Digital advertising: is Amazon making a move on Google and Facebook?

Digital advertising: Amazon, are they making a move on Google and Facebook?

Advertising is more important than ever because it is more capable than ever, thus making it more useful to businesses. Digital corporations such as Facebook and Google are thriving as advertising platforms. As the number one advertiser, Google is on course to make $84.69 billion in net advertising revenue in 2018. The reason for this success is that digital advertising works and businesses know this, meaning that the field of advertising is only going to expand.

Amazon is now ranked the No. 3 digital ad platform in the US, overtaking the likes of Microsoft to sit behind leader Google and runner up Facebook. It is important to note here that the Google/Facebook duopoly holds 57.7% of the total digital ad spend compared to Amazon’s 4.1%. However, Amazon may very well be making a well-planned move that resembles that of a game of chess. The projection shows that Amazon has a long way to go to catch Google or Facebook, however if the right moves are made, Amazon could slowly close the gap.

Amazon share of total US digital ad spending

 

Additionally, according to marketing firm Merkle, companies spent 165% more on Amazon’s sponsored ads in the second quarter of 2018, compared with the second quarter of 2017. Having said this, the aforementioned figures are only based on the US market. However as Omar Oakes’ article states, the UK’s adspend is predicted to keep growing despite concerns surrounding Brexit. The amount the UK spends on advertising is predicted to rise from 2017’s figure of £24.21 billion to £26.07 billion in 2020. This emphasises that advertising is growing worldwide and therefore, as a truly global platform, Amazon has as much potential as any to impact advertising.

The Move

If Amazon is wanting to make a significant impression on the advertising leader board, it needs to find a strategy that it can truly ‘own’. Google wants to organise the worlds information. By collecting, organising and analysing such vast amounts of information, Google has developed an algorithm that allows it to target adverts incredibly specifically and to vast audiences. Facebook on the other hand has provided a platform that people are extremely accepting of. Facebook has managed to collect data that is personal and social, giving it the ability to create algorithms that target ads based on personality and social activity. Amazon, in terms of advertising, is yet to distinguish a clear strategy moving forward. However, recent articles highlight a potential trend that we at Traffic Jam Media think could be rather important. A press release has revealed that Amazon has just launched at least 11 new products into their internet of things catalogue, including a new Amazon Echo Show and Amazon Basics Microwave. It seems that Amazon are in a race with Google to control the smart home market. This is quite possibly due to the potential of this technology. Smart home products are the way into the households of millions and although they are not currently, these are arguably destined to be commercial advertising devices.

Therefore, the idea is that if Amazon can get ahead of Google in the battle for the smart home, then it can dominate that niche market. Once smart home devices become advertising aids, Amazon would have the upper hand in a brand-new advertising market that holds numerous possibilities.

The TJM Take

Amazon is not going to overtake Google’s incredible advertising position anytime soon. But, if this proposed move is in fact accurate, and comes together as stated, we will certainly see Amazon’s advertising statistics improve rapidly. This is very exciting for digital marketers and advertisers. As an accredited Google Ads partner we know the value of these advertising giants. To have another significant platform in the shape of Amazon in the home, or to have a new advertising market in the shape of smart home devices in general, would be superb for businesses and a great tool for Traffic Jam Media.

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