Focusing your e-commerce efforts only on Amazon might be tempting, but it’s unlikely to be the best solution, says Chris Carter, CEO of Amazon specialist e-commerce agency Melody.
Thrasio, which aggregates digital-first brands selling on Amazon, recently announced plans to grow even further in Europe. Meanwhile e-commerce business Heroes, in a similar space, recently raised $65m in funding.
Quite rightly, these investments show that Amazon specialist e-commerce businesses are making waves when the time comes to scale up. A lot of them are looking to do even more on the platform to attract the attention of one of these holding companies.
However, directing your marketing efforts solely on Amazon, even if it’s a huge channel to your customers, isn’t a panacea for all e-commerce ills. Even the most Amazon-focused brand still needs to look outside the walled garden if it wants to succeed.
What drives customers?
Even Amazon isn’t big enough to operate in isolation. Advertising outside it drives awareness, which in turn drives in-platform search.
If you look at Google’s current interpretation of the purchase journey, not to mention the various iterations that have gone before, a shopper’s experience of (and exposure to) brands and categories can exist long before they actively start a purchase journey.
Amazon is no different. Shoppers bring that brand-exposure and experience with them to the platform.
If you click on any of the categories on the navigation pane to the left of Amazon search results, this will bring up the best sellers first. In most instances they possess high brand health, spontaneous awareness and/or titles that define a category itself. That comes from building external awareness.
Brands cannot just rely on consumers who are already ‘in category’ on Amazon running specific product searches. This is especially true if that brand is relatively unknown or niche, and even more so if that category is dominated by well-known players.
Advertising and search are inextricably interlinked
Last year, Les Binet and the IPA published results from in-depth research into online search and its relationship with advertising. Share of Voice (ie: advertising) has two effects on what they term Share of Search. There is a major short-term spike that dies away quickly, plus a smaller, longer-term effect that decays more slowly. The long-term effects also accumulate over time.
Sustained advertising drives the growth of Share of Search, with 60 percent of searches coming from the long-term effects and 40 percent from short-term effects. And it is certainly not all reliant on traditional mass-reach media such as TV.
Furthermore, branded search (rather than just searching for ‘table lamps’) is a big factor in the long-term efficiency of your brand’s Amazon search performance. A more salient brand will deliver greater Amazon search volume, which increases sales from organic search and improves Sponsored Ads efficiency.
Plus, the defence of a brand is cheaper than relying only on conquesting (using your competitors’ brand or product names as some of your own keywords) or competing on the generic search terms that everyone is fighting over.
Drive traffic to Amazon
Along with building awareness, external media can be used to drive traffic directly to your Amazon Product Detail Pages (PDPs) or Stores.
This can be done in a number of different ways, and brands can measure the click-through rates through Amazon Attribution. First, they can use the myriad of targeting options offered by the large media players (such as Google, Facebook, Instagram and so on) to serve content up to large volumes of targeted audiences at reasonable costs, with a click-through to specific Amazon product pages.
Second, they can work to get products featured on related industry sites and blogs, again with a click-through to their product page.
Third, if they already have a large D2C customer base, they can retarget lapsed customers with an incentive to purchase on Amazon.
Finally, Amazon’s own Demand Side Platform (DSP) programmatically reaches audiences across the web on both Amazon sites and apps, as well as through third party exchanges. That enables advertisers to reach new and existing audiences both on and off Amazon, driving them directly to specific product pages.
Get the mix right
Ultimately, the right mix will depend upon the dynamics of the category. However, it is clear that long-term advertising away from Amazon actually pays dividends on Amazon performance.
And finally, don’t forget that whilst Amazon is dominant in the US, UK and Germany, many other global markets use other platforms and channels. Therefore, it’s important that advertising efforts drive traffic to the right place. It’s no good focusing on Amazon if most of your customers are searching on Alibaba or Flipkart.
By Chris Carter