Why the Amazon/Sizmek Deal Matters

Why the Amazon/Sizmek Deal Matters

Advertising Amazon

On May 31, Amazon said it will acquire assets from Sizmek, an advertising technology firm. The announcement consisted of three paragraphs with little detail. But the deal is valuable for Amazon as the company builds a stronger advertising platform to compete with Facebook and Google.

Amazon Advertising Gains Market Share

Amazon’s advertising business is slowly taking market share from Facebook and Google. According to eMarketer, Amazon will capture 8.8 percent of U.S. digital ad spending in 2019. This amount trails far behind Google (with 37.2 percent market share) and Facebook (22.1 percent). But Amazon is building its advertising operation from scratch, and in a short time it has emerged as a threat primarily to Google, as consumers shift their product searches away from Google and toward Amazon.

How Sizmek’s Assets Will Help Amazon

Amazon purchased Sizmek’s ad server and dynamic creative optimization tools, the latter of which helps personalize ads using data. Sizmek’s tools will bolster Amazon’s already strong warehouse of customer data with even more data from ad serving. Doing so will give Amazon more targeted ways to advertise to the millions of people who search for products on Amazon and willingly share their personal information with the company. The deal isn’t making Amazon bigger, but it will make Amazon smarter.

What Advertisers Should Do

At True Interactive, we help businesses capitalize on Amazon as an advertising platform as part of our broader digital advertising offerings. We’ve been actively blogging about the many features Amazon Advertising is developing, such as video ads on Amazon’s mobile app. Based on our own experience, we suggest advertisers:

  • Examine how partnering with Amazon Advertising will help you attract and acquire customers, even if you don’t sell products on Amazon. As The New York Times reported recently, Amazon is tapping into its rich vein of customer data to help companies create more targeted ads across the digital world – an “insanely powerful” capability, according to the article.
  • Watch as Amazon’s competitors evolve their platforms to compete with the Amazon threat. For instance, Google recently announced new features intended to make it a stronger mobile advertising platform (which we discussed here). And, don’t forget Microsoft. Its own advertising business, while small, gives businesses an alternative to the Big Three of Amazon, Facebook, and Google.

Online advertising is changing rapidly as the major players make acquisitions and develop their products organically. Advertisers will benefit so long as you remain vigilant and capitalize on these improvements. True Interactive can help you. As an outside party, we constantly evaluate new tools and ensure that our clients benefit from them with effective digital advertising campaigns. Contact us. We’d love to make your online advertising more powerful.

Coming to the Amazon App: Video Ads

Coming to the Amazon App: Video Ads

Amazon

As consumers increasingly shop online, Amazon’s app is a popular go-to destination, and the company is clearly paying heed. Recent Mobile Marketer and Bloomberg articles underscore Amazon’s sensitivity to consumer habits and the way the company is responding to what it sees: for example, by testing video ads in the Apple iOS version of Amazon’s shopping app. The move makes Amazon a stronger advertising alternative to Google and Facebook, and signals not only the e-commerce giant’s increased focus on advertising, but also its recognition of the public’s hunger for mobile ads.

Savvy and Lucrative

Incorporating video ads on the Amazon app is a savvy move. As an intent-based app, Amazon tends to draw consumers who already possess a desire to buy. The video spots, which pop up in response to users’ search results in Amazon’s shopping app, are meant to capitalize on this intention. It’s also a lucrative move for the company: though prices range depending on the ad category and not everyone pays a fixed rate, Amazon is charging roughly a $35,000 ad budget to run the spots at five cents per view for 60 days. The plan is to start with iOS, then expand to Google’s Android mobile operating system later this year.

Growing Along with Digital Advertising

As we’ve been discussing at True Interactive, the news is a sign of Amazon’s continued growth as a platform for businesses to advertise on—not just sell products on. And although Amazon’s April 25th first quarter earnings announcement reports a slowdown in that growth, the announcement also makes it clear: Amazon’s advertising business remains strong and highly profitable.

Furthermore, Amazon is making inroads into others’ share of the spoils. eMarketer reports that Amazon’s advertising business will capture 8.8 percent of U.S. digital ad spending in 2019, eating into the percentage enjoyed by the duopoly of Google and Facebook (Google, while still enjoying the lion’s share of digital ad spending, is projected to drop by one point in 2019). And Amazon, though still trailing behind Facebook and Google in advertising spend share, seems uniquely positioned to step up. As eMarketer forecasting director Monica Peart notes, “Amazon offers a major benefit to advertisers, especially CPG and direct-to-consumer [D2C] brands. The platform is rich with shoppers’ behavioral data for targeting and provides access to purchase data in real time.”

It’s a good time for Amazon to expand in this way: as we discussed in a recent post, mobile ads are on the rise. Forrester reports that between 2017 and 2022, mobile will drive 86 percent of growth in U.S. digital ad spending. The digital dollars are being siphoned from other, more traditional ad spending shares, according to eMarketer: directories like the Yellow Pages, for example, and traditional print resources like newspapers and magazines. “The steady shift of consumer attention to digital platforms has hit an inflection point with advertisers, forcing them to now turn to digital to seek the incremental gains in reach and revenues which are disappearing in traditional media advertising,” Peart said.

What You Can Do

Whether or not you advertise on Amazon, the news offers a compelling reason to have a mobile ad strategy. We recommend that you:

  • Remember that mobile is its own beast. Take a page from Amazon’s book: listen to the signals of consumer behavior and shape your mobile advertising accordingly.
  • Watch for Facebook and Google to respond with more mobile ad products, and see how they do it. Watching these giants maneuver and attempt to one-up one another can be a great way to learn what works.
  • Consider how video plays into your advertising mix. Video has its own set of requirements for production and creative concepting: what does that mean for your business and the resources you have at hand?

True Interactive works with businesses all the time to develop their video advertising campaigns Call us, and see our recently published case study with Snapfish, to get an idea of the kind of work we do.

Photo by You X Ventures on Unsplash

 

 

 

 

Why the Launch of Microsoft Advertising Is Good for Brands

Why the Launch of Microsoft Advertising Is Good for Brands

Bing

For many businesses, the discussion about online advertising platforms begins and ends with Amazon Advertising, Facebook, and Google. But recently Microsoft stated the case for why it belongs in the same conversation. On April 29, Microsoft announced that its Bing Ads product has been rebranded as Microsoft Advertising. The announcement was more than a name change. Rather, Microsoft reminded advertisers that there’s a lot more to Bing than paid search.

Bing: More Than Search

Bing is already a platform for businesses to launch digital advertising in a number of ways. For example, as we blogged last year, Bing has been rolling out a feature that makes it possible for businesses to target Bing advertisements by relying on LinkedIn data. The feature, known as LinkedIn profile targeting, is an example of how Microsoft is monetizing LinkedIn a few years after Microsoft purchased the popular business-to-business platform. In addition, Bing is piloting a number of products, such as these audience marketing products:

  • In-Market Audiences: targets curated user lists determined to be in market for a particular purchase category.
  • Product Audiences for Search: businesses get remarketing lists for products that allow them to target searchers based on product IDs they interacted with – and promote those same product IDs to them.
  • Microsoft Audience Ads: Audience Campaigns: you can manage your audience budget, campaigns, and optimization separately from your Bing Ads search campaigns.
  • Similar Audiences: targets audiences that are similar to your remarketing audiences.

Bing Advantages

Many advertisers aren’t aware of these and many other Microsoft ad products. But they should. As I blogged last year, Bing offers many advantages. For instance:

  • At True Interactive, we have seen larger average order values on Bing compared to Google. In other words, the typical consumer on Bing spends more per purchase. That’s because the average Bing searcher probably has a higher income level than the average Google user.
  • Bing innovates in more ways than the brand gets credit for, such as its use of visual content. The recently launched Bing visual search extends a strong visual search capability across both Android and iOS devices, whereas visual search on Google remains limited to the Android world.
  • Bing is building a stronger network of partners. As noted earlier this year, Bing is the exclusive provider of search advertising across Verizon Media properties such as Yahoo.

Microsoft used the news about Microsoft Advertising to draw attention to the launch of more advertising products. For instance, the new Sponsored Products (available exclusively in the United States) helps manufacturers to boost visibility and drive more traffic for their top products in shopping campaigns. As Microsoft noted,

With this new capability, our clients can achieve better alignment of marketing efforts between manufacturers and retailers. Together, the connections they create with shoppers work harder to drive performance — clicks, conversions, and ROI. Manufacturers gain access to new reporting and optimization capabilities, and retailers get additional product marketing support with a fair cost split.

Microsoft wants the rebrand to do for Microsoft what the launch of Amazon Advertising achieved for Amazon and the rebrand of Google AdWords to Google Ads did for Google: raise awareness for a broader portfolio of products.

Why the Rebrand Is Good

I believe that the expansion of ad products under the Microsoft brand is good for advertisers for these reasons:

  • Businesses have more options beyond the Big Three of Amazon, Facebook, and Google.
  • Stronger competition will lead to innovation with product development.
  • As I noted, Microsoft delivers a valuable audience, more so than many businesses know.

At True Interactive, we work with businesses to develop successful campaigns across all these platforms and more. Contact us to learn how we can help you succeed.

Instagram Creates Its Own Customer Journey with Checkout

Instagram Creates Its Own Customer Journey with Checkout

Social media

Instagram describes itself as a platform for people to “experience the pleasure of shopping versus the chore of buying.” It’s designed for people to browse for ideas and then shop as opposed to visiting with an express intent to buy and leave. On March 19, Instagram took one step closer to making itself a strong shopping destination by launching a checkout function.

Available on a limited basis, Instagram checkout makes it possible for Instagrammers to buy what they want on Instagram. As Instagram said in a blog post, “Checkout enhances the shopping experience by making the purchase simple, convenient and secure. People no longer have to navigate to the browser when they want to buy. And with their protected payment information in one place, they can shop their favorite brands without needing to log in and enter their information multiple times.”

Charter businesses participating in checkout include Burberry, Nike, and Revolve. In coming weeks, more businesses will participate, including Adidas, H&M, KKW Beauty, Kylie Cosmetics, MAC Cosmetics, Michael Kors, NARS, Oscar de la Renta, Prada, Uniqlo, and Warby Parker. (It’s interesting to note the number of upscale brands creating shoppable experiences on Instagram – a comment on how luxury brands have adapted to the times by becoming more accessible via digital.)

Checkout seems like a natural move for Instagram. As Vishal Shah, Instagram’s head of product, told The Wall Street Journal, “People were already shopping on Instagram. They were just having a hard time doing it.” The platform previously launched shoppable features such as product stickers in Stories. Vishal Shah  told Bloomberg, “Over time, as we are creating value for people, this could be a significant part of our business.”

The launch of checkout positions Instagram against Amazon as a platform for searching and shopping although Amazon clearly has an advantage with its scale. Enabling commerce on Instagram also makes it possible for businesses to create more integrated advertising experiences that connect the customer across the entire purchase journey, from awareness to conversion – with the entire journey occurring inside Instagram (instead of sending customers to an advertiser’s website to make an actual purchase). This is the kind of experience Amazon is creating – a self-contained customer journey where you can search and buy on one platform.

For more insight into how to create successful digital advertising on Instagram, contact True Interactive. We’re here to help.

Image source: Instagram

Advertising Powers Google’s Future

Advertising Powers Google’s Future

Google

In recent weeks, we have seen a flurry of earnings announcements from the major digital advertising platforms, including the big three: Amazon, Facebook, and Google. Together these companies account for 62 percent of all digital ad spend, according to eMarketer.

Google dominates with 37.1 percent market share. And yet, during earnings season, Amazon and Facebook have dominated the news even though Google’s ad business grew by 20 percent (year over year) for the final quarter of 2018. Google’s advertising revenues for the quarter were $32.6 billion, accounting for 83 percent of Alphabet’s revenue. For the full year, Google achieved $116.3 billion in ad revenue compared to $10 billion achieved by Amazon Advertising.

Where’s the Love for Google?

So where’s the love for Google? Here’s what I think is happening:

  • Surprise is more interesting than predictability. Facebook surprised analysts by reporting strong advertising growth for 2018, as we noted on our blog. Here is a company that has been rocked by data privacy scandals for months. And yet, the world’s largest social media platform just keeps growing, which raises questions about how important data privacy really is to Facebook’s community. As for Google? Advertising growth is expected. Even when Google surpasses analysts’ estimations, the pundits say “Yes, but . . . “ With Google’s latest quarterly earnings, analysts noted that Alphabet is spending more to support its ad business.

Google’s Advantages

But make no mistake: Google is going to continue to grow its ad business and in doing so will draw upon several advantages, such as:

  • A massive user base that relies on Google across multiple platforms and apps ranging from the Google search engine to Google Maps and YouTube.
  • A head start in using artificial intelligence to make advertising smarter and more effective. True, Google faces competition from Amazon and Facebook. But as I’ve noted, Google’s extensive AI tools are rapidly evolving.
  • Global reach. Amazon and Facebook are improving their advertising products to support international ad campaigns, but Google commands an already established global presence.
  • Strong content marketing that educates advertises on Google’s products. You can see for yourself from Google’s blogs.

What Businesses Should Do

My advice to businesses:

  • Stay abreast of advances in Google’s ad tools, especially with AI.

To maximize the value of your digital ad spend, contact True Interactive. We’re here to help.

Alexa Stars in Amazon’s 2018 Earnings Announcement

Alexa Stars in Amazon’s 2018 Earnings Announcement

Amazon

The conversation about the voice interface no longer focuses on whether we’re entering a voice-first world. The questions have quickly shifted to who will lead it and how soon using our voices to search for things and manage our lives will be as second nature as texting.

My teammate Taylor Murphy recently discussed an answer to the first question: no single firm “owns” the voice-first world, but both Amazon and Google have a strong lead. The answer to the question about how quickly voice will saturate our lives comes down to how soon people will be comfortable using voice to do tasks that require extremely high levels of trust in the device you’re using, such as buying a product or handling an emergency. Most people use voice to do mundane things like check the weather. Few actually ask Alexa or Google Assistant to order a pizza or conduct other transactions. That’s because we’re not quite ready to trust a device to interpret our speech with enough accuracy.

The major players in voice are trying to address that issue. In Amazon’s January 31 earnings announcement, CEO Jeff Bezos said, “The number of research scientists working on Alexa has more than doubled in the past year, and the results of the team’s hard work are clear. In 2018, we improved Alexa’s ability to understand requests and answer questions by more than 20% through advances in machine learning, we added billions of facts making Alexa more knowledgeable than ever, developers doubled the number of Alexa skills to over 80,000, and customers spoke to Alexa tens of billions more times in 2018 compared to 2017.”

Normally CEOs comment on high-level, visionary messages in earnings releases, such as top-line growth, major product launches, and corporate strategy. I find it interesting that Jeff Bezos decided to talk about Alexa’s accuracy, and the number of Alexa skills developed. What does this tell you? That Alexa is strategic to Amazon. Jeff Bezos already saw the voice-first world coming, and he decided to help shape it.

So what does all this mean to businesses that advertise online? It means that before you know it, we’re going to turn the corner with voice accuracy. Consumers will use their voices for e-commerce. So it’s important to prepare. For example, as noted previously by my colleague Taylor, advertisers should evaluate their search queries and look for conversional text (“Who,” “What,” “Where,” “When,” “Why,” and “How” are great phrases to focus on). Also, pay attention to any long-tail queries that include a natural phrase such as “near me” or “can I get the number for . . . ”

The above advice applies not only to optimizing content on your websites but also preparing your paid media, such as paid search campaigns. Thinking like a customer might be the most effective way of ensuring your digital marketing efforts are visible to RankBrain – part of Google’s core algorithm that employs machine learning to draw the most relevant results from a search query. RankBrain collects multiple data points like keywords and the searcher’s location in an attempt to identify the intent of a search to then pair the query with the most relevant and valuable result.

Remember, voice isn’t just about using Echo or Google Home. It’s also about doing voice searches on devices where ads appear.

If you sell products on Amazon, the sense of urgency to adapt to voice is even greater. Amazon is clearly using its own retail platform to sell more Echo speakers, and more Echo speakers means more people using their voices to find and eventually buy things on Amazon.

You don’t want to be a laggard in that world. Contact True Interactive to make your online advertising flourish.

 

Why Netflix Might Embrace Advertising

Why Netflix Might Embrace Advertising

Advertising

Netflix and its boosters are celebrating the company’s first ever Best Picture Oscar nomination for Roma – but the company is also catching fire from investors. Although its fourth-quarter 2018 financial results beat Wall Street estimates for earnings per share, revenue fell below projections.

Netflix also faces other formidable challenges, such as increased competition from streaming services (e.g., Amazon and Hulu), the entrance of new services such as Disney+, and the enormous cost of spending on original content. So perhaps it’s no surprise that Netflix has raised prices. But in recent months, Netflix has also been testing ads between episodes, and its customers have not been happy about this development. The company said that trailer tests were just a way to surface new programs to loyal viewers, claiming it will help members “discover stories they will enjoy faster.”

With pressure coming from multiple sides, how can Netflix increase revenue and expand its subscriber base without losing its customers?

Competition from Hulu

We’ve seen at least one streaming service employ advertising: Hulu. When Hulu first launched in 2007, all content was completely free and supported by advertisements. In 2010, the company launched its first subscription option while maintaining the original ad-supported tier. Then in late 2016, the brand migrated towards a subscription model. Today Hulu offers ad-supported and ad-free pricing tiers.

The ad-supported tier has served Hulu well by increasing brand awareness and expanding its subscriber base. Granted, Netflix does not need to boost brand recognition. However, Netflix (and Amazon, for that matter) could benefit from this strategy if it wants to enter into new markets, which should be a priority for Netflix given the financial turmoil the brand has been recently experiencing.

Providing an ad-supported service plan might sound like a step backwards to Netflix stockholders. If Hulu moved away from it, why would Netflix bother?

  1. Original Content

The creation of original content is perhaps the most dramatic change in the way streaming services operate. Whereas audiences used to turn to streaming services to watch, say Finding Nemo, people now use these services for original movies and shows, a reality that was underscored by Netflix’s Roma being nominated for 10 Academy Awards.

With Disney’s new movie streaming platform launching later this year, it is clear that movie streaming companies no longer want to simply be a content warehouse, storing thousands of movies and TV shows made by third parties. Netflix, Hulu and Amazon want to lure potential customers into becoming subscribers through their exclusive movies and shows. This means that streaming platforms have the bargaining power, as they all have some unique value nobody will find elsewhere.

The quality content matters. Unique content attracts more paying subscribers, which gives Netflix a bigger platform for potential advertising. With 139 million subscribers worldwide, Netflix could easily increase that number by introducing an ad-supported tier. Doing so would also help relieve some of the financial pressure caused by the expensive production costs of original content – around $12 billion in 2018 alone, and expected to grow by 25 percent  to a whopping $15 billion mark in 2019.

  1. Google/Facebook Duopoly

It’s no secret that a large number of companies today are directing a good portion of their ad spend to Google and Facebook/Instagram (and, increasingly, Amazon). Other channels simply cannot match the performance, scale, and targeting capabilities of these tech giants. The growth of these platforms also reflects the strength of the digital advertising industry and suggests that there is room for more businesses to launch advertising based on their built-in audiences. As noted, Netflix has a growing audience with 139 million subscribers – and Netflix aspires to grow more especially outside the United States.

3 Targeting Capabilities

Knowledge is power. Think about all the behavioral data and Netflix has on its subscribers. Netflix can offer advertisers advanced interest targeting based on their activity on each platform. By using algorithms and machine learning, Netflix can predict which type of content a specific user may want to consume next. This data could also be used to serve users ads that are relevant, and for marketers, effective. In addition, with the help of pixels, Netflix would be able to collect data outside its environment just like Google and Facebook do, thus providing advertisers with more insights on the consumer behavior outside the streaming services and the customer journey.

It’s too soon yet to know if Netflix will launch an ad-supported tier. However, I wouldn’t be surprised if it does in the near future, as companies built on the “ad-free” premise are now acknowledging their advertising potential and evaluating the cost-benefit relationship of introducing ads to their platforms, just like Whatsapp. Is advertising revenue too tempting for Netflix?

To maximize the value of your online advertising, contact True Interactive. We’re here to help.