Research Briefing: Amazon is having a busy week at Cannes

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In this edition of the Digiday+ Research Briefing, we examine Amazon Ads’ new AI offerings and Omnicom partnership, how influencer agencies are capturing attention at Cannes and GroupM’s 2024 ad spending forecast, as seen in recent data from Digiday+ Research.

84% of brands and retailers use Amazon for retail media

At the Cannes Lions Festival of Creativity this week, Omnicom announced a strategic partnership with Amazon around its Amazon Ads service. The partnership enables Omnicom’s planning and investment teams in Omnicom Media Group to access Amazon’s proprietary browsing, shopping and streaming insights to directly tie linear and CTV investment to purchases made on Amazon.

Meanwhile, Amazon Ads has been trumpeting the AI capabilities of its demand-side platform as part of a week-long charm offensive at the advertising industry’s marquee conference. Amazon Ads formally unveiled Ad Relevance after trialing the service in closed beta testing for two years, according to Brian Tomasette, director of Amazon DSP products. 

Amazon’s Ad Relevance is an offering that claims to help advertisers target online audiences without the need for the (soon-to-be-departed) third-party cookie or reliance on the host of ID solutions that have flooded the market in recent years within its DSP.  

Among all marketers who invest in retail media, Amazon is by far the top platform. That’s according to a first-quarter Digiday+ Research survey of brand, retailer and agency professionals. Of the brand and retailer pros who said in Q1 2024 that they advertise via retail media channels, 84% said they were currently using Amazon. Agency pros were on par with their brand counterparts at 82%.

Digiday’s survey found that, for both brand and agency marketers, sales is the main way they measure the success of their advertising on Amazon. About three-quarters of marketers said that they measure their success on Amazon through commerce or sales (73% of brand and retailer pros said this and 78% of agency pros said this). Conversions like downloads and registrations came in second for both groups, with 13% of brands saying it is their main measurement of success on Amazon and 22% of agencies saying the same.

Keep an eye out for Digiday’s 2024 CMO Strategies report on marketers’ retail media advertising strategies, which publishes next week.

The stats:

  • Overall, brands are a lot more invested in retail media than agency marketers. While nearly three-quarters of brand and retailer pros (70%) said that, as of Q1 2024, their companies advertised via retail media, including Amazon, fewer than half of agency pros (44%) said the same of their clients.
  • Walmart came in as the second most used retail media network among brands, with 54% of brand and retailer pros saying they were using the platform as of Q1, followed by Target at 30%. The order came out the same on the agency side of things, but with very different percentages: 36% of agency pros told Digiday they were using Walmart for retail media advertising in Q1, and 25% said they were using Target.
  • Twenty-eight percent of brand and retailer pros said in Q1 that lack of budget is the biggest challenge they face on Amazon, followed by 24% who said cost of media is their biggest challenge on the platform. Meanwhile, 41% of agency pros said cost of media is the biggest challenge they face on Amazon, followed by 23% who said lack of resources and content demands are the most challenging.

Read more about brands’ and agencies’ Amazon investments

Digiday+ Research digest

Much like their clients, influencer agencies are capturing attention at the 2024 Cannes Lions festival, and Cannes could prove to be when acquisition discussions take place. “Influencers and creators have become so prominent that now they are a media channel,” said Krishna Subramanian, founder and CEO of influencer marketing firm Captiv8, while noting that that channel still stands outside most media shops in which holding company agencies operate. “And so now, if they start to make this more incorporated across everything, that’s where having something in house — or some sort of differentiation — [makes sense]. You could see agency holding companies picking up pieces to help strengthen that value proposition.”

Insights and stats:

  • Digiday+ Research recently examined which types of sponsored posts garnered the most attention for a brand on an influencer’s Instagram account. Sponsored still images had the highest engagement rate on the platform, meaning the number of likes and comments per following count. Interestingly, Reels had the lowest engagement rate.
  • Looking specifically at the brand category for these sponsorships, those in the beauty category received a higher rate of engagement on average for posts that included a single still image. For fashion and all other categories, carousel posts had the highest average rate of engagement.
  • That is because the beauty audience tends to be well-educated in beauty products and includes high numbers of industry professionals. “Instagram is more savvy in beauty. YouTube is more relationship-built and people are looking for more relatable content. TikTok is more education and intro to beauty.” — Stephanie Valentine, influencer

Read more about influencers’ Instagram engagement rates

In its mid-year advertising forecast, GroupM said it expects global ad spending to grow 7.8% in 2024 to $989.8 billion, excluding political advertising. That’s a notable bump from its original 5.3% growth forecast. Most of this growth will come from the U.S. and China, which together account for nearly 60% of global ad dollars. In Digiday’s most recent media agency report, agency survey respondents said they expected clients to increase spending in social media, search marketing and digital display more than other channels in 2024. Digiday will publish an updated media agency report this fall, with agencies’ predictions for 2025 client spending.

Insights and stats:

  • The majority of agency respondents (87%) said they expected clients to increase social media spending in 2024. Fifty-seven percent of respondents said the same of search marketing, while 54% said they expected clients to increase spending for digital display and website.
  • Digital channels are relatively easier to move money in and out of, and to otherwise reconfigure, than other channels. However, digital spending can be tougher to predict precisely because digital channels offer so much flexibility.
  • “As we are shifting to digital media, it’s a bit harder to forecast where the 2024 budgets sit because those can be placed near term, or we can place those dollars and pull back as needed. It’s different than historically where linear TV and upfront made up the lion’s share of the market and was pretty indicative of where things sat.” — Samantha Rose, evp and strategic investment lead at Horizon Media

Read more about agencies’ 2024 client spending expectations


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