It’s no secret that the number of advertising platforms and retailer media networks is growing at an unprecedented rate. It’s also no secret that the two major players in digital advertising — Google and Facebook — have recently been challenged by a third contender: Amazon. As Amazon Advertising has grown, so has the popularity of its demand-side platform, not only for Amazon vendors but external service providers, too.

According to its own financial records, Amazon’s ad revenue grew 39% in Q2 of 2019 – generating an astounding $3 billion in the quarter for the second time ever, following on from the same achievement in Q4 last year. Clearly, more and more advertisers are taking their budgets to Amazon and, as we approach the critical holiday shopping season, we expect that this will accelerate even further in the next few weeks.

While Amazon DSP is fast becoming a preferred option, particularly for Amazon vendors who can take advantage of a lower rate for being an existing platform seller, it’s vital to remember that there is no single player in the current ad-tech industry that is able to optimise ads, plan campaigns, and create marketing strategies across all channels, across all platforms, and across all mediums. This, of course, results in a need for an omnichannel approach that now spans not just two platforms, but three. So just how should businesses start to prepare for the huge predicted growth of the Amazon DSP?

Understand Value

 

At this time, the most pressing issue is for businesses to fully understand the unique value of each system. One of the primary reasons why Amazon has been so successful to date is due to the comprehensive data sets that it holds over its users. Amazon has access to both purchase history and browsing history, providing valuable insight into who buys what, and when; key data for targeting the right people, at the right time.

However, there’s value in other systems, too, which is working to keep them up there near the top of the leader board even as Amazon begins to dominate. Facebook, for example, may know much more about interests, social connections, and potential future purchases which are equally as valuable to vendors. Google, on the other hand, understands why people perform the online actions that they do. It looks at context.

To prepare for the ‘tripoly’, customer behaviour and preferences must be taken into account. Who is the target audience? Where are these potential customers sharing their information, and with whom? What platforms are they engaging with? Where are they when they are in the buying mindset? Customer behaviour is key to navigating a future where three separate and distinct platforms share the most prestigious position.

Budgeting

 

Perhaps one of the biggest factors that Amazon will disrupt is budgeting. With budgets allocated between Google and Facebook, the introduction of a third platform disrupts the balance. The rise of Amazon DSP will undoubtedly impact how marketers make budgeting decisions. Investing in Amazon Advertising should be considered alongside other promotional investments, with a long term view to the future best for allocation.

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George
George
George is the Founder of Clear Ads Ltd. Clear Ads Limited was first set up in January 2011 with the soul purpose of helping small and medium sized companies advertise through Google Adwords. Over the last few years through word of mouth, our account managers have managed to help over 200 different companies gain better exposure to their website through Google Adwords.

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