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What’s your Amazon strategy?: Breaking silos and brand new budgets

In Hawaii, there’s a fencing school called World Domination, Inc., where students learn all the sword-wielding skills of an ancient Renaissance Man in the shadow of Oahu’s mossy craters. Google “world domination company” and that company’s LinkedIn page is the second hit.

What’s the first? An article about Amazon’s second headquarters, naturally. Amazon and its founder, Jeff Bezos, are regularly and unironically equated with world domination and yet, there are still marketers who haven’t made it part of their marketing plan.

Surveying 250 B2C marketers and 1,600 consumers in the U.S. for The Age of Amazon: Maximizing the B2C Marketing Opportunity, in partnership with Catalyst, part of GroupM, ClickZ Intelligence found that only 17% of respondents have an Amazon strategy in place.

A brand new budget

Only 31% of respondents are currently advertising on Amazon, compared with 69% using Google and 74% using Facebook. Of those who aren’t, almost two-thirds either don’t think it’s relevant for their particular businesses or don’t realize there’s an opportunity. An additional 11% are planning to spend money on Amazon and 7% are interested but don’t know how.

While those with a developed Amazon strategy are in the minority, they won’t be for long. Sixty-three percent of respondents plan to increase Amazon budget over the next year, compared with 54% and 53% who plan to do the same with Google and Facebook, respectively. Just 1% intends to decrease their budget.

“Amazon is taking its share of dollar from other channels, but what is happening now is that brands are looking at the overall marketing and advertising picture and increasingly treating this as incremental,” says Todd Szahun, Geometry North America’s Head of Digital and the eCommerce Lead with WPP’s Data Alliance.

Where is this incremental budget coming from? Though some marketers are simply reallocating portions of their Google and Bing budgets over to Amazon, it’s far more complicated than that overall. More than 40% of respondents have created an entirely new budget for Amazon, with an additional 20% partially doing so.

That new allowance can mean anything from customer development funds being reclassified as media spend to trade budgets paying for ancillary activities, such as supporting Subscribe & Save offers through Amazon Prime.

Who owns the Amazon strategy?

One interviewee compared Amazon strategies to the flexible, traditional shopper marketing budgets, while another referred to the ecommerce juggernaut as a “multi-headed beast” that requires dedicated resources.

“I don’t know if there is any one group or brand that has solved the riddle of Amazon,” says Chris Humber, Head of Search at GroupM/Catalyst. “We are starting to see a lot of the right questions being asked, and dots being connected. But it still feels very disparate.”

Amazon has three main ad products—cost-per-click ads that appear on certain pages or positions, or alongside search results—and 61% of the time, they are the responsibility of the digital marketing and ad buying teams. Other departments that may own the Amazon strategy include ecommerce, product, search, merchandising and supply chain management.

The numbers shift for product listing pages, which digital marketing and ad buying teams are only responsible for 37% of the time, which suggests a siloed relationship between paid and organic search activities. However, 60% of respondents agreed that there is an internal cooperation between the different teams.

Other facets of the Amazon strategy have far less disagreement. Seventy-one percent of respondents optimize their product listing pages for organic search and even more buy paid media on Amazon in-house, as opposed to utilizing a media agency or digital performance agency.

The companies most likely to succeed against Amazon are those with a holistic approach, according to Daanish Chishti, Group Director of Search and Social for Mindshare North America.

“They have a view of where the money is best spent and what will have the greatest impact on the business,” he says. “The more you put your media in silos, the more you are putting yourself at a disadvantage.”

Watch the on-demand Age of Amazon webinar to learn more about the research findings and best practice for Amazon Marketing Services, or download the full report here to see the 12 key recommendations for optimizing your Amazon strategy and programs.

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