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Is Amazon Ads the next AWS?
I recently read an expert call with some interesting insights into $AMZN Ads.
The expert call can be found on Alphasense, where there's a library of more than 20k calls to give you insight about a wide variety of publicly traded companies. You can enjoy a 2-week free trial (no credit card required) during which you can download as many calls as you want. Sign up with the link below!
Let's go over some highlights!
Ads help launches in Amazon be successful. This expert said that within 3 months they managed to scale their business to $10 million. It was all thanks to Amazon Ads.
Ad reliance went down once they gained reputation
There's a lot of innovation going on on Amazon Ads
3 years ago, Amazon Ads was 10 years behind Google Ads in terms of functionality
Today, Amazon Ads is 3 years behind Google Ads
In 1-2 years, Amazon Ads will probably catch up with Google Ads
The first component where Amazon is behind Google is marketing capabilities.
According to the expert, it'll take Amazon around a year or two to come out with a close comparable:
Ads in Amazon have gotten increasingly expensive but intent is what drives this cost and why it makes it "cheap"
"If someone's searching for a winter coat on Google, they probably want to buy a winter coat, but on Amazon, if they're searching, they really want to buy a winter coat."
"Best seller" badges can be influenced with Ads, but they are given out based on sales velocity
If your conversion rate and your sales are very high you might end up with a Best Seller badge which will boost your sales further
Digital Ads are somewhat cyclical because advertisers are trying to protect ROAS, which is calculated at sales per click / cost per click.
If sales per click goes down during a recession, you have to lower CPC to stay even in ROAS
The expert also believes there will be a shakeout of smaller sellers at some point because Amazon is getting increasingly competitive as a marketplace
As long as the company keeps launching innovations, Ad spend will most likely go up
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