Retailers are having to spend more with Amazon in a bid to push sponsored product ads effectively and get their results displayed more prominently, new research has claimed.
Consumers searching for products on Amazon are being delivered an increasing number of sponsored results. This, in turn, is pushing organic listings further down the page according to digital marketing agency Merkle.
Retailers wanting to get a piece of the action on the search pages within the e-commerce giant's site are seeing advertising prices rise as a result. Merkle has found that sponsored product ads have accounted for nearly three quarters of retailers advertising spend for the second quarter of this year.
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Where once, if you were searching for a product, you’d get around three sponsored product ads at the top followed by a selection of organic results, today those non-paid for results are getting pushed farther down the results page. Regular users of Amazon might have already noticed how they now get around a handful of sponsored ad placings for products, requiring more scrolling down the page in order to see regular results.
The advertising push doesn’t stop there either. E-commerce research business Marketplace Pulse has identified other supporting sponsored ad places appearing elsewhere on the results page.
What consumers actually see when they get their search results returned can be dictated by other contributing factors too, such as the type of browsing they’re doing. Desktop, mobile or searching via the Amazon app all deliver tailored ad results, while the search term can also affect what a consumer is served up.
Amazon’s e-commerce strategy is clearly working with money from advertising helping to make it the fastest growing area of revenue generation, up 87% year on year for the second quarter of 2021. That’s added over $7.9 billion to Amazon’s coffers, allowing the e-commerce company to become the third largest advertising platform in the US behind Google and Facebook.
While the figures are obviously good for business over at Amazon, company owners who want to capitalize on the growing appeal of e-commerce to consumers are faced with higher costs if they want to be seen. Cost-per-click Amazon search advertising has risen rapid, up from just 86 cents last year and hitting $1.27 in August, according to research carried out by agency Canopy Management.
Businesses who don’t, or can’t afford to stump up rising sums of money for sponsored product ads are increasingly finding themselves buried further down the results page. On top of that, e-commerce retailers are having to find extra cash for transaction fees and fulfillment services, all of which could ultimately mean price rises will be passed on to consumers.
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- Via: CNBC