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Joe Swallen, director of research at Kantar, said that if Amazon became more and more of a product company, it also had to invest more in defense of its own territory, as Walmart, Target and Best Buy were intensifying the promotion of their products. e-commerce activities.
"Even with its mbadive customer base and dominant share of online sales, Amazon has to spend a lot of advertising to thwart the growing concentration of traditional retailers on e-commerce," he said.
A lot of that goes on TV. According to Kantar, Amazon spent 37% of its US advertising budget last year, or $ 679 million, on TV ads, up from 32% in 2015.
It's there that Amazon can reach a wider audience, even though targeting and measurement are less sophisticated than on digital channels, said Harikesh Nair, professor of marketing at Stanford University. .
"Television always offers great reach, making it a quick awareness tool," Nair said.
Promoting your brand across the United States is important because Amazon has spread to many areas, including hardware, groceries, and entertainment. Google, Microsoft, Walmart and Hulu are all competitors and are forcing Amazon to increase spending, said Carl Mela, professor of marketing at Duke University.
"Building market share in these markets requires considerable marketing investment," said Mela.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
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