Mike Grehan Archives - acronym

Should Google be scared of Amazon?

By Insights & News, Technology No Comments

In March 2017, Amazon Advertising Platform pulled a surprise upset, beating out Google’s DoubleClick Bid Manager as the most-used DSP with 40% of all brand and agency respondents saying they used it, per a study from analytics firm Advertiser Perceptions.

And while reports acknowledge Amazon’s $1 to $2 billion in ad revenue in 2017 is modest compared to Google’s and Facebook’s, they also say the company is well-positioned to increase its market share.

That’s in part because Amazon offers something of a triple whammy, Bloomberg says: it sells hundreds of millions of items, runs a video streaming service and has access to tons of consumer data.

Amazon has also increasingly prioritized sponsored products in search, nudging brands to pay for better placement, not unlike Google before it.

And, Bloomberg says, CPG companies are also increasingly viewing Amazon as the digital version of store shelves where they can gain prominent display space.

What’s more, most customers that come to Amazon are looking to make a purchase – and, as mobile shopping increases, Bloomberg says more consumers are circumventing search engines altogether and searching directly on Amazon.

In fact, a 2016 study from personalization platform BloomReach found 55% of consumers turn to Amazon first when searching for products online and approximately nine in ten consumers check Amazon if they find a product they want to purchase on another retailer’s site.

“Amazon continues to be the first destination when consumers want to find a product, driven largely by a perceived superior end-to-end experience. Online shopping is all about relevance and convenience and comparison shopping has never been easier – especially with mobile growth,” said Jason Seeba, BloomReach head of marketing, in a statement at the time.

This has prompted an increasing number of brands to ask their agencies for Amazon strategies.

Indeed, Daniel Olduck, executive vice president of global strategy at search agency Acronym, said every one of Acronym’s retail clients made this request in 2017, leading Acronym to emphasize the platform even more in 2018.

Nathan Grimm, director of marketing at Amazon-focused agency Indigitous, too, said client marketing budgets on Amazon have increased significantly in the last year and he expects this trend to continue over the next few years.

But, he added, “I’m not sure if that budget is being taken away from other channels or if it’s the product of expanded marketing budgets.”

Bloomberg, too, noted ad dollars going to Amazon aren’t necessarily coming at Google’s expense, but said it is likely rather from TV or offline retail budgets.

At the same time, Acronym CMO Mike Grehan noted it’s not just Amazon threatening Google, but all mega marketplaces that have heavily trafficked sites with loyal consumers, like Walmart and Target, and that are beginning to realize how much they could add their revenue by selling ads.

And that means PPC budgets may shift even further away from Adwords.

Pointing to Google’s investments in the Shopping search vertical and its experiments with various fulfillment models, Grimm said he thinks Google is likely concerned by Amazon’s growth.

“I think they understand that Amazon isn’t winning market share because of their search engine but because customers love to shop there,” Grimm said. “To counter, Google needs to create or acquire their own rival shopping platform so they can own customer relationships.”

For his part, Grehan said Google is likely to make up some ground by taking more of an affiliate approach for transactions that take place with the aid of a voice assistant. For example, when a consumer asks Google Assistant to make a restaurant reservation, it would go to that consumer’s OpenTable account by using a deep link and Google would take a percentage of the transaction.

Meanwhile, Bloomberg says Amazon is trying to position itself as a lifestyle media brand with broad influence on consumer purchasing decisions.

“The whole point of [Amazon’s rumored acquisition of Target] is to be exactly what they wanted to be, which is the supplier of all things – the Santa Claus principle,” Grehan said.

Learn how to stop selling and start helping with Acronym’s Mike Grehan & Emetrics Summit Founder Jim Sterne

By Content Marketing No Comments

If you’re looking to establish long-term relationships with your customers, tune in to SEMrush’s upcoming webinar, Understanding Intent: Stop Selling, Start Helping, with Acronym CMO Mike Grehan and eMetrics Summit Founder Jim Sterne.

Mike and Jim will discuss why the best advertising is emotional – not persuasive – and connects with consumers far earlier on the path to purchase. You’ll learn precisely how to identify and engage these consumers, as well as how to sustain the relationships. Hint: AI and machine learning are invaluable in helping map content to intent.

You’ll also have a chance to ask these industry heavyweights your own questions about brand building and making emotional connections.

It all takes place Wednesday, December 13 at 12 ET/9 PT.

Register for the event here.