42% of ad spend through Amazon goes to brand awareness, study says

Dive Brief:

Ad spend through Amazon's DSP was up 30% in Q3, compared with a 27% increase in Q2, as brands increasingly leveraged the ability to target ads on Amazon web properties as well as on those it doesn't own, according to a new report from digital marketing agency Tinuiti. In Q3, 32% of the spend through Amazon's DSP went to properties not owned by the e-commerce giant. The report is based on ad spend managed by Tinuiti.
The cost of ads on Amazon in Q3 accelerated as cost-per-thousand impressions (CPM) rose 15%, up from the 5% increase seen in Q2, per the "Tinuiti Amazon Ads Benchmark Report Q3 2019." Ad spend on Sponsored Products increased 30% year-over-year in the U.S. and 50% for international campaigns. Revenue generated by Sponsored Products jumped 30% while clicks climbed 18% and the cost-per-click rose 10%.
The portion of ad spend allocated to brand awareness was 42% in Q3, a significant lift over the 26% measured in Q1. The majority of Amazon DSP ad spend still goes to purchase-focused campaigns.

Dive Insight:

The report points to continued momentum in Amazon as an advertising platform to help drive sales and awareness both on and off Amazon. With 32% of Amazon DSP spend in Q3 being allocated to sites outside of those controlled by the company, this illustrates how advertisers can use the Amazon DSP to reach customers online — similar to how they would use Google or Facebook. The jump in brand awareness spend suggests brands are starting to embrace Amazon advertising beyond purchase-focused efforts.

Tinuiti's report is the latest indication that Amazon is increasingly competing against Google and Facebook for a share of the digital advertising market. Earlier this year, Amazon acquired Sizmek's ad server and dynamic creative optimization (DCO) solution, a move that could help it better serve and measure online ad campaigns on the back end. Looking ahead, Amazon is forecast to take a bigger share of spend on search ads, a market still dominated by Google.

The e-commerce giant is exploring other ways to further build its blossoming advertising business. During Q2, Amazon published its Small and Medium-Sized Business Impact Report and debuted the Build Your Business with Amazon website to help small businesses sell in Amazon's stores.

Earlier this week, the company ranked No. 3 on Interbrand's world's most valuable brands listing, seeing a 24% increase on the list. This ranking illustrates just how important the Seattle-based behemoth has become to consumers, a fact marketers must pay attention to as they look to drive engagement online.