RSS feed Get our RSS feed

News by Topic

BizReport : Advertising archives : February 06, 2019

Report: Amazon gaining on Google, Facebook for ad spending

As more ad dollars are pushed online, marketers are looking in an interesting place to spend them: Amazon. The digital retailer currently ranks third for ad spending, behind giants Google and Facebook, but one new report indicates that more ad dollars will be pushed toward Amazon over the next year.

by Kristina Knight

The report, a collaboration between Nanigans and Advertiser Perceptions, notes that Google and Facebook currently own digital advertising, accounting for 40% of the overall digital ad spend. Amazon accounts for about 14% currently. But, their new survey found a growing number of marketers are shifting their budgets from Google and Facebook and toward Amazon. In fact, they say budgets for Amazon spending will increase about 25% over the next year.

To compensate for this increased spend, those advertisers say they'll cannibalize a bit of their spending on Google and Facebook.

"Amazon had a marketplace that existed long before its ad business, so when the company decided to compete with [Google and Facebook], the supply and demand already existed -- so Amazon was able to gain momentum quickly. Amazon also had very accurate and robust audience data from its users, including purchases and search history data, which enabled the platform to compete with others from day one," said Ryan Kelly, VP of Marketing, Nanigans.

Why the switch? Marketers already advertising on the retail giant say their ads on the platform show a good ROI and strong performance markers. But, that isn't where the conversation ends. While happy with initial Amazon ad performance, about 40% note that they worry about Amazon having too much of their data/information - many are also selling through Amazon. About one-third (31%) note that Amazon is also a competitor for them because Amazon also sells products.

Other interesting findings from the report include:

▪ 39% of Amazon advertisers say they see higher ROAS on Amazon than on Google
▪ 54% see higher ROAS than on Facebook/Instagram
▪ 32% note that Amazon CPMs are lower than on Google
▪ 38% say Amazon CMPs are lower than on Facebook/Instagram

"There's very likely a real first mover advantage that brands are experiencing with Amazon. As we begin to move past the early adopters, and advertising on Amazon starts to get adopted by the masses like that of the Duopoly [Google and Facebook], the channel could become less effective for retailers as more competition will drive up prices thus lowering ROI," said Kelly.

Tags: Advertiser Perceptions, advertising, digital ad spend, digital ad trends, digital marketing, Nanigans

Subscribe to BizReport



Copyright © 1999- BizReport. All rights reserved.
Republication or redistribution of BizReport content is expressly prohibited without the prior written consent.
BizReport shall not be liable for any errors in the content, or for any actions taken in reliance thereon.