What are the ingredients for an important advertising platform? Reach? Of course. Unified IDs across devices…in a programmatic age, yes. Proven impact? Definitely…marketers need to know they are getting return for their investment.
So who offers all of this in spades? Amazon! Walmart too…yes, the folks who redefined retailing are about to redefine marketing too.
(For an excellent article on Amazon’s ambitions and opportunities, click here)
Here are seven ways that retailers as publishers and ad networks will produce a sea change.
1. Shifting marketing towards purchase journeys and away from funnels. Traditionally, marketers have been obsessed with the funnel without knowing if building brand consideration today has any impact on sales a year from now when consumers need a new smart phone, TV, mortgage, etc. In a digital age, marketers can selectively target those who are actively shopping where 90% of short term sales actually come from, now proven to double sales response to advertising! (For more on this, click here.) Amazon is like Google and Walmart combined. People search for products there and then they buy! Brand consideration, meaning, preferences, and transactions can all occur spontaneously and simultaneously in Amazon where it is reported that more product search occurs there than Google. Walmart is already joining Amazon as retailer/publisher/ad network, leveraging its powerful frequent shopper data. There is no reason that Amazon and Walmart couldn’t also offer networks to target segments across the web on their proprietary platforms. This new class of advertising platform will attract massive shifts of ad dollars for targeting.
2. Unified IDs will become cost of entry. All marketers want to practice integrated marketing but many still have cookie based DMPs that inhibit this because advertising and conversions across devices cannot be connected via cookies that are browser specific. With Google, Facebook, and Amazon (and Walmart, and so on) offering deterministic unified data, why settle for less?
3. The big two become the big three. Digital marketing is kind of a duopoly today… Google and Facebook are way ahead of anyone else in ad revenues. Amazon could easily challenge them and turn the big two into the big three which marketers would welcome.
4. Performance advertising will mean more advertising. As the connection between advertising and outcomes is contained in the same ecosystem, the ROI of advertising will become clear. This will attract more ad dollars. Advertising will become a growth business. Proof of performance caused a massive shift once before, in the early 80s, when marketers began seeing weekly sales data from store scanners, $40 Billion shifted from advertising to trade promotion.
5. Walls will get higher. Not all changes are good. Marketers hate walled garden practices because they cannot connect advertising effects from within the walled gardens to anything that happens outside which impedes multi-touch attribution methods. Also, marketers cannot verify ad serving independently. Unfortunately, Amazon and other retailers are walled gardens too, so a higher percent of ad dollars will be behind walls. Unless they change their practices, this is becoming like Game of Thrones with different kingdoms. Not good.
6. Automated replenishment will increase brand loyalty. Amazon is way ahead on automated replenishment for frequently purchased items. I can now just talk to Alexa and a new order of a previous purchase shows up the next day. Easy peezy. Repeat rates go up. Yes, this is a form of loyalty.
7. Platform specific expertise will be required from agencies. Marketers will want to choose agencies who totally get Amazon and Walmart. In fact, WPP just bought a company that gives them exactly this Amazon expertise.
To wrap all these changes up in a theme, some of you will remember in 2009 Procter announced its initiative called “store back” marketing. If it doesn’t work on the shelf, it’s a #fail. Well “retailers as publishers and ad networks” is the final piece to making that approach for product marketers a reality. Now brand building and activation can occur within single platforms. Marketers will waste fewer ad dollars against dormant consumers who are not interested until they want to buy something. “Shopper marketing” will become just “marketing”, rivaling digital, programmatic, and mobile in growth rates, enabled by Amazon and the other big retailers who follow suit. Marketers will respond, and marketing will change forever.
And for you skeptics, in the past five months the media reported these stories that support this new shift in marketing players:
August 23rd, Google and Walmart combine forces to combat Amazon.
August 29th update, Amazon is growing its off website programmatic business.
August 31st, Insights into the pitch that Amazon gives to agencies. Quite different from Google or Facebook because they are a retailer first, but L’Oreal is shifting search dollars already.
Sept 8th, Now Google is partnering with Home Depot.
Dec 26th, Amazon ambitions reported on CNBC.