer data as other large digital players have.

Nearly half (48 percent) expect consumers will become increasingly turned off by the advertising experience with Amazon.

Additional Notable Findings From The Survey Include

  • Just 22 percent of marketers surveyed said having transparency into where their digital advertising spend dollars are going is an important factor when allocating that spend — and just 3 percent ranked it as their top factor.
  • After Google, Facebook and Amazon, it’s anyone’s game in terms of where retailers’ digital advertising dollars are allocated. The following lag behind in fourth, fifth, sixth and seventh, respectively: Twitter (11 percent), Microsoft (10 percent), Snapchat (7 percent) and Pinterest (7 percent).
  • Despite the emergence of Amazon as an advertising platform, almost half (47 percent) of senior marketers consider themselves experts at using the tool. The only other tool seeing more “expert” users is Google.
  • Nearly three-quarters (75 percent) of marketers advertising with Amazon would prefer to have the ability for Amazon ads to link back to their own sites, rather than Amazon.com.

READ MORE: Amazon May Become Third Largest Digital Advertising Platform in 2018

Do you use Amazon to advertise your products and business? Please use the comments section below or head over to our Facebook Group for Small Business Sellers and interact with other small business owners.

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