Amazon ads equals a minus for Google, Meta digital marketing reign

For almost a decade now, Google and Meta have loved a duopoly within the digital promoting area in India, with nearly a 90% share in what’s pegged to be a Rs 70,000-crore market at current. Over the final couple of years although, Amazon Ads appears to be quickly consuming into their share of the digital pie, senior media shopping for executives instructed ET.

Advertisers, particularly in classes akin to shopper packaged items in addition to DTC (direct-to-consumer) manufacturers, are shifting as a lot as 15-20% of their promoting finances — beforehand devoted to Google and Meta — in direction of the Seattle-based ecommerce large’s advert tech suite.

In the US, platforms like Apple and TikTok, together with Amazon and Walmart in retail media, have shrunk Google and Meta’s share of digital advert {dollars} to lower than 50% as of final yr. With no TikTok again dwelling and a single-digit share proliferation of Apple merchandise in addition, Amazon Ads emerges because the single-biggest challenger to the duopoly in India.

In 2020, Amazon launched its international ‘demand-side platform’ (DSP) in India. Through Amazon DSP, advertisers should buy programmatic advertisements to achieve new and current audiences on and off Amazon. It combines information factors from all its totally different properties, akin to Prime Video, Fire TV, Kindle, Alexa, Audible, and many others, to offer sharper viewers segmentation.

“You can use it to create customer cohorts based on different spending sizes. Programmatic ads also prove more efficient and cost-effective compared to direct advertising/media-buying,” stated Anil Pandit, senior vice-president at Publicis Media Services.

Today, 5 to 6 of 10 media plans at Publicis Media have some type of Amazon Ads focusing on. “In the last year and a half, our clientele’s spending on Amazon Ads has gone up by 8-10x,” Pandit stated.

Wavemaker, a GroupM firm, now has an unique providing referred to as Amazon Audience Galaxy, a planning stack for viewers segmentation and cross-basket evaluation. “For instance, it can give you data on what consumers bought last month across categories, or who are the people buying health products,” stated Shekhar Banerjee, chief shopper officer and workplace head (west, north and east) at Wavemaker. “Map it out and you can market, say, sugar-free products to them. Refined data reduces noise. That’s a massive advantage and clients are lapping it up.”

With these developments, many business consultants reckon Amazon’s portion of the digital advert pie is prone to develop larger within the subsequent few years. Some homegrown DTC manufacturers within the magnificence and skincare phase are already spending 80% of their digital advert monies on Amazon, these executives added.

ET’s emailed queries to Google and Meta went unanswered. Amazon shared info on background.

How did we get right here?

First, Amazon got here for Google Search. The pandemic altered purchasing habits and, in response to a current Counterpoint Research report, the variety of individuals shopping for each day requirements on-line in India continues to develop. Therefore, “marketers realise that the only rival to Google search today is Amazon because people search on that platform with the intention to buy,” stated Mayank Shah, senior class head of Parle Products.

While Parle Products doesn’t spend on Amazon Ads but, a DTC model it has invested in, referred to as ASAP vitality bars (a part of WIMWI Foods), allocates advert monies in direction of Amazon Ads and has obtained a great response by way of gross sales, stated Shah. “If you’re a DTC consumer brand or selling inventory on Amazon already, it makes sense to spend on Amazon Ads,” he added.

L’Oréal India began itemizing its manufacturers on Amazon round 2016-17 and commenced with show advertisements. “Slowly, we moved on to spending on search ads, since Amazon is a discovery-driven platform. Their offering has evolved significantly over time,” stated Saloni Shah Javeri, chief digital and advertising and marketing officer at L’Oréal India. In 2021, the corporate began exploring Amazon DSP.

“The bulk of advertiser spends on Amazon is on search ads,” stated Gautam Mehra, cofounder and chief govt of ProfitWheel, a buyer data-led advertising and marketing intelligence platform. “90% of ad spend on Amazon is on ‘sponsored’ product ads you see in every category. Folks running these ads are from the e-sales teams. They report to the sales head and not the CMO. So, it’s very retail-led.”

Traditionally, advertisers have used Google and Meta for ‘upper funnel’ advertising and marketing that builds model consciousness. But given the financial headwinds and intense competitors in shopper items classes, an increasing number of advertisers in the present day are specializing in decrease funnel advertising and marketing that’s extra sales-oriented, yielding short-term outcomes.

Consumer packaged items that promote extra on {the marketplace} require promoting options for the decrease funnel, “therefore many of them are cutting budgets from the top funnel and putting them into the mid and lower funnel,” stated Banerjee of Wavemaker. “When their marketing budgets go up, the bulk of the incremental money is going towards lower funnel advertising, too.”

Retail media (like Amazon) is ready to present transactional patterns of customers, aiding in decrease funnel advertising and marketing that drives purchases, stated Pandit of Publicis Media. “It allows marketers to also close the funnel measurement loop to a large extent as they are able to track spending leading to sales, which is still the biggest challenge for them.”

Given the dimensions of their social and messaging platforms like YouTube and WhatsApp, Google and Meta do present an entire host of behavioural consumer information to advertisers. But they lag behind Amazon in offering consumer’s transactional patterns to advertisers. “Google takes you directly to the product site. Meta offers Instagram checkout in the US but that’s not available in India as yet. If a transaction starts happening on their payment gateways, it’ll close the loop on the transaction,” stated Mehra of ProfitWheel.

Going ahead, “the ecommerce ecosystem as a whole could be a big threat to Google and Meta because neither of them has a marketplace equivalent,” stated Banerjee of Wavemaker. “But you see them coming up with strategies to combat this threat. For instance, Facebook is tying up with smaller marketplaces now to strengthen its media buying offering.”

Homegrown ecommerce corporations are additionally constructing a programmatic platform like Amazon DSP to seize their share of the advert {dollars} prone to go in direction of retail media within the subsequent few years.

That stated, not everybody must promote on {the marketplace} both. “So, sectors like realty, auto and BFSI don’t need to spend on Amazon Ads right now,” stated Banerjee.

Further, “Amazon offers great consumer shopping signals but not at the scale that a Facebook, WhatsApp or YouTube can provide because of their much higher active user base,” said a digital marketing professional, requesting anonymity. “It’s also cheaper to target a much larger audience through Google and Meta because of their lower media-buying rates.”

Ultimately, “monies will always be deployed depending on a brand and business objectives,” stated Javeri of L’Oréal India. “Our loyalties lie with the consumer. When a single platform will drive content discovery to product fulfilment within a native environment giving the best consumer experience, investments will move like this (snaps fingers).”