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amazon ads: Amazon ads equals a minus for Google, Meta digital marketing reign

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amazon ads: Amazon ads equals a minus for Google, Meta digital marketing reign

For nearly a decade now, Google and Meta have enjoyed a duopoly in the digital advertising space in India, with almost a 90% share in what is pegged to be a Rs 70,000-crore market at present. Over the last couple of years though, Amazon Ads seems to be rapidly eating into their share of the digital pie, senior media buying executives told ET.

Advertisers, especially in categories such as consumer packaged goods as well as DTC (direct-to-consumer) brands, are moving as much as 15-20% of their advertising budget — previously dedicated to Google and Meta — towards the Seattle-based ecommerce giant’s ad tech suite.

In the US, platforms like Apple and TikTok, along with Amazon and Walmart in retail media, have shrunk Google and Meta’s share of digital ad dollars to less than 50% as of last year. With no TikTok back home and a single-digit percentage proliferation of Apple products to boot, Amazon Ads emerges as the single-biggest challenger to the duopoly in India.

In 2020, Amazon launched its global ‘demand-side platform’ (DSP) in India. Through Amazon DSP, advertisers can buy programmatic ads to reach new and existing audiences on and off Amazon. It combines data points from all its different properties, such as Prime Video, Fire TV, Kindle, Alexa, Audible, etc, to provide sharper audience segmentation.

“You can use it to create customer cohorts based on different spending sizes. Programmatic ads also prove more efficient and cost-effective compared to direct advertising/media-buying,” said Anil Pandit, senior vice-president at Publicis Media Services.

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Today, five to six of 10 media plans at Publicis Media have some form of Amazon Ads targeting. “In the last year and a half, our clientele’s spending on Amazon Ads has gone up by 8-10x,” Pandit said.

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Wavemaker, a GroupM company, now has an exclusive offering called Amazon Audience Galaxy, a planning stack for audience segmentation and cross-basket analysis. “For instance, it can give you data on what consumers bought last month across categories, or who are the people buying health products,” said Shekhar Banerjee, chief client officer and office head (west, north and east) at Wavemaker. “Map it out and you can market, say, sugar-free products to them. Refined data reduces noise. That’s a massive advantage and clients are lapping it up.”

With these developments, many industry experts reckon Amazon’s portion of the digital ad pie is likely to grow bigger in the next few years. Some homegrown DTC brands in the beauty and skincare segment are already spending 80% of their digital ad monies on Amazon, these executives added.

ET’s emailed queries to Google and Meta went unanswered. Amazon shared information on background.

How did we get here?

First, Amazon came for Google Search. The pandemic altered shopping habits and, according to a recent Counterpoint Research report, the number of people buying daily necessities online in India continues to grow. Therefore, “marketers realise that the only rival to Google search today is Amazon because people search on that platform with the intention to buy,” said Mayank Shah, senior category head of Parle Products.

While Parle Products doesn’t spend on Amazon Ads yet, a DTC brand it has invested in, called ASAP energy bars (part of WIMWI Foods), allocates ad monies towards Amazon Ads and has got a good response in terms of sales, said Shah. “If you’re a DTC consumer brand or selling inventory on Amazon already, it makes sense to spend on Amazon Ads,” he added.

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L’Oréal India started listing its brands on Amazon around 2016-17 and began with display ads. “Slowly, we moved on to spending on search ads, since Amazon is a discovery-driven platform. Their offering has evolved significantly over time,” said Saloni Shah Javeri, chief digital and marketing officer at L’Oréal India. In 2021, the company started exploring Amazon DSP.

“The bulk of advertiser spends on Amazon is on search ads,” said Gautam Mehra, cofounder and chief executive of ProfitWheel, a customer data-led marketing intelligence platform. “90% of ad spend on Amazon is on ‘sponsored’ product ads you see in every category. Folks running these ads are from the e-sales teams. They report to the sales head and not the CMO. So, it’s very retail-led.”

Traditionally, advertisers have used Google and Meta for ‘upper funnel’ marketing that builds brand awareness. But given the economic headwinds and intense competition in consumer goods categories, more and more advertisers today are focusing on lower funnel marketing that is more sales-oriented, yielding short-term results.

Consumer packaged goods that sell more on the marketplace require advertising solutions for the lower funnel, “therefore many of them are cutting budgets from the top funnel and putting them into the mid and lower funnel,” said Banerjee of Wavemaker. “When their marketing budgets go up, the bulk of the incremental money is going towards lower funnel advertising, too.”

Retail media (like Amazon) is able to provide transactional patterns of users, aiding in lower funnel marketing that drives purchases, said Pandit of Publicis Media. “It allows marketers to also close the funnel measurement loop to a large extent as they are able to track spending leading to sales, which is still the biggest challenge for them.”

Given the size of their social and messaging platforms like YouTube and WhatsApp, Google and Meta do provide a whole host of behavioural user data to advertisers. But they lag behind Amazon in providing user’s transactional patterns to advertisers. “Google takes you directly to the product site. Meta offers Instagram checkout in the US but that’s not available in India as yet. If a transaction starts happening on their payment gateways, it’ll close the loop on the transaction,” said Mehra of ProfitWheel.

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Going forward, “the ecommerce ecosystem as a whole could be a big threat to Google and Meta because neither of them has a marketplace equivalent,” said Banerjee of Wavemaker. “But you see them coming up with strategies to combat this threat. For instance, Facebook is tying up with smaller marketplaces now to strengthen its media buying offering.”

Homegrown ecommerce companies are also building a programmatic platform like Amazon DSP to grab their share of the ad dollars likely to go towards retail media in the next few years.

That said, not everyone needs to sell on the marketplace either. “So, sectors like realty, auto and BFSI don’t need to spend on Amazon Ads right now,” said Banerjee.

Further, “Amazon offers great consumer shopping signals but not at the scale that a Facebook, WhatsApp or YouTube can provide because of their much higher active user base,” said a digital marketing professional, requesting anonymity. “It’s also cheaper to target a much larger audience through Google and Meta because of their lower media-buying rates.”

Ultimately, “monies will always be deployed depending on a brand and business objectives,” said Javeri of L’Oréal India. “Our loyalties lie with the consumer. When a single platform will drive content discovery to product fulfilment within a native environment giving the best consumer experience, investments will move like this (snaps fingers).”

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Snapchat Explores New Messaging Retention Feature: A Game-Changer or Risky Move?

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Snapchat Explores New Messaging Retention Feature: A Game-Changer or Risky Move?

In a recent announcement, Snapchat revealed a groundbreaking update that challenges its traditional design ethos. The platform is experimenting with an option that allows users to defy the 24-hour auto-delete rule, a feature synonymous with Snapchat’s ephemeral messaging model.

The proposed change aims to introduce a “Never delete” option in messaging retention settings, aligning Snapchat more closely with conventional messaging apps. While this move may blur Snapchat’s distinctive selling point, Snap appears convinced of its necessity.

According to Snap, the decision stems from user feedback and a commitment to innovation based on user needs. The company aims to provide greater flexibility and control over conversations, catering to the preferences of its community.

Currently undergoing trials in select markets, the new feature empowers users to adjust retention settings on a conversation-by-conversation basis. Flexibility remains paramount, with participants able to modify settings within chats and receive in-chat notifications to ensure transparency.

Snapchat underscores that the default auto-delete feature will persist, reinforcing its design philosophy centered on ephemerality. However, with the app gaining traction as a primary messaging platform, the option offers users a means to preserve longer chat histories.

The update marks a pivotal moment for Snapchat, renowned for its disappearing message premise, especially popular among younger demographics. Retaining this focus has been pivotal to Snapchat’s identity, but the shift suggests a broader strategy aimed at diversifying its user base.

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This strategy may appeal particularly to older demographics, potentially extending Snapchat’s relevance as users age. By emulating features of conventional messaging platforms, Snapchat seeks to enhance its appeal and broaden its reach.

Yet, the introduction of message retention poses questions about Snapchat’s uniqueness. While addressing user demands, the risk of diluting Snapchat’s distinctiveness looms large.

As Snapchat ventures into uncharted territory, the outcome of this experiment remains uncertain. Will message retention propel Snapchat to new heights, or will it compromise the platform’s uniqueness?

Only time will tell.

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Catering to specific audience boosts your business, says accountant turned coach

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Catering to specific audience boosts your business, says accountant turned coach

While it is tempting to try to appeal to a broad audience, the founder of alcohol-free coaching service Just the Tonic, Sandra Parker, believes the best thing you can do for your business is focus on your niche. Here’s how she did just that.

When running a business, reaching out to as many clients as possible can be tempting. But it also risks making your marketing “too generic,” warns Sandra Parker, the founder of Just The Tonic Coaching.

“From the very start of my business, I knew exactly who I could help and who I couldn’t,” Parker told My Biggest Lessons.

Parker struggled with alcohol dependence as a young professional. Today, her business targets high-achieving individuals who face challenges similar to those she had early in her career.

“I understand their frustrations, I understand their fears, and I understand their coping mechanisms and the stories they’re telling themselves,” Parker said. “Because of that, I’m able to market very effectively, to speak in a language that they understand, and am able to reach them.” 

“I believe that it’s really important that you know exactly who your customer or your client is, and you target them, and you resist the temptation to make your marketing too generic to try and reach everyone,” she explained.

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“If you speak specifically to your target clients, you will reach them, and I believe that’s the way that you’re going to be more successful.

Watch the video for more of Sandra Parker’s biggest lessons.

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Instagram Tests Live-Stream Games to Enhance Engagement

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Instagram Tests Live-Stream Games to Enhance Engagement

Instagram’s testing out some new options to help spice up your live-streams in the app, with some live broadcasters now able to select a game that they can play with viewers in-stream.

As you can see in these example screens, posted by Ahmed Ghanem, some creators now have the option to play either “This or That”, a question and answer prompt that you can share with your viewers, or “Trivia”, to generate more engagement within your IG live-streams.

That could be a simple way to spark more conversation and interaction, which could then lead into further engagement opportunities from your live audience.

Meta’s been exploring more ways to make live-streaming a bigger consideration for IG creators, with a view to live-streams potentially catching on with more users.

That includes the gradual expansion of its “Stars” live-stream donation program, giving more creators in more regions a means to accept donations from live-stream viewers, while back in December, Instagram also added some new options to make it easier to go live using third-party tools via desktop PCs.

Live streaming has been a major shift in China, where shopping live-streams, in particular, have led to massive opportunities for streaming platforms. They haven’t caught on in the same way in Western regions, but as TikTok and YouTube look to push live-stream adoption, there is still a chance that they will become a much bigger element in future.

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Which is why IG is also trying to stay in touch, and add more ways for its creators to engage via streams. Live-stream games is another element within this, which could make this a better community-building, and potentially sales-driving option.

We’ve asked Instagram for more information on this test, and we’ll update this post if/when we hear back.

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