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Triopoly Calling? Brands Lured by Amazon Advertising’s Strong ROI

Written by: Shane O'Neill, Director of Content

In 2018, Amazon’s advertising platform became a true player.

Consider that the company started the year in fifth place in terms of ad revenue. Yet it ended 2018 in third place behind “the duopoly” of Google and Facebook. eMarketer predicts that Amazon will capture 7% of all U.S. digital ad spend by 2020.

New Nanigans research delves into the why and how of Amazon advertising’s sudden move into the top three.

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Retail advertisers have long approached Amazon cautiously. And they remain somewhat fearful of what Amazon could do with their data. Many see Amazon as a competitor. However, our research shows that advertisers are also captivated by the ROAS (return on ad spend) pricing, tools and capabilities of the Amazon platform.

Amazon advertising ROAS edges out ‘duopoly’

In our survey of 100 retail advertising decision-makers, respondents said Amazon receives 14% of their ad spend on average, putting it in third place behind Google (21% of budgets) and Facebook (19% of budgets).

Moreover, advertisers plan to increase their spending with Amazon over the next year at an average of 25%. To facilitate these increases, survey respondents said they’re shifting budget from Google (29% doing this) and Facebook/Instagram (34% doing this). A larger percentage (41%) are adding incremental budget specifically for Amazon ad spend.

According to our survey, one of the main reasons brands keep advertising on Amazon is that it outperforms both Google and Facebook/Instagram on key performance indicators, including:

  • Return on ad spend (ROAS) – 39% of respondents saw higher ROAS than Google, and 54% saw improvement over Facebook/Instagram
  • Cost per mille (CPM) – Thirty-two percent of marketers reported lower CPMs than Google, and 38% reported the same about Facebook/Instagram

For more data and insights about Amazon’s status as an ad platform, download the full version of our comprehensive new report, “Amazon’s Advertising Ascent: What Retail Marketers Really Think”

The report includes: Amazon ad budget trends; comparisons of key performance metrics between Amazon, Facebook and Google; top marketer concerns, from data privacy to competition; exclusive data about how Amazon advertising drives online sales; and much more.

Get the Report

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