Amazon is driving brands to increase ad spent during Prime day

  • On July 16, 2018

Amazon Prime Day is officially here.

If you are not yet familiar with it, Prime Day is similar to Black Friday – a 36h global shopping event created by Amazon. Like Black Friday, it only lasts one day but is aimed exclusively at Amazon and is for Prime members only.

Prime Day enables Amazon to achieve 3 key objectives:

It is an opportunity to boost sales, Prime member subscriptions and also for its revenue stream coming from advertising. According to the Financial Times, “sellers and consultants say Amazon has advised some merchants to double or even triple their overall ad spending and the amount of money they bid on keywords if they want to get their products at the top of search results” during this key sales day (Source: Financial Times, July 13th, 2018). The intense traffic to the website generated by this event offers a great opportunity to sell all types of Retail Digital Media, from display ads and retail search such as sponsored products. Indeed, the brands who want to maintain their share of voice need to invest more and money to stay competitive.

This years’ Prime Day sales are expected to hit $3.4 billion, a 30 percent year on year uplift, according to retail think tank Coresight Research. However, according to analysts, advertising represents the most profitable revenue stream.

As a result, Retail Digital Media is exponentially growing at Amazon. In May, Amazon reported that their advertising revenue reached a staggering $2 billion. Mark Mahaney, Analyst at RBC Capital Markets, estimates that by 2022 Amazon’s ad revenues will top $25bn.

 

Learn what is Retail Digital Media

What does this mean for brands?

  • As stated in a post earlier this year, investing in Retail Digital Media on Amazon is a no-miss media channel to drive eBusiness in almost any category and any market. It is more important than ever to invest with a cost-conscious mindset, as good buying conditions are a key driver of Return On Investments.
  • Visibility is even more important during key sales periods as millions of users are looking for products. A strategic retail search strategy helps brands make sure they appear on the top of result pages during these key periods.
  • Growing RDM investments at Amazon also carries some risks that must be mitigated by plans for also improving RDM at Click & Mortar Retailers as well.

 

Authors: Alexia André, Jordane Beller

At the eBusiness Institute, we have been studying the Retailer Digital Media space since 2015.  Get in touch to know more and leverage this opportunity as a competitive advantage for your company.

Sources: Amazon set for Prime Day ad revenue bonanza

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