Amazon Sponsored Links Offer Exciting New PPC Opportunities for Your Business

By Unknown, blog post 21/10/2014

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Just over a month ago, the Wall Street Journal reported that Amazon plans to create its own platform for placing ads online. Although the retail behemoth hasn’t confirmed the plan to date, the report says that the platform – dubbed Amazon Sponsored Links – will resemble Google AdWords.

To begin with, Amazon will use the new platform to replace the ads powered by AdWords on their own website. However, in the future, they could use the platform to place ads on client, affiliate and third-party websites in a bid to challenge Google’s $50bn-a-year digital advertising business.

Here we look at how Google may react, what benefits Amazon’s new platform may create and how it will affect us and our clients.

What Opportunities Might Amazon Sponsored Links Offer?

If Amazon is to create ads that prove useful to businesses, they will need to successfully leverage the purchase data they possess on their 250 million users.

In the UK, shopping on devices such as smartphones and tablets doubled from £1.5bn to £3bn in 2013. One of the ways in which Amazon could use purchase data to create adverts that are more effective than Google’s is through their multi-device tracking capabilities; because you use the same Amazon account on all devices, it will be easier for Amazon to track how the conversion process occurs from device to device.

In addition to multi-device tracking, Amazon could open up new avenues of revenue by offering customer insights through increased segmentation that Google can’t. For example, Google can see what websites users visit and can then use that data to segment those users into groups based on their intention to buy. However, Amazon’s data on consumer buying behaviour allows them to segment their users much more specifically.

How Might Google Respond?

How Google responds will depend on how well the Amazon ads launch. I think Google will hold off any real reaction until after the launch of the service, to see if it is actually a threat or not. At this point in time a reaction is hard to gauge because Amazon is not a search engine in the same way Google is, so it doesn’t really impact Google’s share in that respect.

For now, Amazon is only pulling itself out of Google’s Search Partners network. However, if Amazon is able to use its new platform to place ads on external sites, Google may have no option but to respond. In theory, then, an increase in platform options and ad competition could drive cost-per-clicks down while forcing Google to expand both its services and support to retain customers.

Yet no matter how successful they might be in the future, Amazon’s ads will never be displayed on Google’s search engine results pages (SERPs), which is likely to remain the first stop for the majority of online shoppers. As such, Amazon Sponsored Links is unlikely to be the ‘Google Killer’ that is frequently thrown around every time a new ad platform is announced. But I do hope it will prove useful to Strategy’s clients.

For instance, if Amazon knows that someone bought the book ‘How To Be A Gardener’, they can target those users with adverts for complementary products such as gardening equipment and clothing. For businesses with a consumer audience, the potential for greater user segmentation could provide spectacular results.

How Will Amazon Sponsored Links Affect Your Paid Search Campaigns?

For some businesses, Amazon Sponsored Links may pose a significant increase in workload while they ‘learn’ how campaigns work in another medium. Each medium responds differently to similar adverts. However, this will always be the case, as it was when Bing Ads were introduced and will be again if any other PPC platform arrives in the future.

Paid search campaigns will also become more complex to manage, as every new platform has its own editing program that comes with a unique set of quirks. As such, paid search campaigners will need to get to grips with new tools before they can efficiently upload new builds and changes.

In addition, Amazon paid search campaigns will require separate management to those on Google and Bing, which will also increase a team’s workload. In short, this is because the algorithms differ between each platform, so different keyword and ad combinations will be effective on each.

Will Amazon Sponsored Links be Essential for Your Business?

At this point it’s hard to envision that Amazon Sponsored links will be necessary for all businesses, mainly just those in the ecommerce sector. However, with Amazon profiting directly from the adverts they place, hopefully it will mean they move them to a more prominent location, as ultimately this would have an overall positive effect on the performance of digital ad campaigns.

Although Amazon’s new platform won’t completely reshape the PPC landscape, it will give paid search teams more tools to consider when formalising a digital ad campaign for their business. Of course, if Amazon also finds success replacing ads on third-party sites, the potential of the new platform could increase exponentially in the future.

Here at Strategy Digital we’re already working hard examining how Amazon Sponsored Links can be incorporated into our clients’ PPC campaigns. 

If you’re interested in creating a paid search ad strategy for your business, take a look at our PPC service pageOr, if you would like to talk in more detail about how PPC campaigns could help grow your business, get in touch.

Written by David Mooney