Digiday+ Research: Brands spend more on Amazon as its importance to their holiday marketing spikes

That’s according to Digiday+ Research surveys of about 100 brand and retailer professionals.

Digiday’s surveys found that brands’ marketing spend on Amazon saw a notable jump this year. More than half of brand pros (55%) said in Q3 of this year that they put at least a very small portion of their marketing budgets toward Amazon, up significantly from 15% in Q1. In other words, the percentage of brands that said they spent none of their marketing budget on Amazon fell from 85% at the beginning of this year to 45% by Q3.

At the same time, the percentage of brand pros who told Digiday they spend a very large portion of their marketing budgets on Amazon also jumped this year. In Q1 2023, zero respondents to Digiday’s survey said they invested a very large amount in marketing on Amazon. By Q3, a not insignificant 9% said Amazon got a very large portion of their marketing budgets.

It is worth noting, though, that this large jump in brands investing in marketing on Amazon in the back half of this year represents a rebound more than it represents an upward trend. Throughout 2022, about 40% of brands invested at least a very small portion of their marketing budgets in Amazon, before falling off in Q1 2023. Brands’ seemingly renewed interest in marketing on Amazon is a potential indicator that retail advertising is set up for a big year in 2024.

To that point, the percentage of brand pros who told Digiday they invest at least a very small amount in marketing on other retail sites like Walmart, Target and eBay saw a similar rebound in Q3 of this year. While about 40% of brands said they invested in marketing on other retail sites throughout 2022, that percentage fell to 27% in Q1 of this year before once again hitting 40% in Q3.

Brands’ spend on Amazon makes sense when we look at how confident they are that Amazon drives success as a marketing channel. Digiday’s survey found that, while brands’ confidence in Amazon as a marketing channel fell consistently throughout 2022, that confidence actually climbed significantly as of Q3 of this year.

In Q1 2022, 60% of brand pros told Digiday that they were at least slightly confident that Amazon drove marketing success. By Q3 2022, that percentage fell slightly to 55%, and then fell again — a bit more steeply — to 45% in Q1 2023. However, in Q3 2023, just more than two-thirds of brands (67%) said they had confidence in Amazon as a marketing channel.

What’s more, brands’ growth in confidence in Amazon is reflected strongly in the confident and very confident categories (as opposed to somewhat or slightly confident). While just shy of a quarter of brand pros (24%) told Digiday in Q1 of this year that they were confident or very confident that Amazon drives marketing success, a much higher 40% said the same in Q3 of this year.

Interestingly, outside of Amazon, brands’ confidence in other retail sites has been trending downward in recent quarters, albeit slightly. Forty-three percent of brand pros said in Q1 2022 that they weren’t confident at all that other retail sites like Walmart, Target and eBay drive marketing success, compared to 45% in Q3 2022, 49% in Q1 2023 and 52% in Q3 2023.

At the same time, Q3 2023 was the first time brand respondents to Digiday’s survey said they were very confident that other retail sites drive marketing success. Through all of 2022 and into Q1 2023, zero brands said they were very confident in other retail sites. In Q3 2023, 11% said they were very confident in them.

It turns out that brands’ growing confidence and investments in Amazon as a marketing channel have led directly into their plans for the channel during the all-important holiday shopping season. Digiday’s survey found that Amazon is significantly more important to brands’ and retailers’ holiday marketing plans this year than it has been in the past.

Sixty percent of brand and retailer pros said in Q4 of this year that Amazon will grow more important to their marketing plans during the holidays, a big jump from the 39% who said the same in Q4 last year. Meanwhile, just 8% of brands and retailers said this year that Amazon is less important to their holiday marketing plans.

With nearly two-thirds of brands and retailers putting more emphasis on Amazon in their holiday marketing after ramping up their investments in the channel in the back half of this year, marketers are potentially teeing up retail ads to be a vital marketing channel in 2024.