The biggest and most important Amazon market is without a doubt the US market. It weighs 67% of revenues and grew by 19% in 2021. It will be a long time before any other market catches up. If ever! The three following markets: Germany, United Kingdom and Japan add up to only 20% of revenues. And the remaining 15 active markets 14%. Amazon is top-heavy despite a massive international expansion.

[the original article from 2021 has now been updated with 2021 numbers and developments]

The top four markets are directly accounted for in quarterly earnings report. The following five markets, India, France, Italy, Canada and Spain all had more than 150.000 sellers in their local Amazon marketplace according to this overview of third party sellers by country from Statista, and we checked their traffic and GDP per capita to build an initial list. When we initially shared this, we were made aware of actual measured figures which Edge by Ascential provides us with. To our surprise, India is actually the fifth biggest market ahead of France and Italy. For the tenth position, we initially bet on Brazil, but it seems it is Australia that holds that position followed relatively closely by UAE and Mexico.

Managing multiple marketplaces on Amazon

Navigating the various marketplaces can be complex on Amazon. And even more complex for ecommerce outside of Amazon. As the formats and functionalities of market places are essentially the same from one Amazon country to the next, there are a couple of practical solutions in place. In North America, sellers can set up a unified account to cover US, Canada and Mexico. And in Europe, a unified account spans Germany, the United Kingdom, France, Italy, Spain, Netherlands, Poland and Turkey. If you are looking to expand internationally, the Amazon’s Global Selling guide is your go-to destination.

Amazon’s international growth strategy

Amazon appears to have a distinct synergy-driven approach to internationalisation where new markets piggy back on existing ones, and where additional features are rolled out progressively. It is also using existing regional strongholds to build neighbouring markets, as proximity is so important to ensure high quality fulfillment. Brazil may enable an expansion into Argentina in South America in the future, and Germany was a key piece in the puzzle for opening Poland. In recent plans for opening in South Africa and Nigeria, those two are part of the same project, just as Colombia and Chile are grouped together.

There seems to be a fair amount of merchant copy and paste going on to get a marketplace up and running. Product listings are autotranslated and made available in a new marketplace to get it going. There must be both ample supply and demand for a market to function.

Once merchants start flocking to the marketplace, the advertising platform is then rolled out. And with the recent opening of the physical stores, Amazon Go in the UK, perhaps the physical stores branch will start trickling down the top market list in the future. Perhaps Germany, Japan, and regional strongholds such as India and Brazil will be next?

Let’s look at some of the ways Amazon markets are growing and how the international expansion strategy seems to be organized below.

Amazon Advertising

Advertising is one of the first powerpack added after a marketplace opens. There are four types of Amazon Advertising, three of which are intimately tied together with the marketplace:

• Amazon Sponsored Products (which we like to refer to as Amazon paid search due to its similarity with Google Ads)
• Amazon Sponsored Brands
• Amazon Sponsored Display

These three are used by merchants to fight competition on the marketplace and boost their sales. As described in our Amazon Marketing Report, these solutions form an integral part of an Amazon marketing system and have been opened to all the recent marketplaces.

Netherlands, Poland and Sweden are recently opened market places and the advertising branch has not yet been launched. Turkey has been around longer but it is characterized by a small Amazon market share.

The fourth advertising type is the Amazon DSP, the demand side platform allowing advertisers to advertise inside and outside the Amazon platform and a CPM (cost per thousand impressions) model. Amazon DSP could in principle be launched independently from the other ad types, but in practice it seems to tag along with the other types or shortly after.

Amazon Prime

We have a hunch that the roll-out of Amazon’s loyalty program, Prime, follows approximately the same pattern. In Europe, Prime was launched first in the UK in 2007, in France in 2008, Italy in 2010 and Spain in 2011. The trickle down pattern is probably similar across other markets.

What will be the next Amazon market to open?

In recent years, new market places have opened or absorbed in a number of countries: Turkey, Singapore, Saudi Arabia, Egypt, Netherlands, Poland and Sweden. And in a recent article for Business Insider, plans for further expansion were leaked with Belgium up next in 2022 and for next year the plan includes South Africa and Colombia and then Nigeria and Chile.

The launch plan for 2022 – 2023 goes like this according to Business Insider:

• Belgium – Sep, 2022
• South Africa – Feb, 2023
• Colombia – Feb, 2023
• Nigeria- Apr, 2023
• Chile – Apr, 2023

(source: https://www.businessinsider.com/amazon-to-expand-into-5-countries-by-early-next-year-2022-6)

Worldwide domination is still far away

Amazon is experiencing amazing growth, its ad offering is penetrating the triopoly of digital advertising consisting of Google, Meta and Amazon Ads. Physical stores are breaking down the barriers between online and offline retail. But when we look into the details of the domination, Amazon is very top heavy and has a long way to go before it reaches the same level of market power in worldwide markets. As we exposed in our recent report “State of Retail Media 2022”, local Amazons often face competition in the form of local pure players such as Allegro in Poland and Cdiscount in France. They also face vertical marketplaces such as Zalando in beauty and fashion or ManoMano in DIY.

It is interesting to note, though, how the constant progression of Amazon in international markets reinforces existing strongholds and markets as it goes. It may take a while, but the machine seems unstoppable.

If you are aiming to build a more full understanding of Amazon marketing, you find a complete coverage in Innovell’s “Amazon Marketing Report”.

I wonder if people today know the film Matrix better than Plato’s allegory of the cave. They illustrate the same concept of a superficial reality projected onto us, from which only the fearless can escape. This is the image that we used to illustrate the state of digital marketing in 2020. Digital marketers staring at a wall onto which digital marketing providers are projecting images of end-users. Those images are not nearly as perfect as in our illustration. They are expressed as data sets, as interest categories, as intent.

For how long will we be calling it digital marketing, I wonder? We could already rebaptise it to Data marketing, for that is all it is about. Using data, to direct and optimize a campaigns executed by algorithms onto digital media. A few months back, Google removed more of the transparency in their data. They are of course far behind Facebook in that game: “No tracking allowed, here is the data you need”.

It made me think about the troubled waters data marketers are navigating in. We know that a lot of the digital activity that goes on behind the scenes is automated bot traffic. We know that we cannot track users from one marketing channel to the other, unless we are inside one of the big media players’s universe. We know that some users have installed ad blockers, that some are using incognito browsing windows, and in the future, third-party cookies will completely disappear. It is a wonder data marketers have any insight into the data at all.

Thinking like Plato and Neo: Does the data really provide insights? 

Nothing like a little philosophical step back to look at the bigger picture. The big worrying characteristic of the big marketing providers is that they are dictating the rules of the game, while they are providing the data on the basis of which you make decisions. By definition, the arbitrage is carried out by algorithms, not engineers fiddling with your data. This provides us with no guarantee whatsoever, that the data is free of bias. A very simple example from my days running a digital media agency: Google Analytics (the abiter) by default attributes conversions to paid search (the commercial offering) more favourably than organic (free) traffic.

Digital marketers are not dealing with raw data most of the time. It is interpreted data, and the interpretation has commercial intent. This is why the most important direction for digital marketers in these challenging times is to build proprietary data. If the entire user journey takes place within Amazon, or within the Google universe, or withing Facebook, you should be aware that you are not seeing raw data, but interpreted data. Building proprietary data means getting users to your own website, it means capturing tangible user data like email addresses, phone numbers and names, rather than relying on retargeting lists and intent audiences.

Read the full article on PPC Hero here:  https://www.ppchero.com/digital-marketing-in-a-vuca-world-is-it-time-to-emerge-from-platos-cave/

When I go to speak on conferences I also benefit from being there to listen to other speakers and I was fascinated on one hand by the evidence Marc Poirier from Acquisio was giving of how those who applied machine-learning to campaign performance had very significantly better results than those that didn’t. This was across a very large sample of campaigns and the uplift was between 30% and 200%. You could of course argue that perhaps those who apply machine-learning are also the ones that do everything else right on their campaigns but the evidence made a big impression on me. Machine-learning can really have a huge impact on campaign performance.

I was also inspired by Fred Vallaeys take on Artificial Intelligence and how it can change our world and our workplaces. AI in its first iteration needs to learn by Humans so there is nothing to fear, but as he clearly stated: AI in its second iteration can learn from itself and no longer needs the Human precedence. In my own research of the leading paid search teams across the world, I have noticed a very forthcoming attitude to both automation, machine-learning tools. The search marketers embraces it all, tries it out, picks the bits that are useful and sometimes updates his/her organisation to correspond to a new status quo. That is how I came to think of Schumpeter’s concept of Creative Destruction: of how in the process of disruption and innovation, things are broken down and out of that wave of destruction something else comes out. I do believe the Search Industry is well armed for this, or as I wrote in the article:

“The Search Industry is at the forefront of the upcoming revolution of work. We work directly on the platforms of some of the biggest AI players on the globe: Google, Facebook, Microsoft, Amazon. And we all feel it as our duty to try the “latest functionality” to “join a Beta”, to “try new things for our campaigns”. We are more than willing to try machine-learning and AI-driven features and functionalities and probably have our activity x-rayed and monitored for results.”

The dilemma between Learning and Performing

What seems important to me is to consider the dilemma between learning and performing. If we blindly turn to AI and let the machines do the job, we will learn nothing and render ourselves worthless. If we use AI, as with any tool, to try and test and to take us further, then we are adding value to the equation. This sometimes requires to update your organisation as well. And it requires companies to be extremely agile.

To read the full article, follow this link to PPC Hero: https://www.ppchero.com/surfing-the-waves-of-creative-destruction/

Or to simply jump to the conclusion:

“Search Marketers are AI Natives, they were bred with constant change. In a certain manner, the Search Industry is already being disrupted but we only realize this clearly today because of the AI hype of 2018. Other industries are only just starting to face this new challenge but in Search we are better prepared. This doesn’t mean that we have nothing to worry about. If we blindly trust the machines to optimize our campaigns and no longer learn, then we will have lost our added value and commoditized ourselves. I don’t see that happening. Actually, I quite like to watch the way the resilient Search Marketers constantly reinvent themselves, like surfers on the waves of creative destruction.”

Illustration: Robert Toth.

Liverpool is home to wonderful Beatles statues, to the Ferry cross the Mersey, to seagulls and Liver birds.

Liverpool was also host the the European Search Conference 2018 earlier this week. A one-day conference with a great line-up I was happy to be part of.

Chaired by Jim Banks, the one-day conference had several good friends speaking: Aleyda Solis, Lukasz Zelezny, Pierre Far and Dawn Anderson and then some new friends Zbigniew Nowicki from Bluerank, Matt Vignieri from Kenshoo, Vicke Cheung from Distilled.  I can not do everyone justice in this post. Rob Weatherhead, Michelle Wilding, Dewi Nawasari.

A Jim Banks quote is in place:

“It feels like they have picked all the speakers with names that are impossible to pronounce”.

Aleyda as always impressive with solid advice on web migration, Pierre Far going deep into GDPR and providing a tracking solution, Blockmetry, that supports it, Dawn Anderson showing us where Voice search is going.

Automation

Lukasz Zelezny did a great little presentation on Social Media: “things you can do tonight”. Hey Lukasz, I know you are tracking mentions, so I am sure you will find this post 😉 I love your tools and tricks on Automation, Social Media and brand monitoring. I too have fallen in love with IFTTT (although I later adopted Zapier) and with Sotrender for Social media monitoring.

I really enjoyed the fact that Lukasz was talking so much about Automation because it was one of the major trends I was going to address later on in my own presentation.

Machine Learning and AI

Zbigniew Nowicki from Bluerank presented a case study for their client Rainbow. I didn’t know Zbigniew before the conference but I knew his company Bluerank very well as they were a double winner at this year’s European Search Awards and also one of the companies I referenced in my own presentation. The case study was about the user journey and attribution in the Travel sector where bluerank have applied a machine learning approach to finding the most important step in the user journey. Fascinating research. Machine learning and AI is a major trend in digital marketing and it was great seeing this addressed from someone else than the big masters of AI, the Gafa, Microsoft and IBM who are traditionally dominant in the field.

 The importance of Research

Vicke Cheung from Distilled, presented the 10 Commandments for the Creative process and what I really liked about her presentation was the emphasis she laid on the Research process. There was a nice quote from Ogilvy about how Research can be boring but that it is extremely important. I found another one which I hadn’t heard before:

Advertising people who ignore research are as dangerous as generals who ignore decodes of enemy signals.

David Ogilvy

I was so into the research phase that I didn’t take down her 10 commandments on paper but I clearly remember the most important message about Ideation: “ideas come from dialogue”, confront them, present them, challenge them.

Of course, agencies doing more research for digital marketing is one of the major trends from my own presentation, which I why I find it so important to stress…

Understanding the User journey

Matt Vignieri from Kenshoo told us a story of his own user journey in the last online purchase he made. He clearly illustrated how you are using different moments, different channels and how you state of mind is different from one step to the next in that journey towards a purchase or a conversion.

Kenshoo is a technology provider that allows you to track user exposure and engagement at various stages of the user journey and I was really happy he emphasized this as he was precisely on one of the major trends as well.

What are the best digital marketers doing that maybe you are not?

My own presentation was named Major trends in Paid Search and was based on research I have done into the best “PPC” entries in this years European Search Awards. In the presentation linked to on slideshare, I am providing a good view of just that.

However, the parts of the presentation I have not put on Slideshare were asking a slightly different question. What are the most advanced digital marketers doing? Well, you have some of the answers in the titles used in this post and some of them in the presentation. From the 24 PPC case studies I analyzed, the pattern that I could see was one of digital marketers constantly adapting to change, research for insights, trying to understand the user journey, trying new things, testing, raising the bar on what they already master by introducing processes, automation and machine learning. For the full story, come to my next conference but for a nice take on it, here is a tweet I liked from AgencyPedro summing it up:

My presentation can be found on slideshare here:

The European Search Conference 2018 was a great experience and I was really happy to get the opportunity to speak there and to discover the  great city of Liverpool.

If you like the content, please follow me on twitter for updates @soanders. It is likely that I push further on this research and publish more insights in the future and I will use Twitter to announce and share.

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To do a little more justice, please find below 3 other presentations on Slideshare:

The SEO guide for successful web migrations by Aleyda Solis: https://www.slideshare.net/aleydasolis/the-seo-guide-for-successful-web-migrations-eusearchcon

10 Commandments to demystifying the creative process by Vicke: https://www.slideshare.net/VickeCheung/the-10-commandments-to-demystifying-the-creative-process-103496955

Voice search and conversation – Challenges and opportunities by Dawn Anderson: https://www.slideshare.net/DawnFitton/voice-search-and-conversation-action-assistive-systems-challenges-opportunities

Web analytics and EU regulations by Pierre Far:
https://www.slideshare.net/PierreFar1/european-search-conference-liverpool-2018

Major Trends in Paid Search by Anders Hjorth: https://www.slideshare.net/secret/KnlwWEmoEkyvdI

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Write-up from Kanuka Digital: https://www.kanukadigital.com/2018/07/european-search-conference/