When big brands pay for placements, Amazon builds up ads in search results

Search for “toothpaste” Amazon, And at the top of the web page, you’ll see combinations of popular brands such as Colgate, Crest, and Sensodyne. A separate search for “deodorant” will first display secret, dub, and native products.

However, if you take a closer look, you’ll see that these lists are ads labeled “sponsored.” Amazon is generating a lot of revenue from top consumer brands, as getting a valuable placement on the largest e-commerce site involves price increases.

Jason Goldberg, Chief Strategy Officer for Advertising Agency Publicis, said:

For consumers looking for toothpaste on Amazon, you’ll need to swipe twice completely in the mobile app to get unpaid results.

Until recently, Amazon placed two or three sponsored products at the top of search results. Juozas Kaziukenas, who runs an e-commerce research firm, says that as many as six sponsored products are currently displayed in front of organic search results, with the potential for further promotions elsewhere on the page. Marketplace pulse..

The number of ads you see depends on your exact search terms and other factors, such as whether your users are shopping on the desktop, mobile, or Amazon apps.

Amazon doesn’t split advertising revenue, but advertising makes up the majority of the company’s “other” sales. This category was the fastest-growing part of Amazon’s overall business in the second quarter, with revenue jumping 87% year-over-year. Over $ 7.9 billion..

Amazon made a leap in 2018 Microsoft It will be the third largest advertising platform in the United States. Google When Facebook..Amazon Capitalized About managing its market, knowing that its website or app is where many consumers embark on their online shopping journey.

Kajiukenas said Amazon and its founder Jeff Bezos It has completely changed from anti-advertising. The more advertising “replaced most of the features of the site,” he said, the more lucrative the business became.

An Amazon spokeswoman said search results don’t have a dedicated ad slot, which means that users may show one ad, multiple ads, or not at all. According to the company, advertising is an optional service for brands and sellers, but it can be used to raise awareness of their products.

“Like all retailers, we design our stores so that our customers can easily find and find the right brand or product. Sponsored advertising is one of many ways to do this. That’s what the spokesperson said in an email. “In all cases, we come back from the link between the most useful customer experience and the surfaced results, regardless of how they are presented to shoppers.”

Leading consumer product manufacturers aren’t the only ones using the most valuable virtual real estate. Amazon also introduces its own products in search results. For example, a search for “shampoo” will show a promotion for Amazon-branded Solimo bottles before ads for products such as Pantene, Nexus, and L’Oreal.

According to digital marketing agencies, sponsored product advertising accounted for approximately 73% of retailer advertising spend on Amazon in the second quarter. Markle.. Last year, Amazon Exchange started Product recommendations on a list with product ads.

Amazon has also added new ad formats such as video ads and sponsored brand posts. In these formats, the banner at the top of the page displays a single brand and multiple product lists.

Intensified competition due to the rise of Amazon aggregator, A venture support company that raises a large amount of money from external investors to acquire an independent seller. Some small sellers are worried that they may not be able to compete with deep-pocket aggregators, which is causing them to “spend huge budgets on Amazon in the form of advertising,” Kajiukenas said.

“Because they compete with other smaller sellers, they now compete with larger, more well-funded sellers,” he said.

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