Dive Brief:
- Amazon's growth as a venue for digital ads continues to grow, but marketers are finding key platform features lacking, and some don't have the skills to master the e-commerce giant's offerings, according Marin Software's latest annual "State of Digital Advertising Report," which was shared with Marketing Dive. The firm surveyed 460 digital marketing managers and executives over two months.
- Ninety percent of respondents reported they started advertising on Amazon in the last year, and 60% expect to increase that advertising. Another 37% expect their Amazon budget to remain flat, while only 3% expect a drop. Over half (55%) of digital marketers said they started advertising on Amazon because it was a growth opportunity, while 27% were looking to increase purchases at the lower end of the funnel.
- But campaign management and reporting tools on the massive retailer's site are standing as a barrier, Marin found. Thirty-seven percent of those surveyed found Amazon's campaign management tools are "not optimal." More than a quarter (28%) of respondents also avoid Amazon Advertising due a lack of expertise — a trend that's indicative of a larger digital marketing skills gap, per Marin.
Dive Insight:
The new Marin report adds more validation to Amazon's position as the 600-pound gorilla in digital advertising and a platform that can viably compete with industry stalwarts like Google. But unlike other batches of research about the online retailer's booming ad sales, Marin's survey pinpoints how the platform could be somewhat hampered by shortcomings in areas like campaign management and reporting, along with marketers' perceptions of the skills required to find success on Amazon Advertising.
Among those surveyed by Marin, 23% cited Amazon's reporting features as "not as established" as other channels. Amazon, perhaps because it's a relatively new player in the space, also doesn't match key rivals' degree of trust with advertisers. Marin found that Google was the most trusted publisher, followed closely by its YouTube subsidiary, and then Amazon and Facebook.
Google wields the advantage of having popularized paid search, which remains the lead channel among digital advertisers, receiving nearly 40% of their ad budgets, according to Marin. One of the most popular new ad formats is Google's Responsive Search Ads (RSAs), which launched last summer and use machine learning to test the effectiveness of variations in content against specific search queries. Eighty-four percent of respondents who use paid search are using or will use RSAs, Marin said.
But the e-commerce capabilities that helped establish Amazon as a tech titan are also becoming a more desirable function for marketers. Sixty-five percent of Marin's respondents said they will be increasing their use of shoppable images and ads in the coming year, and more (32%) pointed to visual search as a trend to watch compared to other possible trends.
Google has introduced a number of shoppable ad formats and experiences this year as it looks to compete more closely with Amazon and retain the search budgets that the e-tailer is increasingly siphoning off from categories like packaged goods.
A report last month from Juniper Research helps to capture Amazon's explosive growth, forecasting the platform's ad revenue will grow 470% by 2023 to reach 8% of the total global digital advertising market. An eMarketer report from February shared similar sentiments, predicting that Amazon's share of the U.S. digital ad market will hit 10% by next year.
The biggest reasons for the popularity of advertising inside this huge online store, according to Marin: because it's a growth opportunity or because advertisers want to increase purchases at the lower end of the funnel, when users are ready to buy.
However, an Analytics Partners' report in June found that 70% to 90% of the impact from Amazon display ads drives sales outside of Amazon. Per Analytics Partners, this at least in part because many consumers go to Amazon first when they're searching for a new purchase.
