Amazon is a powerhouse when it comes to e-commerce. But did you know that they also make a killing from advertising? Yep, right at the top of every page on Amazon, you'll see results marked as "Sponsored ⓘ". It's Amazon's way of showing you a list of 'curated products', but the reality is that these products are only at the top because some sellers decided to pay Amazon an advertising fee. Advertising is Amazon's most inconspicuous revenue stream - but it's one that makes them billions of dollars each year!
Photo by Christian Wiediger on Unsplash
How does advertising work on Amazon, and what are the benefits for sellers?
Amazon is the world’s largest online marketplace, and advertising on Amazon can be a great way to reach out to potential customers. When a seller advertises on Amazon, their product is displayed on the search results page when someone searches for relevant keywords. In addition, advertising on Amazon can also help to increase traffic to a seller’s product page and boost sales. There are two main types of advertising available on Amazon: Sponsored Products and Product Listing. Sponsored Products are paid ads that appear on the search results page, and they can be targeted to specific keywords. Product Listings are essentially unpaid ads, and they appear on a seller’s product page. There are many benefits to advertising on Amazon, but it is important to understand how the system works before getting started. By using advertising effectively, sellers can boost their sales and reach a larger audience.
The company that is now seemingly unassuming, Amazon made $9.7 billion in advertising revenues during its fourth quarter of 2021 alone! For the whole year 2020-21, it earned even more than YouTube's ad revenue which was previously thought by many people as being too big to be taken seriously at all -- but not anymore because this source has now been tucked inside "other" section due entirely thanks solely from an incredible rise over recent years with their online retail marketplaces.
Amazon is the most popular shop on earth. Each month, over 200 million people visit Amazon's website in the United States alone. And every time a user visits an Amazon product or service, that person's activity is recorded and stored. To summarize, Amazon's algorithms understand what customers search for, what they purchase, and what they leave behind in their carts.
For advertising agencies and businesses, this is a free-for-all. Do you want to get your product more exposure up top? Sponsored banner advertising is available. Do you want to show off your goods to the world? Run a short film on Amazon's homepage for $5. Would you like something else? If you invest in ads on Amazon, there are almost certainly options for you.
But advertising on Amazon isn't just a way to make your product more visible. It's also an incredibly effective way to reach out to new customers and connect with them on a personal level. Because Amazon knows so much about its users, it can target ads specifically to them. And because Amazon is so popular, advertising on the site can reach a large number of people very quickly.
As some research has shown, nearly three in four clients were inclined to begin their online search for a product on Amazon. In that light, Amazon adverts provide advertisers greater value for their money than advertisements on social media or YouTube. And they aren't overly pushy about it either. Because you didn't notice the sponsored tag, you may often overlook it.
Next, Amazon's advertising business has remained relatively unchanged from Apple's privacy changes. The modifications stripped Facebook and Google's ad operations of their behavioural data, which generated a profit. However, Amazon mostly relies on data collected through its own app and website. Nothing is altered as a result of what Apple does to the operating system.
The Amazon ad engine is also rather inconspicuous. Advertisers can use keyword-targeted advertisements to promote goods linked to a set of keywords. That means a perfume maker will pay for its product to be shown when people type "perfume" or "deodorant." That's all there is to it!
Meanwhile, as advertising spending has risen across the board, Amazon has started inserting sponsored goods in its suggested area such as "Products related to this item" or "More items to explore," nudging people toward these sponsored items a little further.
Amazon has been investing heavily in advertising. Ad income now accounts for Amazon's third-largest source of income, behind online sales and AWS (Amazon's cloud business). The company's ad business now generates more yearly revenue than its physical shops ($17 billion), as well as about the same amount as its subscription services ($31 billion).
Amazon most certainly isn't the first corporation that springs to mind when it comes to advertising. But with the aid of inexpensive advertisements, The Everything Store is going berserk.
Concluding thoughts
Conclusion paragraph: If you're looking to make some extra cash, consider advertising on Amazon. It's a great way to get your products in front of a huge audience and can be very lucrative. Of course, as with any type of advertising, it takes some effort to see results, but if you put in the work, you can definitely see a return on your investment.
Comments