Initially, the mighty merchant frowned on this type of advertising fearing it may clutter their site and alienate shoppers. However, they own 10.7% of the $191 billion US digital ad market today.
More and more people are bypassing Google and using Amazon as a search engine to find products. Today Google owns 28.8% of the market, down from 73.1% in 2019.
Amazon is taking ad business from Facebook too. In June, Apple introduced privacy changes on iPhones that have rendered Facebook & Instagram ads significantly less effective. The Apple feature known as App Tracking Transparency (ATT) forces developers to ask for consent before their apps can track users. Facebook launched an aggressive campaign against Apple claiming ATT will hurt the open internet and small businesses. Facebook is warning that customers who opt out of tracking will be excluded from specific targetable audiences, which will result in a decrease in audience sizes.
Many companies are reluctant to market on Amazon because they can lose the direct connection with their consumers. However, marketers are reporting significant declines in the performance of their Facebook ads which is sending big brands on the hunt for alternative options. As Amazon has an estimated 153 million Prime subscribers, it’s a platform that may be worth the risk.
Big brands are redirecting their digital ad budgets to other means of marketing that include incorporating social-media influencers and returning to more traditional channels like direct mail.
Direct mail has its own woes right now as postage and shipping rates are increasing at record levels, and paper shortages are causing the cost to implement direct mail campaigns to rise.