Uncover the secret to Amazon’s 500 million dollar advertising play and take your own advertising game to the next level.

27 Jun 2022 | Sales & Marketing

About the author

Hooshang Bakht

Brego Business was started with a mission to make entrepreneurship easy. Our goal is to help business owners grow and scale without having to deal with the day-to-day stress of running a business. We specialize in providing services that help business owners grow their businesses, including search engine marketing (SEM), social media marketing (SMM), LinkedIn marketing, video production, accounts receivable (AR), accounts payable (AP), internal audit, VCFO, and recruitment. We have helped more than 500 brands grow their businesses. We work closely with the clients to understand their unique needs and develop customized strategies that deliver measurable results.

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google vs amazon

As we all know there has been a boom in D2C startups in the past few years brands like Dr. Vaidyas, Mcaffiene, My Glamm, and many more have scaled from small house brands to brands with large valuations claiming billions in venture capital funding.

But there’s one thing common amongst all of these D2C conglomerates – the fact that they advertise on Google and Meta (formerly known as Facebook) to drive awareness and growth. However, in the recent years there has been a major shift from these platforms to Amazon

Amazon as we know it – is one of the largest ecommerce marketplaces in the world and they have data – A lot of data. Overall Amazon has 300 million active users (to put it into perspective that’s twice the population of Russia!) So how do they plan on using this large base of data?

Well to start off in 2012 Amazon started allowing their listed sellers to run advertisements on their website and app. However these were primarily in the form of banners on their homepage. With Digital Advertising Spends set to grow significantly over the next few years ( today it is estimated to be a whopping amount of 455.3 billion US dollar in 2021) Amazon started focusing on allowing their sellers to target prospective customers via various forms of advertising on their platform.

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Since the beginning – Google and Facebook have dominated the Digital Spend market share with a cumulative total of owning 35% of all digital spends in 2020. This equals to a total of 160 billion dollars in revenue. They’re closely followed by smaller players like Albaba and Tik Tok who are at about 8% of the entire market share. A chart below shows the current global ad spend and market share holders

Amazon works on the same pay-per-click model as Google with one massive difference their users are already on the app to shop

So let’s dive into Amazons new interest in capturing the Digital Advertising space and see why they are growing at a fast pace in India

According to recent estimates, India’s digital ad spend is expected to grow 20%, and Amazon is projected to control around 20% of India’s digital advertising market share, with a revenue of $500 million. This is due to the fact that Amazon is currently the 3rd most visited website in India, after Google and Youtube. Compared to Google and Meta, Amazon has its own user base, which provides a higher level of accuracy in tracking and targeting the right audience for Amazon SEM advertising.

When running advertisements on both Google and Amazon, Amazon’s unique user base and ownership of the entire purchase funnel means that sellers have access to customers with a higher intent to purchase, resulting in a higher return on investment for advertisers. With the increase in online purchases from Tier 2 and Tier 3 cities in India, Amazon has become one of the primary platforms used for purchasing, allowing sellers to gain access to an even larger market for Amazon SEM advertising.

So how does Amazon Advertising work?

Amazon SEM Advertising works in a pretty similar fashion to Google. Bids are made on keywords that are related, in the same category or are similar to your brand and product and when a user searches for that keyword your product shows in specific places on the Amazon application/browser basis the amount that you are willing to bid vs. your competitors. There are multiple permutations and combinations that can help you get a higher return on your investment however you would rather leave that to the experts in Amazon SEM Advertising.

Here are the type of Amazon Placements you could bid for –

1. Home Screen Display

Usually one of the most expensive placements in Amazon, your product is usually shown on the top banner or other smaller banners on the home page.

2. Sponsored Brand Placement

Generally when you outbid your competitor by bidding higher for specific keywords/ terms Amazon tends to showcase your brand page at the head of the search page. This allows customers to see your brand during the initial search which can over all increase awareness. An image below shows where your brand will be showcased when you get a Sponsored Brand Placement

Quick Tip: Being able to rank or showcase your brand page at the top of the search page for certain keywords can create massive brand awareness which in the long run will increase conversions amongst

3. Sponsored Product Placement

This is the most common placement on Amazon Ads usually present right under the brand placement mentioned above. Here customers can interact and go to your product page

Quick Tip: It is always advisable to run campaigns with competitors keywords here so that you can rank under their brand page showcasing your product and moving the customer to your product page

4. Sponsored Brand Videos

Video advertisements can be a great way to showcase your brand, especially when it comes to amazon digital brand advertising. Amazon offers the option to display video advertisements after the initial scroll, which can be a great mechanism for creating brand awareness and encouraging user interaction. Brand videos usually attract more interest, making them an ideal way to showcase your products or services. With the increasing popularity of video content, it’s no surprise that many businesses are turning to amazon digital brand advertising to reach their target audience. By utilizing this platform, businesses can take advantage of the video advertising feature and create compelling ads that will grab the attention of potential customers. With the right strategy, businesses can use amazon digital brand advertising to significantly increase their brand recognition and drive more sales.

5. Sponsored Display Advertisements

When you move to the product page usually there are various products that are seen over, next to and under the main product already displayed this placement can allow you to do the following

  • Cross sell multiple related products that can be sold along with your product
  • This can also be used to showcase your products that are related to that product page. For eg. if you are selling Iphone covers you can run this advertisement to complement the main Iphone page
  • Run ads on your competitors product page so as to create easily comparison on price and other features

Quick Tip: There are tools like Helium 10 that you can use to ascertain which of your competitors and their product pages are getting the most views/ traffic and manually bid for those keywords

When it comes to amazon digital brand advertising, there are a few indicators that point towards Amazon eating Google & Meta’s market share in digital advertising spend. Amazon’s growing dominance in the e-commerce market and its ability to offer targeted ads to a highly engaged audience could potentially give it an edge over other advertising platforms. However, there is one factor that might be Amazon’s ultimate downfall in the digital advertising game. The fact that Amazon can only run advertisements for products that are listed on their platform limits the scope of their advertising offering. Additionally, Amazon takes a commission off each sale, which may not be feasible for some D2C brands in terms of profitability. This could lead to these brands focusing more on other advertising platforms rather than solely relying on Amazon digital brand advertising to increase their overall reach and profitability.

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Frequently asked questions

What is Amazon SEM advertising, and how does it work?

Amazon SEM advertising is a form of advertising that helps promote your products on Amazon. It works by placing your product in front of customers who are searching for related keywords.

How can Amazon SEM advertising help my business?

Amazon SEM advertising can help increase your product visibility, drive sales, and improve your Amazon ranking.

What is Amazon digital brand advertising, and how is it different from Amazon SEM advertising?

Amazon digital brand advertising is a form of advertising that helps promote your brand and product line on Amazon. It is different from Amazon SEM advertising in that it focuses on building brand awareness rather than driving sales.

Can I target specific audiences with Amazon digital brand advertising?

Yes, you can target specific audiences with Amazon digital brand advertising based on factors such as age, gender, interests, and shopping behavior.

What is Amazon product placement, and how can it benefit my business?

Amazon product placement is a form of advertising that helps promote your products by featuring them in Amazon's product recommendations and search results. It can benefit your business by increasing your product visibility and driving sales.

What is Amazon digital media advertising, and how does it work?

Amazon digital media advertising is a form of advertising that helps promote your products and brand off of Amazon's platform. It works by displaying your ads on other websites, social media platforms, and mobile apps.

How can I measure the success of my Amazon advertising campaigns?

You can measure the success of your Amazon advertising campaigns by tracking metrics such as click-through rates, conversion rates, and return on investment.

Are there any best practices I should follow when creating Amazon advertising campaigns?

Yes, some best practices to follow when creating Amazon advertising campaigns include targeting specific audiences, using high-quality images and videos, and incorporating relevant keywords.

Can I advertise on Amazon if I'm not a registered seller?

No, you must be a registered seller on Amazon to advertise your products on the platform.

Can I use Amazon advertising to promote my business globally?

Yes, Amazon advertising allows you to promote your products and brand globally, depending on the markets where Amazon is available.