Growth of Amazon’s search business hasn’t just come at Google’s expense.

Some advertisers are taking more of the money they would have traditionally spent with supermarkets like Walmart and Tesco to buy as much as half of their ads on Amazon instead, according to e-commerce and media agency sources.

Morgan Stanley analysts have estimated $178 billion is spent annually on in-store promotions and coupons in the U.S. This shift now puts that pot up for grabs for Amazon, which has traditionally found those budgets harder to access than TV, print and search.

Traditional media and online budgets are handled by advertisers’ marketing teams, but shopper marketing is run by trade teams, particularly in CPG businesses, because they deal directly with retailers. It’s a setup that has kept shopper marketing budgets largely out of reach for Amazon and Google until now. But with more sales happening online, advertisers have started to rethink how that money is spent.

Large CPG advertisers tend to fund around 60% of their Amazon ads from shopper marketing budgets, said Connor Folley, former Amazon executive and founder of search ad platform Downstream. This split drops to 25% for smaller advertisers due to their marketers not always making the distinction between shopper marketing and general marketing budgets, said Folley. Advertisers are increasingly spending shopper marketing budgets online, and most of that incremental investment goes to search ads on Amazon, he added. But ad tech vendors like Criteo, and increasingly retailers like Walmart and Target, are trying to get in on the action.

At retail performance agency CPC Strategy, shopper marketing accounts for as much as 65% of what some advertisers spend on Amazon or as little as 10%, according to Nancy-Lee McLaughlin, senior manager of marketplace channels at CPC Strategy, now part of Elite SEM.

“The magic Amazon has wrought is to bring the media inventory right to the point of sale,” said Alistair Dent, managing director of iCrossing. “Advertisers aren’t treating Amazon as a marketing cost in the traditional sense: It’s a profit center. Within the limits of diminishing marginal returns, they want to spend as much on Amazon as possible.”

For the former head of media at a global CPG advertiser, using shopper marketing budgets to grow spend on Amazon isn’t straightforward.

There was a lot of internal confusion over what part of the business should manage and fund advertising on Amazon three years ago, said the marketer. At that time, the e-commerce team, category team, digital team and marketing team all worked directly with different parts of Amazon, they added. The confusion meant there were times when the marketer’s media agency would negotiate ad deals with Amazon without being made aware of the stock commitments brokered by their colleagues in the category team. When those media and sales commitments weren’t aligned by the advertiser it led to wasted spend, which is why the marketer started to build a team that consisted of sales, trade, content and supply chain execs to figure out how to fund ads on Amazon.

“In-store promotions accounted for around 70% of what the CPG company I worked for spent annually on marketing and advertising, which was why it became a larger part of what I spent on Amazon,” said the former head of media, who spoke to Digiday anonymously. “I needed to find new money outside of digital to spend on Amazon. For some campaigns I’ve run on Amazon, around two-thirds of the budget came from shopper marketing.”

Other advertisers seem poised to make similar moves.

Procter & Gamble, Unilever, Coca-Cola, Mars and PepsiCo are among a raft of global CPG business on the hunt for retail experts who understand that media spend on Amazon is less effective without a well-established e-commerce presence there. Agencies are making similar investments, whether that’s on behalf of clients as is the case for Mindshare across EMEA or the expansion of e-commerce focused consultancies from Dentsu Aegis Network and WPP over the last six months. Until now, the buy side hasn’t always known where the ad dollars should come from to buy ads on Amazon, they just knew they had to buy more ads there, said Maja Milicevic, principal at Sparrow Advisers, who has worked with CPG advertisers in the past.

“The ad industry is catching up on shopper marketing now but Amazon is already proactively pitching to CPG advertisers to show them how they can start to move more of those budgets online,” said Milicevic.

Many advertisers have struggled to see the difference between buying search ads on Amazon and Google. Larger advertisers have moved large sums of money from Google — sometimes as much as 50% — into Amazon in recent years without really considering how those two platforms worked together, said Amazon sales manager at Blue Wheel Media Daniel Tejada. Now, the more progressive clients are looking to incremental sources like shopper marketing to inflate their ad budgets rather than pull from existing search budgets.

“For brands, Amazon search and Google search represent two different types of marketing programs,” said Frank Kochenash, president of Wunderman Thompson Commerce North America. For brands with no direct-to-consumer website, Google search is a brand marketing play with the goals of reach and frequency, said Kochenash. However, for those same brands, Amazon is a performance-marketing channel to drive sales at an efficient ROI compared to other sales driving activities.

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