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Amazon is encouraging brands to increase their website advertising for next week's Prime Day, their annual sales event, which could give new impetus to the revenue streams that led the e-commerce group to competition with Google and Facebook, the forces that dominate digital advertising.
Vendors and consultants say that Amazon has advised merchants to double or even triple their overall advertising spend and the amount of money they offer for keywords. they want their products to be at the top of the research results.
With millions of Amazon Prime members slated to flood the site next Monday for discounts on products like Bluetooth speakers, analysts say its growing advertising business will be a winner with the main retail operation .
"Amazon is getting on a pay platform," says Roshan Varma, director of retail sales at AlixPartners. "This is not enough for sellers and brands to sell on Amazon. If you want to sell, you have to appear at the top of the list (in the product search results) and the only way to do that is to overcome the algorithm or pay for a sponsored product ad.
"Position it as if you had to keep your share of votes regardless of cost," said Mike Ziegler, former director of advertising for Amazon, who is now launching Marketplace Clicks, an agency that helps sellers to advertise on the e-commerce site.
Prime Day, created by Amazon in 2015, has quickly become one of the biggest growth and sales promoters of the company. Company prime More than 100 million people worldwide pay a subscription to receive free deliveries every month or every year, see streaming videos and music and more
Last year, Prime Day recorded the highest number of subscriptions since the launch of the premium service in 2005 and was the best selling day of the year. 39, business up to now, said Amazon. This year's event, which lasts 36 hours on July 16 and 17 and extends to offline trade with discounts on Whole Foods, the supermarket chain that Amazon has bought the year latest, sales are expected to increase 40%, from $ 2,400 million in 2017 to 3,400 million, according to Coresight Research.
The need to advertise others ahead of Prime Day highlights the growing contribution of advertising to Amazon Enterprises. While Amazon's core retail business generates the majority of its revenues, executives and analysts believe that advertising is a promising growth area. Its "other" revenue segment, primarily derived from advertising, more than doubled to $ 2 billion in the first quarter and the company marked high margin business as "strongly contributing to profitability." "
Amazon's share of the $ 100 billion digital advertising market is still very low: 2.7% or fifth place this year versus 37.2% and Facebook of 19, 6 percent, according to eMarketer, is expected to reach 4.5 percent by 2020, surpass Verizon's Microsoft and Oath, and rank third, as Google and Facebook lose ground.
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