eTail Advisors’ Post

The example of how to boost a retailer's p&l with highly profitable service revenues: #Amazon sells more retail ads than Google. In the last four quarters, Amazon sold $51 billion worth of ads - four times more than five years ago (more than twice as much as Google's ad business). #transformation #retailmedia

If you advertise on Amazon, here are two numbers from Amazon's earnings release today that should get your heart rate going: 27% and 9% 27% is the year-over-year growth in Amazon's Q4 advertising revenue. 9% is the year-over-year growth in Amazon's Q4 online store sales. How should we interpret Amazon's advertising growth outpacing online store sales growth by a measure of 3 to 1? Well, online store sales are a good proxy for online store traffic. There's actually plenty of reason to believe that Amazon is learning to be more efficient at selling, so sales growth is likely outpacing online store traffic growth...but we can ignore that for now and take 9% as a "high" proxy for traffic growth. So, how does the growth of advertising revenue greatly outpace traffic? There are basically two ways: 1) Create more advertising real estate (supply) 2) Increased advertiser demand (in the form of higher CPCs and CPMs) It's fair to say that Amazon has increased supply through streaming offerings like Thursday Night Football and hit Amazon MGM Studios shows, but these don't account for an additional +$3B in ad revenue. Meaning, we are seeing the squeeze as Amazon adds more sponsored placements to search results and product pages and advertisers compete for these placements at unprecedented bids. Yet with the changes to Meta ads, Amazon is still one of the best places for consumer-product brands to advertise. And targeting keeps getting better with rapid changes in AMC data and sponsored ad reports. So, the bottom line is...you'd better have a robust strategy and nimble execution for your Amazon advertising... ...'cause it ain't getting any easier. #amazon #earningsreport #advertising #ecommerce

Who saw this coming? 😱 Amazon has officially dethroned Google as the retail ad king! According to Google's own testimony, Amazon's retail ad revenue now surpasses theirs. 🤯 Amazon is now the third largest digital advertising platform, trailing only Google and Meta (Facebook). While Google’s $251 billion advertising business is five times larger than Amazon’s, it spans various industries beyond retail. Amazon, however, focuses almost exclusively on retail advertisers, making it the largest retail advertising network. Over the past four quarters, Amazon sold $51 billion worth of ads — an astonishing fourfold increase from five years ago, outpacing even Google’s ad business growth 📈 This shift means that Amazon is capturing a larger share of the shopper's journey, with ads appearing closer to the point of purchase. And with Amazon accounting for at least 40% of U.S. e-commerce, brands are now spending more on Amazon ads to reach shoppers than on driving traffic to their websites 💰 For brands, this transition has profound implications. Are you ready to adapt your advertising strategy to this new reality? 🤔 At HatchEcom, our team of Amazon experts is here to help you navigate this evolving landscape. With our proven strategies, we can optimize your brand's presence on Amazon, ensuring you stay ahead of the curve and maximize your ad spend. Let us guide you through these changes and turn them into growth opportunities for your brand! 🚀 #amazon #google #retail #advertising #ecommerce #digitalmarketing #marketing #business #shopperjourney #retailindustry #industrynews #news #marketingtrends

🚀 #Amazon's ascent in the digital advertising space is undeniable. According to recent testimony in the U.S. Justice Department's case against Google, Amazon's #retail #advertising #revenues have now #surpassed #Google's. 🔎 This highlights a significant shift in the industry, where Amazon's ad business has #grown fourfold in just five years, #transitioning from a sales channel to a dominant pay-to-play retail platform. While Google and Meta still lead in overall digital advertising, Amazon’s influence in retail advertising is becoming increasingly formidable. 💼 As Amazon continues to #expand, it’s clear that the platform is not just a marketplace but a #powerful #advertising #network that leverages shopper data to target ads both on and off its site. This rapid growth underscores Amazon's evolving role in the digital ecosystem, signaling a #future where brands must navigate a complex landscape of advertising channels to reach their audiences effectively. 💹 We've long recognized the #power and #effectiveness of campaigns within Amazon's advertising network. If you're #interested in understanding how to leverage this platform to #drive your brand's #success, don't hesitate to contact us. We're here to #help you navigate and capitalize on the #opportunities Amazon offers. https://lnkd.in/dwcTr9Hi #AmazonExperts #AmazonAgency #PrimeVideo #Twitch #AmazonTV #AmazonEcosystem #WeAreAmazing #AdvertisingStrategy #RetailMedia #OpportunityAmazon #CPM #DSP #SponsoredAds #SellAmazon #Branding #Awareness

🚀 #Amazon's ascent in the digital advertising space is undeniable. According to recent testimony in the U.S. Justice Department's case against Google, Amazon's #retail #advertising #revenues have now #surpassed #Google's. 🔎 This highlights a significant shift in the industry, where Amazon's ad business has #grown fourfold in just five years, #transitioning from a sales channel to a dominant pay-to-play retail platform. While Google and Meta still lead in overall digital advertising, Amazon’s influence in retail advertising is becoming increasingly formidable. 💼 As Amazon continues to #expand, it’s clear that the platform is not just a marketplace but a #powerful #advertising #network that leverages shopper data to target ads both on and off its site. This rapid growth underscores Amazon's evolving role in the digital ecosystem, signaling a #future where brands must navigate a complex landscape of advertising channels to reach their audiences effectively. 💹 We've long recognized the #power and #effectiveness of campaigns within Amazon's advertising network. If you're #interested in understanding how to leverage this platform to #drive your brand's #success, don't hesitate to contact us. We're here to #help you navigate and capitalize on the #opportunities Amazon offers. https://lnkd.in/dwcTr9Hi #AmazonExperts #AmazonAgency #PrimeVideo #Twitch #AmazonTV #AmazonEcosystem #WeAreAmazing #AdvertisingStrategy #RetailMedia #OpportunityAmazon #CPM #DSP #SponsoredAds #SellAmazon #Branding #Awareness

🚀 #Amazon's ascent in the digital advertising space is undeniable. According to recent testimony in the U.S. Justice Department's case against Google, Amazon's #retail #advertising #revenues have now #surpassed #Google's. 🔎 This highlights a significant shift in the industry, where Amazon's ad business has #grown fourfold in just five years, #transitioning from a sales channel to a dominant pay-to-play retail platform. While Google and Meta still lead in overall digital advertising, Amazon’s influence in retail advertising is becoming increasingly formidable. 💼 As Amazon continues to #expand, it’s clear that the platform is not just a marketplace but a #powerful #advertising #network that leverages shopper data to target ads both on and off its site. This rapid growth underscores Amazon's evolving role in the digital ecosystem, signaling a #future where brands must navigate a complex landscape of advertising channels to reach their audiences effectively. 💹 We've long recognized the #power and #effectiveness of campaigns within Amazon's advertising network. If you're #interested in understanding how to leverage this platform to #drive your brand's #success, don't hesitate to contact us. We're here to #help you navigate and capitalize on the #opportunities Amazon offers. https://lnkd.in/dwcTr9Hi #AmazonExperts #AmazonAgency #PrimeVideo #Twitch #AmazonTV #AmazonEcosystem #WeAreAmazing #AdvertisingStrategy #RetailMedia #OpportunityAmazon #CPM #DSP #SponsoredAds #SellAmazon #Branding #Awareness

#Amazon #PrimeDay #AmazonAds Because so much of Amazon's revenue is from platform advertising (and as it has become more important to their business over time) one could infer that 1) Amazon has grown their seller and customer audiences enough. The next stage of their revenue/profitability growth will not come from expanding distribution or sales markets - instead from advertising and data (selling ultra high margin services on existing fixed cost infrastructure) 2) With end customer satisfaction as absolute priority, merchant complaints about various warehousing problems, copyright infringement, customer refund abuse (refund shopping), review farming, etc. can be ignored but the false discount phenomenon that hurts customers and benefits sellers needs to be addressed 3) Amazon not fixing the various problems discussed in their seller community is actually good for business. Resellers of knockoff products, low quality private label products, China sellers, etc. have just as much (or more) incentive to engage in advertising spend as "name brand" or "legitimate sellers." Name brand sellers must also advertise to compete with merchants that directly knock off their products and sell side by side on the same sales platform. Because of other issues like review farming and Amazon Basics competition, over time merchants will become increasingly reliant on advertising to gain 1st page above the fold srp visibility 4) Amazon probably makes more money/more profit on Prime Day advertising than the various seller fees https://lnkd.in/d_pSBmb2 https://lnkd.in/dVi77n_T. https://lnkd.in/dj6T6Euw https://lnkd.in/d7sgSq-z

Another positive news for #retailmedia ➡️ Amazon's retail advertising revenues have surpassed Google's 😎 As of 2023, Amazon's retail advertising revenues have surpassed Google's, according to Google’s testimony in a U.S. Justice Department case. Although Google’s overall advertising business is much larger and spans various industries, Amazon’s focused dominance in retail advertising has grown rapidly. Over the past four quarters, Amazon's ad sales reached $51 billion, reflecting a significant shift in its role from a sales channel to a pay-to-play platform. While Google and Meta lead in driving website traffic, Amazon excels at capturing shopper intent, with its ad network leveraging shopper data to target ads both on and off Amazon. More details here 👉 https://lnkd.in/eUKzsD9N Interested in retail media in CEE region? Get in touch ➡️ Heureka Group #heureka #heurekagroup #online #ecommerce #advertising

Selling on Amazon today v. 10 years ago. The fundamentals haven't changed, but ads are in a different stratosphere. ⏪ Looking back to when I first joined the Amazon world in 2015, content was king. Brands invested heavily into great imagery, lifestyle visuals, and descriptions highlighting key features and value props beyond just specs. It was also an exciting inflection point, as Amazon's advertising solutions for sponsored ads were just launching. This opened up a new avenue for brands to drive traffic to those content-rich listings through keyword campaigns and banners. ⏩ Fast forward nearly a decade, and the landscape has evolved drastically. You simply cannot sell on Amazon today without an advertising strategy and budget. While strong product content remains important, you need an advertising strategy to increase visibility and drive shoppers to your listings, especially with fierce competition. Over 50% of online shoppers now use Amazon to discover products. Amazon has become a pay-to-play platform. Brands must double down on this paid channel that the majority of consumers use as their first product search touchpoint. It's been quite the journey watching Amazon's ad solutions mature, but it's just the beginning. With new technology that's emerging, we're at another inflection point in the story of winning on Amazon where the name of the game is being efficient and effective with your ad dollars. #AmazonAI #AmazonSellers #AmazonAds

What happens when you completely shut down Amazon ads? We ran this experiment for an emerging brand in Q1. The result was a fairly expected but valuable case study. The chart below shows the effects on total sales before and after shutting off ad spend. Interestingly, while sales decreased by about 25%, their overall profitability remained flat. (Same $100K in margin dollars) Advertising spend before the shutdown was about $35K/mo. Total sales lost = $58K The real lesson was not that Amazon advertising produced a true 1.65 ROAS for this brand. But INSTEAD that the sales drop-off varied wildly across the product catalog. Sales stayed steady during the pullback for the hero SKU, but the $58k decline was primarily driven by declines in the rest of the assortment, which had very little organic visibility. This is a huge reminder for brands to: 1. Avoid looking at ad spend vs. ad sales and instead focus on TACOS 2. Differentially set TACOS objectives based on product maturity 3. Differentially set CPC bids based on organic visibility 4. Without hold advertising periodically to baseline true ROI (SQP data is quite helpful here, too) When was the last time you ran this experiment? What did you find?