‘Like having a lawyer in the room’: Agencies are turning advertisers’ angst about spending on Amazon into an opportunity
Agencies are playing up Amazon angst to their advantage.
Marketers are wary of their margin becoming Amazon’s opportunity when they buy ads for products they sell on the site. Agencies, in response, are acting like advisers to those marketers, building on their earlier attempts to capitalize on interest in the platform.
When e-commerce management firm Kwontified met with one of its advertisers recently, the client wasn’t interested in learning how to buy a search campaign. Instead, it wanted to know how to protect its interests if it shared its data with Amazon in order to reach the right shoppers.
“There’s a latent fear among a lot of brands that if they get too close to Amazon that they’ll copy and extol what they have,” said Jordan Taylor, Kwontified head of marketing. “Rather than just creating campaigns, we’re forecasting sales for clients, talking to them about whether the platform is right for their brand before going in to negotiate deals with Amazon reps on their behalf.”
An ad agency executive, who spoke to Digiday on condition of anonymity due to existing deals with Amazon, summed up why that difference is such an intriguing concept for their agency: “Not all my clients like working with Amazon because it has been going directly to them, absorbing all their information without sharing anything back. People talk about the role of an agency in a world where Amazon becomes the dominant channel, and my answer to clients is, ‘You should treat us like having a lawyer in the room.’”
The agency is building a consultancy capable of bringing the e-commerce and media aspects of Amazon together for clients. Once built, the agency’s Amazon division will have little similarity to its other specialist teams, said the executive. While media planning and buying will be offered, the real differentiator will be in the team’s ability to advise marketers on what products to put on Amazon, how to control the third-party seller environment, creating a product review process and working with Amazon’s executives.
“The fact is that there are many advertisers that are still looking at Amazon like a retailer rather than an advertising platform,” the agency exec said. “That means a lot of the spend is coming out of shopper marketing budgets than the bigger media ones.”
To a business like Nike, which likes to keep its brand on a tight leash, Amazon’s web of third-party sellers took that control away. Search ads from the Amazon Marketing Services division aren’t going to solve those sorts of problems for advertisers, said Avery Durnan, vp of media platforms at VaynerMedia. Some of the advertisers just want guidance on how to fit Amazon’s e-commerce offering in their media strategies, rather than actual campaigns. It’s those clients that don’t want to be left behind on Amazon, said Durnan, but also don’t want to jump into it with limited knowledge of the impact it could have on their own businesses.
VaynerMedia has an entire division dedicated to tackling those questions for clients, said Durnan. More brands “just want the education on Amazon,” she said.
“There are brands hesitant to invest on Amazon because they feel like they will lose their margin, but we’re trying to encouraging them to realize that if they’re not going to be there [on the site], then someone else will by distributing their product,” she said. “We’re having to explain to brands that they can control those third-party sellers by owning their [product] listing and owning their own brand terms.”
Experienced Amazon advertisers don’t appear to share the concerns of first-time advertisers on the platform. By the end of the year, Amazon’s ad revenues in the U.S. are forecast to jump 63.5 percent, surpassing $2 billion for the first time. The rise will give the retailer a 2.7 percent share of the U.S. digital ad market, a portion that will grow to 4.5 percent by 2020.
“We absolutely have to act as consultants right now,” said Gareth Owen, managing director at digital agency Roast. “Learning the best way to hack the platform, learn with Amazon and being agile and fleet of foot is the only way to keep ahead of what will be a long journey to maturity.”
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