Amazon Just Announced 7 New Advertising Features. Which Ones Matter Most?

Retail Amazon Just Announced 7 New Advertising Features. Which Ones Matter Most? Kiri Masters Contributor Opinions expressed by Forbes Contributors are their own. I cover online marketplaces from a retail brand’s perspective.

Following New! Follow this author to stay notified about their latest stories. Got it! Oct 26, 2022, 09:00am EDT | Share to Facebook Share to Twitter Share to Linkedin Amazon AMZN AMZN announced a slew of new advertising capabilities at its Unboxed event in New York today. Observing the enhancements in aggregate provides a view into a roadmap that Amazon holds close to its chest.

As the retailer appears to brace for economic headwinds , advertising revenue is highly profitable and represents a financial bright spot for the company. Many of the enhancements represent an easier way-in for smaller and emerging brands. These include features like campaign presets and campaign recommendations, as well as a simple video creation tool.

“We want to bring the power of video advertising to more brands, no matter their size or level of resources,” said Tanner Elton, vice president of U. S. sales for Amazon Ads in a statement.

Beyond what the announcements tell us about Amazon’s own advertising business, these changes will affect existing advertisers – mostly positively, but at the same time potentially increasing competition. Here’s an overview of 7 new features and programs announced today, and my personal point of view around to what extent the feature is going to move the needle for brands already advertising on Amazon. At a Whole Foods Market grocery store in San Ramon, California, signage advertises new discounts for .

. . [+] members of the Amazon Prime service from Amazon, which acquired Whole Foods Market in 2017, June, 2018.

(Photo by Smith Collection/Gado/Getty Images) Getty Images MORE FOR YOU Juan Soto Contract Rejection Could Make Orioles A Better Buy Than Nationals Juventus Have Reached Their Nadir Under Max Allegri Nio Stock Is Likely To Quickly Rebound From Current Sell Off 1. Rewarded Sponsored Display What it is: Brands will be able to add an Amazon shopping credit directly into the Sponsored Display creative. Customers receive the reward by clicking on the ad and purchasing the featured product.

Amazon’s pitch: In a 2021 Amazon Ads survey of U. S. adult Amazon shoppers, 92% of respondents said they were more likely to take an action if offered an Amazon shopping credit, demonstrating the value and utility of this type of experience.

A Rewarded Sponsored Display ad. Amazon My take: This is one of the more exciting announcements, as it is a net-new feature that we haven’t seen before. For several years, deals and coupons have shown prominently in ad creative on Amazon, and we see conversion rates and better return on ad spend (ROAS) when these deals are visible.

What remains to be seen is whether customers prefer an actual savings discount, or a credit. Definitely something worth testing. What’s interesting is that Amazon launched this feature only with Sponsored Display ads, not with Sponsored Product ads.

The latter ad type is far more widely used by advertisers. This is a trend throughout the announcements – Amazon investing more features into Sponsored Display than the other ad types. This feature is ‘coming soon’ to US advertisers soon in closed beta.

Sometimes these take a while to roll out. 2. Sponsored Display for non-endemic brands What it is: Amazon Ads is introducing Sponsored Display for brands that do not sell in Amazon’s store.

Amazon’s pitch: Previously, sponsored ads had only been available for brands that sell products on Amazon. Now, businesses that sell products and services in verticals not available on Amazon, like restaurants and hotels, can use Sponsored Display to reach the highly engaged Twitch audience. My verdict: This is currently offered to U.

S. advertisers in closed beta on Twitch. So this is a very narrow use-case for now.

It’s unclear when or if this will extend to on-site Amazon. com placements and other owned media properties. If it does – and that’s still an if – there will be winners and losers here.

The winners will be non-endemic brands. Many brands are facing higher customer acquisition costs as a result from IDFA changes, but Amazon has continued to offer a stable return on ad spend (ROAS). So opening up Amazon’s ad ecosystem to a broader range of potential advertisers looking for a good return on investment.

But there’s a better alternative that already exists – Amazon’s demand side platform (DSP). Audience targeting options in Amazon DSP are extensive, and continually growing. A life insurance company, for example, could target new parents (identified through their actual shopping activity) within certain household demographics.

Within DSP, brands also have a wider selection of ad inventory. These ads can display on Twitch, Amazon streaming video, Amazon. com, and Amazon’s third party advertising network which includes media sites like Forbes and Vox.

Sponsored Display targeting options and display options by comparison are much more narrow. The downside of DSP is that its suited to larger brands with bigger ad budgets. The system is complex and not open to all.

Brands generally use Amazon’s managed service or an agency with direct connection to the DSP. One upshot of this Sponsored Display announcement is that it is likely to be self-serve with very low spend minimums – offering a lower-commitment entry point for brands with smaller budgets or just dipping their toes in. Ultimately this is a step in the right direction for non-endemic brands to leverage Amazon’s growing audience.

But with the current limitations, DSP presents a better media buying opportunity right now. Now, what about the losers in this scenario? Existing endemic advertisers will face more competition coming in, ostensibly driving up advertising costs in Amazon’s auction-based bidding system. Although 13-22% of Amazon search results pages are taken up by sponsored slots, there is only so much ‘real estate’ that can be offered as sponsored placements versus organic results.

As the pool of advertisers grows, costs could mount. 3. Sponsored Display Video Creative What it is: A video creation tool that allows advertisers to easily create video campaigns that showcase their products and stories to millions of customers on Amazon and elsewhere online.

Amazon’s pitch: Developing video creative can be cost-intensive. With this feature, Advertisers can deliver immersive video ads, such as tutorials, demos, unboxing, and testimonials, and measure campaign performance with new video metrics. My verdict: Without a lot of details on exactly what this looks like, I will reserve my judgement.

This sounds like a step above an existing ‘video builder’ feature that has been live for several months now . There are many excellent video editing tools out there, and the latest crop includes very compelling AI features. Is Amazon’s feature intending to compete with these? I do think Amazon is hitting on a painful issue for many brands, however.

There is a huge need for immersive content that even internal brand teams at large companies struggle to fulfil. Amazon’s own data confirm that regularly refreshed product content and store pages improve sales. Having fresh, compelling content (especially video content) is something that shoppers are starting to expect.

The bar continues to be raised in terms of content quality. Whether Amazon’s home-baked tool is the right solution for that need remains to be seen. 4.

Digital Signage Ads in Amazon DSP What it is: Digital Signage in Amazon Fresh stores, now available to purchase programmatically through the DSP. Amazon’s pitch: Programmatic buying gives brands more flexibility and control over where their ads are featured. Campaigns can be scheduled based on store location, by daypart, or by location of the digital signage within the store.

This creates more opportunities for brand discovery and will enhance the customer shopping experience by creating a wider variety of in-store ads. My verdict: The use-case is pretty narrow for now. The main limitations are two-fold: it is only available for Amazon Fresh stores and not Whole Foods (there are only 39 Fresh stores and over 500 Whole Foods stores in the US); and it is available through managed service only, which usually commands a minimum ad spend.

For large CPGs, this could be a great opportunity right now, and something to jump on as a test-and-learn exercise. For everyone else, it is a trend to watch. While limited right now, Amazon could eventually roll this out to Whole Foods and its other store environments, and make more placements self-serve in the DSP.

5. Sponsored Products campaigns with presets What it is: Presets are Amazon-recommended campaign settings like including daily budgets and bidding strategies. Presets are now automatically featured in the ads console for new products.

Amazon’s pitch: Amazon Ads recommends campaign settings, including daily budgets and bidding strategies, that look to remove the ambiguity of starting a new campaign or launching a new product on Amazon. Amazon Ads found that campaigns launched with presets observed a 77% increase in clicks, and a 29% increase in conversions compared to campaigns that did not utilize presets. 3 My verdict: this could be valuable for brands who are just getting started with Amazon ads and are looking for some guardrails.

Alan Moss, vice president of global advertising sales at Amazon Ads told me in an interview, “For years, customers have been asking, how do we benefit from Amazon’s experience running ads? They want to take advantage of what we already know, and have less trial & error along the way. ” My team has some concerns about efficiency though. The metrics Amazon shares – a 77% increase in clicks and a 29% increase in conversions – indicates that ACoS will be higher.

Still, this feature could be beneficial in some circumstances, such as new product launches which usually require much higher initial bids to gain traction. Again, something to test and find the correct use-case for. 6.

Performance recommendations What it is: Performance recommendations are in-console, actionable best practices for Sponsored Products campaigns. Amazon’s pitch: As advertisers utilize the ads console, performance recommendations works in the background, constantly looking for Sponsored Products campaign tips that can be adopted with one click, such as new keywords to prioritize or bid suggestions—giving advertisers in-the-moment feedback to improve campaign performance based on rigorously tested and validated best practices. My verdict: This is not so new.

Amazon has been making performance recommendations for advertisers for a long time. It seems that this release is focused on bringing those recommendations front and center, to better guide new advertisers. 7.

Amazon Marketing Cloud (AMC) enhancements What it is: Amazon has added Sponsored Display and digital subscription events to AMC, more pre-built instructional queries, and the ability to manage DSP audiences within AMC. Amazon’s pitch: “ Offering more actionable insights and increasing interoperability across our ad tech suite are examples of how we’re building to help brands operate more efficiently and make more informed business decisions,” said Keerat Sharma, director, Amazon Marketing Cloud and Ad Tech Solutions, in a statement. My verdict: Incremental, but solid, additions to Amazon Marketing Cloud.

The takeaway Overall, these changes are welcome additions for brands who advertise on Amazon. However, the fundamentals remain the same. What these new features show in aggregate are a few ways that Amazon is looking to expand its reach and usefulness to different types of advertisers, beyond the base of endemic, larger brands that are already spending as much as they are probably going to spend in the future.

Amazon is arming smaller and emerging brands with tools to get them started with advertising. This represents a very “long tail’ of advertisers, and if Amazon can mobilize them with self-serve tools, will bolster Amazon’s ad revenue. “Empowering brands of all sizes” was a key message in these announcements from Amazon.

Non-endemic advertisers represent an enormous opportunity for Amazon. This is a segment that it hasn’t focused on too much. Part of the challenge will be cutting through to these advertisers.

The other takeaway is a strong focus on Sponsored Display. I was curious to see many more enhancements were added to this ad type than any other. Why? One theory is that Amazon will make more DSP capabilities available to smaller advertisers over time, phasing out DSP access to only the largest advertisers.

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