You’ve just come home from the gym and discovered that your teenager cleaned out your stash of energy bars. Drat. You grab a peanut butter and jelly sandwich to ease the hunger pangs, then decide to avoid future deprivation by ordering a new supply of bars online.
You usually buy Clif Bars, so you type the brand name into Amazon search and start to place an order — but just as you’re about to click the “Buy Now” button, you notice an ad for Quest Nutrition bars at the top of the search page, tempting you with a compelling alternative. The bars look appetizing, they get multiple-star customer reviews and — best of all — you can get them at a bargain price. One click later, Quest has acquired your business from the folks over at Clif Bar.
In a dynamic marketplace like Amazon, where an astonishing
50 percent of all e-commerce transactions now occur, this type of last-minute product switch is there for the taking. Amazon gives advertisers the ability to offer real-time promotions, targeted discounts, and highlighted customer reviews that can be highly effective in persuading shoppers to choose alternative products at the last phase of the purchase funnel.
Snatching a sale directly away from the competition is every marketer’s dream. If the buyer goes on to make a long-term switch to the new brand, the company has pulled off a marketing coup. Multiply that by thousands of customers, and the result is a shift in actual market share.
This is what commonly is known as “conquest advertising.” Amazon has developed uniquely powerful tools that brands can use toward that end — and not just when customers are about to buy a particular product. These real-time advertising vehicles can encourage dramatic shifts toward established brands or aggressive newcomers alike. It all depends on who best takes advantage of Amazon’s powerful ad capabilities.
Rising to the Top
Some customers go to Amazon in search of a familiar brand while remaining open to other possibilities. A bigger proportion of shoppers are even more open to persuasion, since they increasingly use the marketplace to research and compare prices by category, searching for terms like “garden hose,” rather than brand.
More than 46 percent of consumers
begin their online product searches on Amazon, compared with 34 percent who start with Google, according to eMarketer. Brands can configure their Amazon ads to appear when customers search for similar products. More broadly, they can set their ads to appear when people search within a given category for any product.
For example, when users search Amazon for “laptop computers on sale,” they find not only images of the familiar and relatively expensive Apple machines, but also listings for Lenovo and HP models that get strong customer reviews and can be ordered for less than half the Apple price.
Type “women’s jeans size 10” into the Amazon search engine, and Levi’s Signature jeans appear at the top of the organic results. Right above them, consumers see an across-the-screen “sponsored brand” ad for “comfortable and stylish stretch jeans” sold by Pajama Jeans — including a competitive price and hundreds of positive reviews from consumers. Even a loyal Levi’s customer may be tempted to try them on for size.
For popular unbranded terms in competitive categories, like women’s apparel, these top of the page “sponsored brands” units are highly competitive because they expose users to relevant brands or products right at the top of the page — before even organic results. This is incredibly useful for newer brands or established ones looking to defend their turf.
A Last-Minute Redirect
For marketers, there’s nothing more rewarding than luring a customer away from a competitor at the last minute. Amazon makes this strategy possible by giving the option of running targeted ads that offer customers a glimpse of an alternative product just before they check out.
For example, a customer about to take the final steps toward buying a Little Tikes toy kitchen set might see an ad for Melissa & Doug’s “Chef’s Pretend Play Toy Kitchen” appear on the same page. A well-timed ad promoting an option with 4.5-star reviews and a lower price can shift the sale in less time than it takes to click a mouse, one of the reasons Melissa & Doug’s popularity has soared in recent years among parents eager to find a low-tech way to fire their children’s imaginations.
Most shoppers don’t come to Amazon committed to a particular brand. Eighty percent of respondents use Amazon
to discover new products or brands, according to Bobby Agarwal, Amazon Advertising’s product lead. These customers aren’t just open to alternatives; they are actively seeking items that are cheaper or better quality than the ones they find in brick-and-mortar stores or other online destinations.
Many Amazon customers keep their options open until the moment they are about to purchase. That’s why they begin on Amazon rather than on a brand’s proprietary website. It’s also why conquest advertising is a particularly fruitful strategy on Amazon.
Even if shoppers find what they want on a brand’s site, an astounding 90 percent of them
compare prices with a visit to Amazon, according to a BloomReach survey quoted by CNBC. It’s never too late for a good deal — especially one that beckons at the last moment.
Advertising Across the Internet
If you’ve ever shopped online for a pair of running sneakers during lunch and then noticed ads for Nike and Adidas popping up on almost every site you visit, you’re not alone. While retargeted ads themselves are an established tactic, an increasing number of e-commerce retailers are using this targeted advertising tactic within Amazon, allowing them to reach consumers even before they’ve arrived at the checkout line.
It’s no secret that Amazon owns increasingly large volumes of data on product searches and customer transactions. Advertisers can use that to their advantage by targeting ads to Amazon users who have searched for certain products or who, better yet, previously bought from competitors.
For example, fitness accessory company Yogaland might zero in on Amazon users who have searched for, or once purchased, yoga mats. Or the brand might take that tactic a step further and target shoppers who have purchased or researched products made by its competitor, Gaiam.
Many direct-to-consumer startups have built significant market share, thanks in part to these types of Amazon advertising strategies — approaches that allow them to put their relatively unknown brands in front of customers who are more concerned with value and reviews than name recognition.
Many customers now actively search for products that match their expectations and price points, and they’re no longer afraid to take chances on lesser-known brands. Amazon has helped them find great products in the past, so they continue to trust what they see on the site.
That openness in terms of brand preference will only grow in coming years, especially as Gen Z shoppers — digital natives who have grown up with phones in their hands and the Web as their shopping mall — build careers and buying power.
In an increasingly competitive e-commerce environment, companies that take advantage of Amazon’s tools and data can anticipate when and how to get customers’ attention. This takes both the marketers’ ability to identify trends and opportunities, and a degree of organizational agility to act on them quickly and effectively. Brands that can execute here more often will move to the front of the checkout line, and better position themselves for the future of shopping.