Amazon is giving the duopoly that is Google and Facebook a run for its money when it comes to digital ad spend, though it has plenty of catching up to do. Yet retail advertisers are starting to allocate more of their ad budgets to Amazon, according to a recent survey [download page] from Nanigans.
Currently, respondents (marketers at large retailers with at least $100 million in annual online revenues) estimate that Amazon receives 14% of their digital ad budgets, with Google receiving 21% and Facebook/Instagram receiving 19%. Half of the marketers surveyed reported that, within the next year, they intend to increase their ad spend on Amazon, by an average of 25%.
It’s no wonder Amazon is gaining on Google and Facebook. Advertisers are seeing success in meeting their KPIs with the e-commerce behemoth’s platform. Nearly 40% of advertisers felt that Amazon had a better ROAS that Google and Facebook.
Additionally, respondents were more likely to feel that Amazon was better than worse than its competitors at attribution, campaign management, and CPMs (32%).
Research from Third Door Media has shown that 46% of marketers and advertisers surveyed felt their top challenge with advertising on Amazon was inaccurate reporting. However, nearly 3 in 10 advertisers from Nanigans’ survey felt that reporting on Amazon was better than it is on Google and Facebook.
While advertisers are allocating ad spend to Amazon because of its strong performance and ROI, the size of the available audience and access to retailers’ target audiences, retailers still have some trepidations.
Four in 10 of marketers are concerned that Amazon has too much of their data and about 3 in 5 (57%) believe that Amazon will follow the trend of other large advertisers and misuse customer data.
Another issue, for about one-third of respondents, is that Amazon’s retail business is in competition to their own. In fact, three-quarters of marketers would like the ability for Amazon ads to link to their own sites instead of linking to Amazon.com.
About the Data: Nanigans partnered with Advertiser Perceptions to survey 100 advertising executives at large US retailers in November and December 2018. All retailers surveyed generate annual online sales of $100M-$200M (60%) or $200M+ (40%).