Recently Liz noticed two articles pointing out the growing dominance of Amazon. They’re hosting your website, putting out news (Washington Post), have a contract w the FBI for facial recognition services, deliver your groceries, create tv shows & films and so much more. Today Liz goes over all of this & discusses what it may mean for your small business.
Liz mentions two stories in the podcast:
– Amazon, With Little Fanfare, Emerges as an Advertising Giant
– New Parents Complain Amazon Baby-Registry Ads Are Deceptive
Amazon Is Everywhere
Sandro: [00:00:03] Welcome to Liz & Sandro’s Marketing Podcast. We’re the podcast that talks social media, reputation management, SEO, websites and so much more. Happy 2019. Thanks for being a part of our show. Today Liz’s topic is a pretty big one. It’s Amazon is everywhere.
Liz: [00:00:21] That’s right they are. So let’s first chat about Amazon and their advertising. For some perspective, Amazon is currently number three in the digital ad market behind Google and Facebook. But their revenue is on pace to double this year to, let’s see, eMarketer is estimating it to double to five point eighty three billion. I’ve read several articles in The Wall Street Journal about some of the things they’re doing in the past several months. And one of them was pretty interesting to me.
Amazon Deceptive Baby Ads?
Liz: [00:00:51] Basically they are selling ad space in baby registries. Which sounds harmless except a lot of new moms are getting products in the mail that they didn’t register for because these ads look so similar to all of the other products in the baby registry. So Amazon has been taking some heat for this. Some new moms have been pretty, pretty unhappy. This article which we will include in the show notes, it shared some great insight. It actually answered some kind of lingering questions for me. It really confirmed that their advertising model is very different from the self serve model of Facebook and Google. They are clearly partnering with big brands that are coming to the table with fairly substantial budgets.
Liz: [00:01:39] Back in I think it was 2017. Yeah 2017 seems so long ago. We had a client who suddenly, their ad stopped appearing on Amazon and when we searched and searched and I called a lot of my ad reps trying to get some answers. And we got very little insight other than that “well Amazon’s overhauling you know how they’re gonna be doing advertising and how they partner with with clients.”
Liz: [00:02:02] And so this this really kind of confirmed again that they are partnering with brands that come to the table with a pretty substantial budget. The article said that placements in the baby registries are going for $500,000 a quarter. And that’s in addition to ad spends that range anywhere from a half a million to three million. So again these are pretty big consumer brands that are partnering with Amazon. Interesting feedback that we got there from the Wall Street Journal again would link those articles for you in the show notes.
Facebook Knows What We Talk About. Google Knows What We’re Searching For. Amazon Knows What We Buy.
Liz: [00:02:38] Something else that I’ve observed and one thing that’s been a little frustrating to me as a, as I here and I see articles really harping on Facebook and Google. I think people are completely missing what Amazon is doing.
Liz: [00:02:51] Facebook knows what we talk about. Google knows what we’re looking for. But Amazon knows what we’re actually purchasing. And I might argue that that’s the most powerful data of them all.
Sandro: [00:03:01] Yeah because you’re voting with your wallet there.
Liz: [00:03:03] Definitely. But I do think this is changing. I do think consumers are starting to pay a little bit more attention to everything that Amazon is doing. I was chatting with someone over the holidays some, one of my husband’s co-workers. And he said he will not buy anything from Amazon. He will not support them. Of course he was joking that he’s still pulling Amazon packages off his front porch because his wife has a Prime account and she does a lot of the shopping through Amazon. But he will not, he will not support them. So I’m, I’m sensing that more and more consumers are making note of this. I think they’re becoming more aware of just how big Amazon is and where they are. And we’ll see what comes of that. I mean they’re not going to stop growing, but they really are everywhere.
Amazon Entertainment & Facial Rekognition
Sandro: [00:03:50] Agreed. I know one of my favorite podcasts Homecoming, it’s a fictional story and they were suddenly selling it to TV shows and Netflix. And who was the biggest bid? It was Amazon. Amazon’s buying more and more original content. They’re making movies. They’re making TV shows. The FBI is using their Amazon Rekognition. ReKognition with a K, for sifting through mountains of video surveillance footage with the FBI to look through, for facial recognition software. The FBI is paying them for that. And they own the Washington Post.
Liz: [00:04:21] They do.
Amazon Hosts Your Website
Sandro: [00:04:22] Amazon Web services. So they know what’s hosted, what your website is because you’re hosting it on their Web site. And also of course, now advertising 9 percent of all businesses are advertising on Amazon. We’re going to be doing a prediction show, we’re talking predictions soon but that’s going to go up obviously.
Liz: [00:04:39] Yeah. And also an interesting conversation I had because I did have a client bring up Amazon and just you know what could we do there. They’re a service based business. And we were kind of chatting and it took me a minute to get what they were asking, but I don’t know what they’ve read or where they’re getting some of their information. But they had an interesting thought, like you know what if our service could be purchased on Amazon and we go deliver it to the client? Well I never actually, never thought of that. So I have a note down. I just spoke to them a couple days ago so I’m going to look into that a little bit but it’s an interesting concept.
More Whole Foods – 2 Hour Delivery
Sandro: [00:05:17] It kind of goes along with the fact that they’re doubling or tripling the number of Whole Foods because they want to be able to deliver groceries within two hours to a big chunk of the country. It’s amazing.
Liz: [00:05:26] It is. And again they’ve taken a different approach to their advertising so I don’t know that, how friendly it’s going to be to a lot of the smaller businesses that Sandro and I consult with. But I think again I think it’s something to keep tabs on. Just personally you should know what’s going on in the in the ad world and see what you might be able to use for your own business.
Selling on Amazon
Liz: [00:05:48] One last thought. A couple months ago I sat down with an affiliate marketer here in Cleveland. He was walking me through a couple of things that he does for his clients that I don’t do a ton of. So it was good info for me to have. And one of his clients they sell a lot of product on their own Web site directly to customers. But they also have an Amazon, an Amazon web store. They’re selling products through Amazon as well. Just as another way to get out there, you know to reach the customer. They do take a hit because Amazon does some of their, I think they do some of their fulfillment for them.
Liz: [00:06:22] And he tossed out some numbers. I think it was like 31 percent profit when they sell it directly to the consumer themselves. Seventeen percent when they sell through Amazon. So they do take a little bit of a hit, but they know that consumers are making purchases on Amazon. That’s where a lot of us are going. So they are probably wise to be there, even if they have to take a little hit on the profit.
Sandro: [00:06:44] Or searching on Amazon, just to search.
Liz: [00:06:46] Yeah just see what’s out there see what review, what reviewers are saying. Yeah.
Sandro: [00:06:50] Thanks Liz for all that information and thank you for joining us. You will find us where you find your favorite podcasts. If you have feedback on this or have your own Amazon story to share, we’d love to hear it. We’ll leave our email address in the show notes. You will also find us on Instagram, Facebook and Twitter. Thanks for joining us. We’ll see you next time.