With so much online chatter surrounding the recently introduced advertising options on Amazon in Australia, now is a great time to look at including the E-Commerce giant within your ongoing digital marketing strategy.
Our Growing Digital Lifestyle
There is no question that our lives are becoming increasingly streamlined towards a digitally-orientated online lifestyle. Recent data has revealed an explosion in global digital usage over the last year, with 4.39 billion internet users worldwide during 2019 – an increase of 9% in the last year.
To break this down into a more digestible statistic, internet users are growing by an average of 1 million new users every single day!
Search engines are now responsible for 93% of all website traffic, with 90% of searchers undecided on which brand to choose prior to researching their next purchase. With the growing pool of new consumers joining the online marketplace, it’s becoming increasingly important for businesses to keep up.
Australians Love Online Shopping
8 in every 10 Australians regularly shop online so it’s no surprise that Australia is listed as the 10th largest E-Commerce market worldwide in terms of revenue. As of February 2019, it has been reported that 9% of Australia’s total retail sales equate from online shopping, with a further 15% growth in revenue predicted for online Australian businesses within the year.
Introducing Amazon in Australia
Whilst Google and Facebook have traditionally dominated the advertising space within their digital duopoly, the introduction of advertising on Amazon in Australia is now set to shake up the competition for the better. Launched in Australia during April 2019, Amazon Advertising now offers a host of new advertising opportunities for businesses selling tangible consumer products on the popular shopping marketplace.
This is a game-changer for Australian business, which is why we’ve put together the following list to outline 5 Reasons Your Business Should Be Advertising On Amazon In Australia.
Let’s get started!
1. Amazon Is Specifically A Buyer’s Marketplace
First and foremost, Amazon is an online shopping forum designed specifically to offer consumers a central resource for browsing, researching and purchasing tangible products. This is a major point of difference compared to rival platforms like Google and Facebook which both have the users and traffic, but are not as aligned to purchase intent – a major factor that dictates the who, what and when in terms of the online sales funnel.
Put simply, Amazon is a closed buyer’s marketplace, meaning advertisers are able to directly correlate, attribute and measure the effectiveness of their campaign resources to direct sales.
What About Google and Facebook?
When social media users are browsing Facebook, they are likely to be there to mainly engage with friends, networks and shared interests, with online purchases being symptomatic of spending enough time on the platform. Google on the other hand is a lot more targeted towards online purchases, with users commonly using the search engine giant to research brands and reviews before reaching a final purchase decision. However, neither of these platforms are dedicated online shopping forums like that of Amazon.
There is no such one-stop ecommerce-shop in Australia that has such a direct relationship with people; it’s a space Amazon can neatly fill.
– Removify Co-Founder, Nick Bell
What About the eBay Marketplace?
Australian consumers are comfortable with eBay’s trusted platform and have embraced the auction-based model since its beginnings, with the platform also allowing fixed price and classified ad formats. Whilst eBay still commands a majority of Australia’s E-Commerce market with 7.8 million users per month, Amazon in Australia is structured quite differently.
Choosing between the two platforms for product-based companies really depends on the type of products you are selling. This includes how you wish to be paid, the price points and formats you wish to use, as well as a series of other factors. Whilst it will take some work to knock eBay off its platform as Australia’s most trusted E-Commerce supplier, Amazon has this title firmly within its sites.
Given the recent investment into growing the Amazon in Australia Marketplace, it is likely that this market share will begin to look different once advertisers realise its true potential. This has already begun taking place overseas – more on this later.
Amazon Consumers Have A Stronger Purchase Intent
Amazon is able to offer more value to advertisers based on its use of intricate customer purchase data behind the scenes. For example, advertisers will no longer be required to combine data sets in order to measure their return on investment, with Amazon Advertising selling directly to customers supported by a mountain of behavioural data on buying. Nick Bell (Removify’s CEO) went on to further comment on the significance of this advantage by adding,
This has the potential to take serious money away from local media giants, as it enables local brands to target customers in the middle of the funnel, in a setting where they’re already shopping for similar products, or at the top of the funnel during an initial search.
A Refined E-Commerce Process Means More Conversions
Amazon has spent many years streamlining its payment process to make things easy for consumers to complete transactions in the most efficient way possible. This sits well with companies who are looking to invest onto the platform, as consumers who come across products are more likely to convert thanks to a simplified E-Commerce experience.
With features such as one-click buying, 2-day shipping (for Prime customers only), registered consumers also have the luxury of having their account and card details stored to facilitate faster check outs. Amazon is also very accomplished in keeping customers in the loop for delivery updates, so there is no question that the platform is very much tailored to creating a simplistic and effortless shopping experience for customers.
Why Is User Experience Important To Advertisers?
When a consumer can browse, research, compare and purchase a product within minutes from any device connected to the Internet, a smooth user experience becomes a paramount part of the sales journey.
Advertising Association President Keith Weed recently revealed that 69% of consumers no longer trust advertising due to the sheer number of advertising messages we regularly see – predicted now to be at 10,000 per consumer every single day!
Getting consumers to find a product and click an ad is a significant challenge for advertisers in a crowded marketplace.
Then follows the challenge of an actual conversion leading to a purchase.
Whilst Google will always be able to rival Amazon in terms of helping consumers find products, this process breaks down when Google relies on its external websites being user-friendly and optimised for conversions. Amazon on the other hand offers consistency and convenience through its Amazon Marketplace, where consumers know the process and don’t need to reach for their wallet when they find that pair of shoes they’ve been wanting. Another significant advantage for advertisers.
2. Shopping Insights & Buyer Behaviour
One of the most powerful tools for online marketers using Amazon in Australia is the platform’s ability to provide shopping insights, or in other words, intricate data on buyer behaviour.
Whilst Amazon was one of the earliest pioneers in remarketing (advertisements which would follow you around the Internet based on your previous browsing history), it’s no wonder the platform has further refined it’s tracking ability with consumer sessions on the platform. It is this very data which marketers will now have access to in order to refine their digital marketing strategy for optimum results.
Google has search data, and Facebook knows interest levels, but Amazon has real power because it knows what people are buying and how they’re doing it.
– Shareen Pathak (Digiday Author)
Tailored Metrics To Drive ROI
Amazon’s promise of highly targeted advertising based on shopping insights might just be the single biggest advantage of the platform for marketers.
In its own words, Amazon describes this service as giving marketers the ability to monitor shopping activity around your products before, during and after your campaign to see the correlation to advertising.
This is simply because Amazon consumers are further down the sales funnel when engaging throughout their buyer journey, giving Amazon access to more first-party customer purchase data compared to Google or Facebook. The highly competitive world of online business demands the highest return on investment (ROI), so understanding how likely a customer is to convert can be perceived as a magical crystal ball for budget efficiency. Fortunately for advertisers, Amazon’s tech will enable your business to follow this mantra.
Our jobs as marketers are to understand how the customer wants to buy and help them to do so.
– Bryan Eisenberg (Digital Marketing Pioneer)
3. Amazon’s Growing Market Share
It is expected that Amazon will become one of the biggest digital media giants in Australia (if not “the” biggest) due to its established presence of 300 million users throughout the global marketplace.
Whilst advertising on Amazon in Australia is still in its early stages, overseas markets have already recognised the value of Amazon and already begun heavily investing their digital media budgets into Amazon search. When looking at the United States market (which has 80 million Amazon users), Amazon is recognised as the third-largest digital ad vendor within the market (behind Google and Facebook) creating huge potential for online revenue streams.
It should also be noted that Amazon still only accounted for 4.1% of domestic digital ad spending, compared to 57.7% attributed from a combination of both Facebook and Google – so there is still some way to go yet for Amazon.
Amazon Is Challenging The Google/Facebook Duopoly
Google and Facebook still heavily dominate digital media spend across the online marketplace in a duopoly that still controls a majority of search traffic. When looking at Google alone, it’s extensive market share in the US market sits at around 85%, whilst commanding a staggering 91% of market share in the European search market.
However, there is a growing trend in companies allocating less funds to these two popular platforms to make room for more investment into Amazon Advertising.
Once such example includes global media giants, Omnicom Group, who decreased their Google search ad spend in 2018 to invest back into Amazon Advertising, which equated to 20-30% of their overall search spend last year. Looking at the United Kingdom market, WPP PLC (the world’s largest advertising agency) doubled its clients’ expenditure within the Amazon search ads to $300 million during 2018.
A global shift of businesses allocating more Amazon dollars has already begun.
US Consumers Prefer Amazon For Product Searches
It’s not just advertisers who are pouring their resources into Amazon – users are now changing the way they browse for products, with Google coming off second best for consumers specifically conducting product research. Taking a look at current market share, as of May 2018, 46% of all product searches in the US market begin their searches on Amazon – compared with Google’s 34.6%. Further data has revealed that 28% of this Google traffic actually results in a purchase via Amazon.
Will Amazon in Australia Follow Suit?
Whilst there is no guarantee the Australian market will follow the same trajectory; marketing experts are already beginning to plan for the shift to remain ahead of the curve. Brian Halligan, founder & CEO of popular marketing platform HubSpot, has built his business based on staying ahead of the curve. His advice for business success in 2019 revolves around “keeping up with the Jonses” and changing trends of how consumers shop online.
He believes whilst these online behaviours change, mould and develop, it will be essential for businesses to remain dynamic and adaptive to avoid extinction. Whilst the Amazon phenomenon has firmly established itself within the US market, marketers are preparing for a flow on effect travelling at full speed towards the Australian market.
4. Tailored Ad Formats
Recent news at the Google Marketing Live summit introduced 6 new Google ad formats to rival Amazon’s growing ad platform alongside a new look for Google Search on mobiles. This highlights the growing competition for ad spend between the two media giants. It is very clear that both platforms are looking at ways to tailor their services to advertisers to secure market share – and Amazon has invested heavily within its Australian operations.
Businesses selling tangible products on Amazon in Australia have access to a range of ad formats thanks to the highly tailored marketplace. Whilst these formats differ between the level of advertiser status on the platform (broken down into either First-Party or Third-Party Sellers), Amazon is going the extra mile to ensure advertisers have a variety of advertising options.
As well as a selection of ad formats including product ads, headline search ads and product display ads, Amazon is also looking to introduce video ads as another form of acquiring new customers. Advertisers will have more control on the timing of ads whilst ensuring they are displayed to the right customers, all thanks to advanced matching options and keyword targeting throughout the platform. Amazon also has an inbuilt comparison-shopping feature that allows advertisers to monitor product performance based on competitors – again another feature designed for maximum ROI.
First And Third-Party Sellers
Advertisers who want to sell their products in bulk directly to Amazon would be classified as First party sellers (1P). On this model, Amazon would own your products and then sell them through the platform without you needing to engage directly with customers. Whilst this may work well for some businesses who deal with large orders or bulk supplies, other advertisers may wish to opt for a Third-Party Vendor account, where they could sell products directly to consumers.
Self-Serve Ads and Premium Ads
Amazon haven’t necessarily reinvented the wheel when it comes to advertising – a welcomed approach by advertisers and consumers who are already comfortable with the ways of Google or Microsoft Advertising. Amazon ads can be broken down into Self-Serve Ads, which are aligned with the way Google Search Ads work with displaying within SERPs (search engine results pages), whereas Premium Ads work like display ads appearing within the Amazon platform as well as partnering websites – just like the Google Display Network).
Sponsored Product Ads
Located in the top, right hand side and bottom of SERPs are Sponsored Product Ads, which are like promoted post ads within organic results, very much similar to Google Ads. Amazon has used sponsored ads on its platform since 2012 so advertisers will be most familiar with this style of advert, operating as a PPC (pay-per-click model) and available to both first and third-party sellers.
Headline Search Ads
Situated in the top banner carousel in search results, advertisers will have the opportunity to showcase a list of 3 top products above sponsored results. These ads will enable retailers to use three ASINs (Amazon Standard Identification Numbers) at once, highlighting best-selling products for sale all within the top fold of the page. Available only to first party Amazon Vendors (1P), these ads are triggered by keywords which can be implemented with help through Amazon’s keyword traffic indicator (similar to that of Google Keyword Planner).
Product Display Ads
Located on product detail pages, Product Display Ads (or Amazon Product Ads) will sit underneath the “buy” box and “other sellers”. Retailers will have the option to set up these ads based on either competitive or complementary products based on keywords they input into their campaign. This means your ads can either appear as complementary products alongside your existing inventory, or situated on competitor websites where relevant. This opens up the possibility of more sales and conversions resulting from consumers who spend time browsing the site to find their perfect product or price point.
5. It’s Easy To Get Started on Amazon in Australia
Advertisers will enjoy an easy process when getting set up on the popular E-Commerce platform. A quick visit to the Amazon Marketplace in Australia showcases a simple form to complete with basic information such as your name, company name, business email, phone number and country. You will also need to specify a product category within the platform’s menu, with your company website being an optional cell within the contact form. Once your details have been entered, a representative from Amazon Australia will be in touch to walk you through registration. Nice and easy!
Low Barriers To Entry
Amazon have been smart to ensure the registration process is easy and manageable for companies of all sizes to ensure a low barrier to entry. The optional website cell makes a clear statement that Amazon will manage your sales without any reliance on your company website – particularly ideal for smaller retailers who haven’t invested heavily into their website’s user experience.
In fact, you don’t really require any specific experience, much capital or a sales-orientated skillset to make the most of Amazon in Australia. When comparing this to the traditional model of starting a business, Amazon is by far the easier option for start-ups looking to enter a market of 300 million global users, in a growing online marketplace within Australia.
Advertiser have two options for payment, with the first being to go onto the professional plan which costs just $49.99 per month on a subscription-based model. This enables sellers to sell an unlimited number of products. If your business has less inventory or generates a lower regularity of sales, you can choose an alternative model where your business will pay $0.99 per item sold. Advertisers will also be required to pay a commission fee on top of any sales, sitting between 6 and 15% and being dependant on the type of product you’re selling.
Fulfilment By Amazon (FBA)
Shipping orders to customers can often be a challenge for companies handling large orders, or working with regular transactions, which is why the Fulfilment by Amazon (or FBA) feature has become a welcomed addition to advertisers. This allows products to be shipped to Amazon’s warehouse for processing, with all orders being managed by Amazon centrally, removing delivery challenges, whilst also reducing costs to advertisers.
All of these benefits combine to create a highly scalable E-commerce model for companies of all shapes and sizes.
Given the scrutiny of ad rivals Google and Facebook, who are both under increasing pressure from the Australian Competition and Consumer Commission (ACCC), it is expected that these platforms will suffer from greater regulation in the near future. Advertisers want to feel secure when handling products, with Amazon’s promise of an easy, secure and protected E-Commerce journey becoming yet again another reason to invest into this space.
It’s time to embrace Amazon in Australia!
The introduction of Amazon in Australia is a welcomed addition within the competitive online market place and brings with it new options for advertisers. Whilst the trusted platform is designed to support shoppers at the end of their sales journey, Amazon is very much designed to support advertisers in increasing the potential for conversions and strong ROI. Music to the ears of product-based companies who are investing in digital marketing.
Now is a great time to jump into the exciting new world of Amazon Advertising to snap up the opportunity of reaching highly targeted shoppers who are likely to convert. If your business needs assistance with getting set up or fine tuning your Amazon Advertising, we welcome you to contact us to start the conversation.