The idea that Amazon could take on some of the internet giants including Google and Facebook when it comes to digital media was once a fantasy. Now it seems plausible since some of the world’s biggest brands are starting to consider Amazon as their top choice when it comes to advertising.
Interest in the company has grown since the start of the year with RBS Group chief marketing officer David Wheldon and WPP boss Martin Sorrell speculating that the online retailer has the potential to break Google’s and Facebook’s stronghold over digital media and could give them a run for their money, when it comes to digital advertising. Amazon has stoked that enthusiasm, pledging to become an “ad platform leader” for advertisers capable of “best-in-class service” and “strategic consultation,” according to several marketing and agency executives who have heard its pitch.
“What was once a search and programmatic proposition now includes Amazon’s Echo personal assistant and its Prime Video service,” said Sam Fenton-Elstone, VCCP’s chief digital officer. “Conversations between the agency and Amazon’s sales teams are much bigger than they were 12 months ago, when the focus was on trying to shift money from Google through programmatic and search,” he said.
VCCP has seen advertisers shift paid search dollars from Google to the online retailer in the past nine months, which “have delivered strong ROI.” Moreover, GroupM, which handles budgets for NBCUniversal and Unilever, said clients are spending 10 to 15 times more on paid Amazon search ads each month in 2017 than a year ago. Bloomberg reported 55 percent of online shoppers in the U.S. start their product searches on Amazon.
However even this shift in ad budgets is just a small fraction of the whole pie. While Amazon is yet to rake in a lot of money like its social media counterparts, researcher eMarketer predicts it will rise by a third to $1.5 billion this year and top $2.4 billion by 2019. Google, by contrast, posted more than $79 billion in ad revenue in 2016, while Facebook reported $27 billion.