Amazon is a search engine too, you know! And it is taking market share from the other search engines – overtaking Bing from an advertising perspective a while back. Are you in the game as you should be? Otherwise maybe this report can help you enter.

Our 2020 report « Marketing on Amazon » investigates a number of dimensions including market dynamics, players and roles in the industry, automation, advertising, audiences, attribution, channels, metrics, technology and tools. The report includes 3 main sections covering industry dynamics, the mechanics of Amazon marketing and winning strategies.

Dynamics of the Amazon Marketing Industry

Industry dynamics account for the various players and roles that are active in the industry as well as the existing power relationships. The main players are composed of Vendors (called “1P” for 1^st party), and third-party Sellers (some call them “3P”). But these players often have operators in the form of inhouse teams, digital marketing agencies or a new breed of Amazon-specific agencies.

They are additionally supported by technology providers, engaged with the various roles of Amazon itself and sometimes challenged by substituting products or new entrants in the market.

They operate in an ecommerce market where advertising is taking a more and more dominant role. Amazon is the leader in the worldwide ecommerce market and is also becoming a force to count with in digital advertising. Amazon Ads passing Bing advertising revenue in 2018 went largely unnoticed but Amazon is now counted in the Triopoly of dominant worldwide digital advertising players together with Google and Facebook.

In the Amazon marketing ecosystem, competition is cut-throat and the Amazon experts interviewed for this report gave a broad view of who winners in the Amazon marketing game are. It is no longer the stronger brands, nor is it the big ad spenders, rather, it is players who follow troop on optimizing the customer experience path through the entire journey. Other expert views emphasize the growth of Sellers over Vendors, or the strong position of China-direct manufacturers and yet others would insist on the winning position of the end-user and also the dominant and ultimate advantage for Amazon itself.

Components of Amazon Marketing.

The second and largest section of the report describes the components of marketing on Amazon by putting them into a traditional marketing mix model dating from back in the 1960’s, the 4 P’s model of Product, Price, Place and Promotion. Where this model has been guiding marketers historically, it is considered obsolete by many. However, it precisely describes the variables one needs to optimize to succeed with marketing on Amazon. Price and Place have become fluid and variable, Product and Promotion need constant and intense optimization to succeed in the marketplace.

This part of the report also suggests a model for understanding the Amazon algorithm by describing three major categories of influences on the algorithm: Customer experience obsession, Sales maximization and Product attractivity. A number of more precise direct factors play into these three categories, some of the more important ones being Inventory, review ratings, keyword match, price rank and sales velocity. Other factors like advertising, outside referrals and prime eligibility and more are believed to indirectly play into the algorithm.

Winning Strategies on Amazon.

The final part of the report goes into the details of 4 distinct strategies used by advanced Amazon marketers. Whereas Amazon is clearly a search engine, the big difference from other Search marketing is perhaps that advertising has a very strong impact on organic results. This is something search marketers are not used to and it changes the way strategies play out.

A Full optimization strategy will focus on the market, then the product, the keywords and run through iterations of data acquisition via advertising campaigns. The Holistic takeover strategy is an approach to taking over the domination of a product category by simultaneously addressing all possible sales channels leading into a product and boost its sales velocity to win and maintain the best seller badge and thereby potentially more than double sales.

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