& Social Responsibility
Move over Google and Facebook, Amazon is looking to move into the third largest advertiser in the market. While it will take Amazon a long while to even consider matching Google and Facebook, it should not take them long to get to obtain the number three spot; passing Microsoft and Yahoo. (Sheehan, 2018) Amazon’s advertising strategy and objective are fairly simple; use their massive audience size to win advertisement deals from large companies such as Proctor and Gamble and Verizon. The how and when are also elementary since Amazon already knows their customers’ actual purchasing behaviors.
Previously, Jeff Bezos has sacrificed profit for growth, however, now Amazon is turning their attention to an opportunity that could generate consistent and healthy returns; advertising. Over the past several years, Bezos & Co. have been quietly putting together the pieces for a marketing platform that allows Amazon make money from the sheer size of its audience. (MacGregor, 2018) Typically, Amazon kept advertising on the site subtle, however, the e-commerce giant has been slowly giving more prominent placement to sponsored products in search results, forcing brands to buy ads to win top billing. By 2021, advertising on websites and mobile devices will account for half of all ad spending in the U.S., capturing greater share than television, radio, newspapers and billboards combined, according to eMarketer. (MacGregor, 2018)
According to EMarketer, compared with Google’s $35 billion and Facebook’s $17.4 billion, Amazon has a tiny advertising business that last year generated $1.7 billion in revenue. But it’s growing quickly because companies like Procter ; Gamble and Mondelez see Amazon as the place to win the “digital shelf” in the same way they fought to win the physical shelf in supermarkets. (MacGregor, 2018) Nicole Perrin, analyst at eMarketer, said:
“The Amazon audience is ready to buy, and they buy a lot, and over time they buy more and more frequently … and for Prime users it’s basically even more so. And the Prime audience itself continues to grow.” (Sheehan,2018)
Accordingly, the marketing world is facing a perfect storm: a company that is right down at the very bottom of the purchase funnel that is growing by leaps and bounds. It’s also one that’s becoming the habitual buying platform for an exceptionally large group of consumers, that is being turbo-charged by Amazon Prime.(Sheehan, 2018) In addition, Amazon has an advertising platform no other company can match; a web store combined with a streaming entertainment service and a trove of data about customer preferences. And as more people shop on smartphones, they’re skipping search engines like Google for Amazon’s mobile app.(MacGregor, 2018) Furthermore, Amazon is pushing beyond the sponsored search results and display ads that are the bulk of its ad business. The company is more aggressively selling itself as a lifestyle media brand that influences purchasing decisions elsewhere, similar to magazine advertisements or billboards, the people said. It is increasing its investment in a data team tasked with measuring how advertisements on Amazon generate sales beyond Amazon. (MacGregor, 2018)
Advertisers are paying attention. In the same way brands pressed their ad agencies a few years ago to devise plans to get the best bang for the ad buck with Google and Facebook, they’re now demanding an “Amazon strategy.” In negotiations with advertisers, Amazon bills itself as a better advertising investment than Google’s search engine and Facebook’s social media platform since people on Amazon are looking to buy. (MacGregor, 2018)
What does it mean to sponsor an event? Sponsors offer funding, products, or services to support events such as trade shows, teams, nonprofits, or organizations. In exchange, the company connects with potential customers and further exposure to existing customers. Event sponsorships are simply another tool in a company’s marketing toolbox. Like most marketing tools, event sponsorships are all about image. Creating an image of success and authority for your business is a smart way to win more customers. People are comfortable doing business with companies they trust to meet their expectations. If a business looks profitable, customers believe it can deliver what they need.
While one would have been living under a rock in 2018 to have not heard about Amazon, event sponsorships, especially of the social persuasion, are still large scale, real time advertising. Amazon typically sponsors tech type events and sellers’ conferences, 2018 could see the internet behemoth hosting more social events like 2018 Oktoberfest Zincinnati in Cincinnati, Ohio. This is most likely due to the fact that Amazon is one of the area’s largest employers with more than 3,000 workers at its fulfillment center in Hebron.
“Cincinnati is fortunate to have two great community supporters as presenting sponsors for 2018’s Oktoberfest Zinzinnati,” said Cynthia Oxley, director of the festival.
“Sam Adams, brewed in Cincinnati, is returning for its 11th year as presenting sponsor, and we’re thrilled to welcome Amazon, a company bringing thousands of jobs and investing in our region.” (Tucker, 2018)
Oktoberfest, the weeks long German celebration dating back to the 1800s, is formally held in Munich from mid- to late-September to early October. The 2018 Oktoberfest Zinzinnati was held in downtown Cincinnati from Sept. 21 through Sept. 23. Last year, the event attracted a record crowd of about 675,000, according to festival organizers. (Tucker, 2018) That’s a lot of concentrated advertising. Additional social event sponsorships that would be in Amazon’s best interest, would be marathons, music festivals, and more regional area events where the company has started their Prime Now services.
While no one would wish tragic or natural disasters on anyone, these are also ‘events’ that large companies leverage as sponsorships. After Hurricane Katrina left New Orleans completely devastated, Tide quickly set about their “Loads of Hope” campaign that now travels all over the country after natural disasters and almost certainly has won lifelong customers. In 2017, Budweiser halted its normal brewing and bottling processes to send more than 150,000 cans of emergency water after Harvey flooded most of Texas and Louisiana. (Lapin, 2017) With Amazon’s recent foray into the grocery industry these are opportunities that the company should always keep in mind.
Lapin, T. (2017, August 29). Anheuser-Busch pauses making beer to send water to Harvey victims. Retrieved from https://nypost.com/2017/08/29/anheuser-busch-pauses-making-beer-to-send-water-to-harvey-victims/
MacGregor, L. (2018, January 18). Amazon Has a Plan to Become Profitable. It’s Called Advertising. Retrieved from https://adage.com/article/digital/amazon-a-plan-profitable-advertising/311992/
Sheehan, B. (2018, February 02). The Key to a Winning Amazon Ad Strategy? Go Big Everywhere Else. Retrieved from https://www.adweek.com/brand-marketing/the-key-to-a-winning-amazon-ad-strategy-go-big-everywhere-else/
Tucker, R. (2018, September 13). Get Your Lederhosen Here: Amazon signs on as presenting sponsor for 2018 Oktoberfest Zincinnati. Retrieved from https://www.cincinnati.com/story/money/2018/09/12/amazon-sponsor-2018-oktoberfest-zincinnati/1277317002/