Home Baby brand Amazon Aims for an Even Bigger Prize: The Non-Endemic Advertiser

Amazon Aims for an Even Bigger Prize: The Non-Endemic Advertiser

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from Amazon
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the advertising unit was a point of light in its recent third quarter results. Advertising revenues are very profitable, and they are increasing.

But Amazon is preparing for a future where that growth may slow as it looks to other market segments that would benefit from its growing lineup of advertising solutions.

“Non-endemic” brands are brands that do not sell physical goods on Amazon, but may advertise on its site or other owned media properties. Think car manufacturers, insurance companies and restaurants.

During his “Unboxed” conference in October, Amazon announced a new way for non-endemics to advertise on Amazon.com – the Sponsored Display type of advertising. It’s a completely self-service ad type that requires no minimum spend and is especially easy to set up, deploy, and manage compared to Amazon’s Demand Side Platform (DSP), Amazon’s programmatic advertising platform. Amazon. This effectively removes any past barriers preventing non-native brands from advertising on Amazon’s giant advertising ecosystem.

For brands that are really looking for more sophisticated ad buying and reporting, they can use DSP in combination with Amazon Marketing Cloud – combining their own sales data with DSP impression data, showing which ads helped customers while along the buying journey.

With these tools ready, Amazon is hastily trying to shake off the perception that its advertising capabilities are only for mainstream brands. At Amazon Unboxed, the grand opening case study was not for a rampant brand, but for Carnival Cruiseswho is the sponsor of amazon’s new tv show The stack on. The strategy is starting to work, at least with Amazon’s streaming TV placements. Thursday Night Football and Freevee both feature plenty of ad placements from traditional non-endemic companies such as State Farm, Geico, and Hyundai.

These brands can benefit from Amazon’s rich understanding of their customers’ demographics, purchase history, and interests. While watching a Freevee TV show recently, among ads for Geico, Oreos, and Sensodyne, I was shown a Zaxby ad. Zaxby’s is a regional fast food chain with locations almost exclusively in the Southeast. As an Atlanta resident, this ad was relevant to me, and Zaxby’s probably targeted viewers based on geography.

Geography is one of the simplest forms of targeting, but I expect much richer targeting options to be used in the near future to provide impressions to users at different stages of the buying journey. Amazon knows what car model I have from the type of car mat I just bought. They know I may be considering a car upgrade soon and could include me in a pre-built audience of potential car buyers that Hyundai would advertise to. Amazon also knows from my grocery shopping that I’m health conscious and live in Atlanta, so maybe Sweetgreen should be more interested in targeting me than Zaxby’s.

This new market for advertisers could be great news for Amazon shareholders, but not everyone will be happy with Amazon’s diversification strategy. Endemic brands (who actually sell their products on Amazon) may find that increased competition for ad placements increases their ad costs. Mondelez and Hyundai could now compete for the same ad inventory from Amazon to target a suburban family with young children.

So what should non-endemic brands do?

Brands need to question their thinking about what Amazon advertising really is. It’s not just a place for consumer product brands anymore. Amazon knows more about our planned and actual purchases than any other company, and this activity may signal other interests. A buyer looking for baby gear may be willing to consider a life insurance policy.

Brands also need to get up to speed on Amazon’s DSP (demand-side platform). This programmatic media buying platform has rich audience targeting capabilities such as lifestyle segments, in-market audiences, and even your own customers. Ad creative options are also worth investigating – they’re broader than you might think.