The key to successfully marketing on Amazon as a Seller is right there in front of your eyes, haven’t you noticed? It is a bit like the forest you can’t see because the trees are blocking the view. Although we tend to imagine that success is ruled by some algorithm we can’t understand, once you realize where your own objectives actually coincide with Amazon’s and learn to work along some its principles of operational excellence, customer obsession and long-term thinking, you will significantly increase your chances of success on the marketplace.

What Amazon success looks like.

As a merchant having set up your account as a Seller on the marketplace, your main interface with Amazon is “Seller Central”. It is your dashboard and your management interface. Did you realize that the components of the dashboard are direct indications of what Amazon considers the dimensions of your success? Let’s have a look at it in depth.

The seller central interface is directly telling us what is important and what we can work on. The top line dashboard shows the number of orders, sales today, buyer messages, buy box wins, money earned, inventory score, (the IPI: Inventory Performance Index) and the effect of your promotions. To sum it up, Amazon is telling us what matters: sales, customers, competitiveness, balance of earnings (sales minus cost of advertising) and stock.

Rephrasing those provides us with the following 5 key points to Amazon success:

• Maximizing sales
• Winning the buy box
• Minimizing stock (managing the IPI)
• Providing excellent customer service
• Controlling the ACOS (Advertising Cost of Sales)

Most of them are not things you just fix once and for all. The Amazon game is a long-term project where you will have to constantly monitor and maintain your key ratios. A winning Amazon marketing strategy is one in which the ratios are stable and gradually improving all the time.

Flow-and-grow rather than Stop-and-Go

One of the worst things that can happen to your account is if it goes into a stop and go mode. I have seen this way far too often working with Amazon Sellers over the past few years. It goes something like this:

1. Get the product listings up
2. Put some stock in
3. Push promotions and advertising
4. Get sales going
5. Run out of stock
6. Lose the buy box
7. Panic
8. Restock
9. Return to 3)

In a stop and go scenario, the seller needs to restart the marketing machine every time products have run out of stock. Bad for users, bad for Amazon, bad for you.

Let’s embark instead on a flow and grow strategy where the aim is to create continuous improvement by working on each of the 5 success points one by one, as we explore below.

Maximizing sales

Of course, you want to maximize your sales, everybody does. But have you realized that Amazon also wants you to? Sales velocity of a product is one of the key signals Amazon works with. It helps the platform propose the best performing products and thereby maximize its own sales. This also typically has a positive impact on your IPI because your days-in-stock will be lower.

At the level of a merchant, this focus on best-sellers and maximized sales has some concrete implications. Let’s say you have a catalogue of 10 products and one of them has much higher sales than the others. Your best strategy will be to enhance advertising on your best-seller to make it sell even more. On your less performing products you should focus on content optimization and only use advertising defensively until you get some kind of traction.

Bet on your best products.

Winning the buy box

In order to sell your products, they need to appear in the “Buy Box” as often as possible. This is something end-users on Amazon don’t realize: the product page does not belong to the Seller, there can be several different Sellers proposing the exact same products with different prices and delivery settings. At the time of an end-user visit, Amazon will decide which Seller will “win the buy box”. The main determining factor is the price.

The illustration below shows you where to find the buy box on the right-hand side of a product detail page allowing you to buy a product in a single click. Being a marketplace, Amazon can have a number of different sellers distribute the same product. But there is only one product detail page for each ASIN (product code), and on that page, only one of the sellers is put forward in the buy box.

Make that be you!

The buy box is indicated by the red rectangle and the arrow points to the winner of the buy box on this product page.
Source: Amazon.co.uk

Amazon makes the best performing seller appear, so the end-user doesn’t have to make that decision. Amazon’s objective with this exercise is to provide an excellent user experience by selecting the best provider of a product. This arbitrage made in real time is of course executed by an algorithm, and the signals it takes into account are stock level, price ranking, sales history, past user experience, past delivery performance. Obviously, the capability to deliver to your location is the very first filter that is applied. Be in stock, be distributable.

By having the right price, a low return rate and a compelling product listing, you increase your chances of winning the buy box. Optimizing product listings serves more than one purpose: it helps the user in the buying process and it helps the Amazon algorithm understand what keyword searches the product should appear on.

Minimizing stock (but maximizing IPI)

On the Seller Central dashboard, Amazon shows sellers their IPI score, the Inventory Performance Index. This score gauges the way inventory is managed over time by sellers using FBA (Fulfillment by Amazon), and therefore have inventory in Amazon warehouses. Merchants of course pay for the warehouse occupation, so that is an interesting revenue source for Amazon, right?

No, wrong.

Amazon charges for your inventory, but if it could carry stock only on the products which make a margin when you sell, it would earn more. Additionally, Amazon has a huge storage challenge due to the physical and invariable nature of warehouses and its strong growth. It is in both Amazons and your interest to optimize inventory to only occupy space for goods that are sold frequently. To further optimize its warehouse resources, Amazon has even created a new mechanism to put warehouse space on auction.

Amazon describes IPI, the Inventory Performance Index as a metric for how efficient and productively Sellers manage their FBA inventory via a number of factors. The key factors it measures are the following (Source: Amazon):

• Avoiding excess and aged inventory.
• Long-term storage fees.
• Speed at fixing listing problems (that immobilize stock)
• Right levels of stock of popular products

Most sellers on Amazon will appreciate the IPI as a score for how they are doing. A stop-and-go account will have a low IPI and it will take time to rebuild it after having been out of stock. What most sellers don’t realize is, that it is one of the quality signals that Amazon uses. It can influence whether you win the buy box and may even have an impact on your ranking in search results.

Additionally, the IPI can be a cost saver. You pay for the amount of stock and the time it stays in Amazon warehouses. Amazon inventory space is never unlimited and non-moving inventory is not efficient for anybody. Amazon charges for it but also penalizes non-efficient stock management. Your objective is to be lean and efficient. Another objective that serves both you, Amazon and the end-user.

Make your stock management lean.

Providing excellent customer service

Amazon is obsessed with the user experience. It doesn’t do surveys of user satisfaction, though. Instead, it obsessively measures any signal that can be interpreted as a success parameter for the user experience. User reviews and ratings, return rates, customer service requests, speed of dispute resolution.

Source: Amazon DSP training material. https://learningconsole.amazonadvertising.com/

The best way to influence those signals is simply to strive for excellence. But providing excellent customer service is both challenging and costly. It requires preparation, processes for problem resolution, fast intervention and sometimes generous return or refunding conditions.

So, will that investment pay off? Odds are it will help you win the buy box which can contribute to more sales on Amazon. It can also spill-over into your ratings and reviews and help boost conversion. It might even enhance your customer care in other distribution channels. So, don’t neglect or underprioritize customer service, it is one of the keys to success of your business in the long run, both on Amazon and beyond.

Make your clients happy.

Controlling the ACOS

Marketing your products on Amazon is practically impossible without advertising. “Products that sell themselves” is a concept of a distant past, don’t fall for it, however proud you are of your product development or research.

On Amazon, you don’t win if you don’t play the advertising game.

When you are just starting to sell on Amazon, you will need to invest a higher proportion of your sales in advertising. The ACOS at the outset might even be too high for you to turn a profit.

ACOS means Advertising Cost of Sales and is a metric primarily used in Amazon marketing. In other advertising we usually use the inverted value of ACOS, which is the ROAS: Return on Ad Spend. Both metrics score how much value you are getting out of your advertising. The reason for the adoption of ACOS by Amazon is probably found in the way Seller relationships are structured: a merchant sells on the platform and thus earns a balance to be paid by Amazon. The seller can use a proportion of that balance on advertising and will only receive the difference between total sales and advertising and other fees on its bank account.

As you learn from your advertising investment and from the outcomes of your campaigns, you can optimize accordingly to reduce investment for the same result or increase sales with the same budget. This will mean your ACOS goes down, but more importantly, your sales velocity goes up. At this stage, you should experience both an improvement in your buy box ratio and a rise in organic sales. The flow is kicking in. Amazon is more likely to show your product on relevant queries in its search results if you have ramped up your sales.

This mindset of investing to learn what works – making small bets all the time – is a great way to grow your account. You can bet on keyword targeting, on competitive products, on complementary products on past buyers, on non-buying visitors to your product pages. All of these can be performed inside the Amazon Sponsored Ads platform, and if you max out on that platform, there will be plenty more bets to do on the Amazon DSP, where targeting options are supercharged providing almost endless optimization levers.

But before we get carried away with all the potential customers, let’s remember that a high ACOS won’t be sustainable in the long run. In order to earn money a company generates margins on the sale of its products. The margin is the difference between the sales price, the cost of goods sold (COGS) and the costs of marketing. Gradually taking the ACOS down to a sustainable level while maintaining sales growth is the key to growing your account.

In reality, however, a much better measure of success is to take a wider view of your performance by looking at total ACOS (or tACOS/Tacos, as it is often called). Total ACOS better takes the derived benefits from advertising into account (more organic sales) and is a better measure of your success.

Optimize your advertising to reach a sustainable ACOS, then expand.

Position your products, then invest to learn and grow for the long run

As your product flows and your sales grow, you will need to maintain your level of customer service and your control of efficient stock levels. Remember, you are in it for the long haul. Your advertising bets will show you how and where to develop your account further and while this iterative process  can be long, it can also put your business on track to conquering a market at a pace of 10, 15 or even 25% growth per month until you reach you market potential.

Being impeccable on price level, customer service and stock, and having faith in your strategy could steer your business to unprecedented heights. And the dashboard for your performance is right in front of your eyes in Amazon’s Seller central.

The Social Commerce Dream

Social Commerce is the dream of impulse buying on digital media come real. Careless, flawless, and not least frictionless shopping on mobile, tablet, surface and yet-to-be-invented digital interaction devices with augmented reality. You may agree that we are still a bit far from it in 2021, or perhaps you are one of the pioneering consumers trying out every new way of shopping available.

With social media, brands can interact directly with consumers. So, marketing has become interactive, the customer voice has become audible, and social commerce could have the power to make shopping great again.

What is social commerce?

The concept of Social Commerce was coined by Yahoo back in 2005. It represents the activation of a purchase behaviour triggered by social media interactions. But Yahoo couldn’t make it work, and more than 16 years later, it is still looking for its final form. Ecommerce first emerged out of dusty distance-buying post-order catalogues. Its first embodiment on the internet was text-rich, image-poor and devote of any emotional dimension. In a parallel trend of comparison shopping, rational buying became the default for internet shopping and deals-sites were the most fun places around.

In recent years, the internet has become more commercial, and by projection both more fun and more superficial. Social media helped make a shift away from human-to-machine relations and back to human-to-human relations. At least we got that far. Emojis conquered text messages crying out loud, that “emotions are back”. 📢❤💥

Perhaps these are indications that full-scale social commerce is actually possible despite its long journey in the dark.

What features will make social commerce successful?

The features of social commerce allow for a wholesome social experience within in a full ecommerce journey. We propose to define its components as the following list of commerce-enabling elements:

• A product catalogue (also called a product feed)
• A product selection and check-out feature
• Peer-to-peer (social) communications related to products and services
• Influencer integration
• Live video
• Behaviour-based ad targeting
• Shopping enablement in rich media (such as product tagging in images or video)
• Reviews, ratings
• Recommendations
• Fulfillment
• Client services

Social commerce today emerges from two different horizons: On the one hand, you have the social media-enabled ecommerce into which Amazon falls. And on the other hand, you have the ecommerce-enabled social media such as Instagram and the Facebook Shop. Let’s have a look at these species in more detail.

Social-media enabled ecommerce

Most ecommerce platforms integrate a number of the elements we mentioned, but Amazon is the most advanced social media-enabled ecommerce model with reviews and ratings, peer recommendations and “people also bought” as driving elements. We can also put Etsy, Vinted and Shein in that category. To take the example of Amazon, it is pushing further into social media and hoisting itself up the funnel with things like the following:

• Amazon posts: social posts on “brand stores” and now coming to product detail pages
• Influencer integrations: activating the ecommerce dimension of influencer partnerships by allowing them to build a store front directly on Amazon with products from their partners
• Live commerce: live video product presentations of products on Amazon Live. Around the clock Shoppingtainment.

Where Amazon is still very much at the end of the purchase journey for most users, it is trying to build a more entertaining user journey opening up for upsells and impulse buys. It’s social gaming platform Twitch may come to play an important role in the set-up moving forward. The strongest element in Amazon’s social commerce play is clearly the Live commerce initiative. It feels like the return of TV Shopping and merchants are flocking to the opportunity to present their products in a live stream on the platform. Build more awareness, give their products a more humane touch, show the founders, reach new audiences, nudge users further towards the purchase. Real humans, real emotions, real persuasion.

Ecommerce-enabled social media

On the other extreme of the spectrum, Pinterest and Instagram have long been considered the most advanced social commerce players. With slowing user growth, it has become essential to monetize their audiences more strongly in order to survive, and ecommerce seems like a much more powerful economic model than advertising.

Instagram has the power to recommend fashion items that make people buy. At least that is the case for Andreas Reiffen, founder of Crealytics and heavy internet users. Where traditional commerce was always based on the location, location, location paradigm whereby the location of a business and its flow of traffic was determining for its’ success, the success parameter for social commerce could be closer related to the quality of the recommendation.

Instagram’s Mothership, Facebook has picked up the challenge in a serious manner with Facebook Shops, a new commerce-oriented solution after their Places and Marketplace. One of the strongest motivators for advertising spend being ecommerce, it is crucial for Facebook to make the connection, especially in a world where cross-platform data integration becomes increasingly difficult (read more about the battle of the cookies here). The impact of advertising higher up the funnel is becoming more difficult to measure and prove.

The most significant step for Facebook Shops is the integration of a payment solution which is already operational in the US market. This will allow for an end-to-end shopping experience from discovery to purchase without leaving the platform. It also opens up for an interesting opportunity: A Facebook Shop with Amazon fulfillment at the back end (combining a Facebook Shop with payment and an Amazon Multi-Channel Fulfillment solution). Ecommerce without a webshop, who would have expected that?

And let’s not forget Snapchat and TikTok. TikTok is building out its advertising offering and is already integrating shopping functionality into the mix. TikTok Shopping, however, is mainly an integration with Shopify enabling for a simple pass-through from the social media to the shop. It looks like social commerce-enablement is becoming a mainstream feature for all platforms. Snapchat has long been integrating its offering with ecommerce solutions and has a similar force of persuasion to TikTok among its users. Snapchats social commerce case studies are an interesting read. Its main tool for ecommerce enablement is a deeplinking feature for linking ads to shops. For younger audiences, these platforms have an enormous persuasion power, but the ecommerce-enablement still requires jumping to another channel.

Ecommerce everywhere

Over at Google, there is pondering as well. Already three years ago, Google went on a mission to provide “shopping everywhere”. I called it an Ozone-approach to shopping (ozone is a variety of oxygen present everywhere around us in the air and with the interesting characteristic that too high doses can be lethal to human beings).

The ozone initiative aimed to provide ecommerce activation in all of Google’s media channels. In search marketing it is already present via Google Shopping and product ads which appear in an integrated manner into search results. But Google is pushing this further with a purchase button and an integration with Google Pay. I call it the Google Buy button although it appears to have a less Amazon-like name in Google documentation.

It is also working on an integration of a purchase function inside videos on YouTube and in images. The approach is similar to the tags Instagram has enabled in its images to link to a product page, but it is reasonable to assume that Google might push this further via image recognition and propose purchases of practically anything you see.

There is an app for it

But what if it all ended up in an app instead. With the open internet being closed up and user journeys more restricted, the place to be is in an app. The superapp phenomenon is expanding beyond China, where WeChat has always been the app to offer everything: Uber, Paypal, Spotify, Messenger, eh I mean WeChat transport, WeChat payment, WeChat Music, WeChat just chat etc.

Superapps are social media by definition and some are natively ecommerce enabled. Perhaps social commerce is already here.

Social Commerce Champions

Taking a first look at the various contenders to the title of social commerce champion and giving them a first rough rating on the features listed at the beginning of the article, the top contenders seem to be Amazon, Instagram (Facebook) and Google. The triopoly of digital advertising are seriously addressing this.

Rough rating of the main emerging platforms for social commerce. Please disagree and contact the author for improvement 🙂

Get social proof, inspire and reach your audience via ads or influencers

Instagram and the Facebook Shop seem like interesting places to go in 2021. For ecommerce players strongly anchored in Amazon, there is social turn to take and a live commerce opportunity to seize where available (US so far). The key will be to understand end users better and engage them with content earlier in the user journey. For brands with little ecommerce penetration, it will be about learning how to drive users to the sale and to take the purchase and fulfilment experience into consideration. An impulse-buy with a 7 day deliver span may not be a viable solution for social commerce. Social commerce is fast, fluid, frictionless and fulfilling.

And in the future, augmented reality may allow for immersive experiences merging the online and offline user experience and creating an entertaining and fulfilling user experience. Facebook heading for the Metaverse and Snapchat activating Augmented Reality in its campaigns, may be signs of an emerging social commerce paradigm.

Holisitic Optimization of Digital Marketing for Ecommerce

If you are spending less than 8% of your sales on advertising, you may be underspending! Digital Advertising is driven by Ecommerce. And perhaps a little by branding, which is financed by commerce  too. Global Ecommerce was over 4 trillion dollars in 2020 (statista). Comparatively speaking, digital advertising is a midget, at 330 billion. So, global digital advertising as a proportion of global ecommerce is 8%. There is your benchmark, but how should you spend your advertising budget?

Spending where it works

Wanamaker famously said that one half of advertising spend is wasted, the trouble being that you don’t know which half. Fortunately, we are now in the world of digital advertising where everything is measurable, right? If only it were that easy. As we have undercovered in the Digital Marketing Report, all marketing decisions are taken on the basis of partial data: incomplete, unreliable, unshared, adblocked, webproxied, wrongly attributed. All digital marketers know this, most advertisers too, the majority of end-users don’t. “When I enter information into a website, why should it be shared with all those other sites?” – well it isn’t. Apple’s current advertising is about removing all the other platforms’ partial data collection so that only Apple can monetize that data. Logical movement of troops in the what we call the Data Wars, but not motivated by Apple wanting to protect it’s users, in my opinion.

When marketers look at data from the big marketing platforms, there can be biais in the interfaces too. Did you know that Google analytics shows “sampled results” over a certain threshold of data volume: you see a simulation of what data trend is in your activity, not real data. Explain that to your CFO, will you? Newer concepts such as “data-driven attribution” and “modeled conversions” are pushing in the same direction of predicted data rather than real data.

And most platforms are excellent at pushing their collection of packaged data to marketers. The big platforms are marketing data to their clients, the marketers, using great packaging, promotional outreach, gamification.  Dear marketer, did you not know realize that it is you the target audience?

Digital media spend is biaised to promotion

The most reliable data, is found when a marketing operation is carried out exclusively on one platform, and when the path between product discovery and the final purchase is short and uncomplicated. The longer the path gets and the more complex the decision-taking, the less reliable the data tends to be.

Unsurprisingly therefore, Amazon is booming. It is concentrated on the final path to purchase. Also unsurprising, retargeting works really well. Both are close to the measurement point for your sales KPI. And a well-known observation from search marketers, “brand keywords convert”: first users search for category words and when they have found the brand they want to buy from, they search for the brand name. For this reasons, brand keywords are more often attributed the sale.

This challenge of “attribution” has a huge impact on the way budgets are engaged. The data is biased, and subsequently, so are budgets.

In many cases, the data doesn’t tell the story of what happened before the final conclusive action that made a user purchase. Whether this was other keywords that were searched for, or how the person you retarget was identified in the first place. If you really want to optimize your marketing investment, you must look at your entire marketing and communications operation holistically from end-to-end.

Understanding the user journey

Heard of the “funnel” for digital advertising? It was invented in 1898 so predates most digital marketing by a century. Kind of old and outdated, right? Or maybe it isn’t.

The reference concept behind the funnel is the AIDA model. It is a “hierarchy of effects” model in which users are described as moving through stages before buying a product. Awareness, Interest, Desire, Action. The funnel model is for digital marketers, what the “economic man” model is for economists.  The economic man model explains that people make rational purchase decisions and will be more likely to buy a cheaper product than a higher priced similar product.

The funnel model, explains how a user goes through various stages before coming to a decision to buy a product, including becoming aware of the products’ existence, understanding it’s characteristics and finally acting on an impulse to buy it.

Marketers instrumentalize the funnel model to create “awareness” around a product to target audiences, then provide them all the product information they need in order to appreciate and consider buying it. This drive through the funnel is designed to persuade and eventually incite users to buy the product. Here is a more detailed walk-through of digital marketing mechanisms and the stages of the user journey.

Opportunistic marketing

In the TV age, there were few but powerful marketing channels and few but powerful distribution systems. Optimization cycles were long. Study the market, build a creative concept, produce assets, run the campaign flight, stock up in distribution channels, analyse communication and sales results post-campaign. Marketing was a high budget, high risk and high returns business.

In the digital age, marketing channels are fragmented and fast. So are distribution channels. And user behaviour can be erratic too. It has become less risky but more confusing to be a marketer. You can trial and error, you can seize opportunities as they arise. If you are doing no marketing whatsoever, your first action can drive amazing results, and subsequent additional actions can have seemingly no effect. Worse, you can run a number of parallel marketing activities and find conflicting conclusions in the data sets.

What happens when you optimize holistically?

Because of this opportunistic marketing behaviour, the bigger picture is often lost of sight. Applying a funnel view of marketing activities can help identify bottle necks or explain why performance diminishes over time. The key to holistic optimization is to keep an eye on your total investment and your total outcome. It doesn’t have to be 8%, it really depends on what is profitable for your business. It also depends on your goals: if you want to win more marketshare, you should probably spend more than your competitors. If you have a strong brand, perhaps you can get away with spending less to maintain your market share.

With your eyes fixed on that overall performance, you can now look into individual channels and opportunities. It is quite common to see advertisers spend a lot of their budget at the bottom of the funnel, because it is measurable and gives the illusion of high performance. But in some cases, bottom of funnel budgets are cannibalising what we call “organic” performance. You put an ad up and it drove the sales, but the user was going to buy the product anyway. And sometimes you can end up bidding up your own marketing in other channels or perhaps your distributors’ marketing costs for selling your products.

If you think this may be the case in your marketing set-up, try moving some of your budget up the funnel. Reach your target audiences on facebook, target category keywords in search and promote your brand on Amazon. This can stimulate overall performance and allow you to generate better results holistically.

Don’t trust channel-specific performance

One of my favourite films is Minority Report. It depicits a society where truth is established in a closed room where three extraordinary beings can see what will happen in the future. Except, sometimes they don’t agree, and one of them will disagree to generate a minority report.

This can be compared to marketing reports emanating from one marketing channel. All the data isn’t there, but the truth that emerges seems compelling, whereas in reality it is incomplete and sometimes even false.

Everything is measurable in digital marketing, except for all the incomplete data, the biaised data, and the fact that advertising platforms are marketing their product to the advertiser without disclosing their minority reports.

Only a holistic view of all marketing activities can help you learn what balance of media spend and channels works for your brand, so check with your CFO before signing off on the next advertising opportunity you are presented with, and take a chance on channels that make sens from a funnel perspective. They may be more inclined to drives results in the long run.

Native Ecommerce

Native Ecommerce will power the shopping craze of the 2020’s. Watch a film and be attracted by a dress the actress is wearing. Pause, click, purchase right there, then resume your film. See a designer watch in an influencers’ feed on Instagram, click, purchase and scroll along. Watch a start-up founders’ live demonstration of an innovative product and buy it on the spot. Native Ecommerce is the future of impulse buying. Making the user experience great again.

Native ecommerce is when then entire shopping process from product discovery to purchase and checkout happens natively on the same platform. Such a process is already native to Amazon, but in most other online purchase journeys online, you still jump to another platform when it comes to the final purchase of a product. This disrupts the user journey, puts tracking off and represents a monetization loss for the platform you left.

Over the past few years, industry observers have described a trend known as social commerce, whereby more and more of the purchase journey is integrated into social media platforms such as Instagram and Pinterest. Social commerce, however, is no longer the only type of native ecommerce on the rise. Native ecommerce is coming to most of your existing online platforms, changing the nature of the online purchasing journey and making ecommerce into a feature applicable to any existing platform. Facebook shops are accepting payment and Google now has a buy button which we will find in videos on YoutTube, on it’s shopping experience and even in search results. Every online platform is working to complete its’ range of features for online shopping so that you no longer have to click through to an ecommerce site or go over to Amazon to buy products. Stay put, native ecommerce is coming to you making shopping a feature of any online experience.

The Trinet and the compartmentalisation of the internet

Some will consider this trend of compartmentalisation of the internet a disturbing trend. It certainly wasn’t the way the internet was conceived to be. With the strong growth of Apple, Google and Facebook and the walled gardens they raise around their users, the internet of the 2010’s started to be called the trinet, as each of the three players were pretty much building their own internet and raising barriers around it to avoid users and data to flow between them. In these Data Wars, the end user has a seamless experience within each of those walled gardens, and an inconsistent one when the boundaries are crossed which is perfectly natural user behaviour. The marketers nightmare.

When I launch a Facebook or LinkedIn page, I am much less concerned about feeling blind. I am more concerned of being misled by the stats I receive from the platforms and not receiving the ones I am interested in. The first time business owners are confronted with the reality of their Facebook page can be a bit awkward. They have heard so much about all the data Facebook holds on users. Didn’t Cambridge Analytica have 5000 data points on each user thanks to data collected via Facebook? Then how come you can’t even know who the  fans of your business page are, and less so contact them?

You can access the data for marketing purposes. Show advertising to all your fans, to all the fans of your fans, to people in specific demographics, geographic segments, those interested in footwear, or those who are likely to buy insurance. Facebook has the most powerful targeting machine on the internet due to that user data, but you don’t get it, you can only rent it, even if it was built with your own contribution.

In the 2020’ies the compartmentalisation is much broader than a trinet. Most online platforms are using similar same techniques of impeding user leaks and blocking data flows. Amazon, Microsoft, Snapchat, TikTok. Each platform will penalize the distribution of content taking the users outside of their platforms and will impede most tracking of activity from any other platforms.

How tracking and data restrictions are reinforcing this trend

When I launch a new website I always feel entirely blind until an analytics tool such as Google Analytics is active. Imagine you opened a fashion retail shop and you would stand in the middle of the shop and not be able to see any of your visitors nor hear when the door opens. The only thing you could know would be when the till rings a new sale. People have come to hate cookies across the board but sometimes miss some of the essential things they help us do. Please don’t remove first party cookies! Please don’t block all cookies when you go to a website. Don’t prick out the eyes of the store owner!

On the expanded trinet, platforms don’t allow you to do any tracking on their own. You have no raw data, can’t extract it, can’t consolidate with any other platform data you may have. Don’t say you didn’t know, it was in the terms and conditions you accepted when you created your page!

If marketers could get their right, they would ask for tags to be placed on every page of their brand’s presence. These tags would allow them to understand how their marketing impacts end-users, and especially allow them to use automated optimization allowing for advertising to be efficient. But those signals are absent from any cross-platform advertising, except traffic sent to your own website.

The end of cookies is one of the big topics in our digital marketing report.

The opportunity for online merchants

Whereas marketers are struggling with this segmentation of the internet into closed circuits, it might actually provide an opportunity for online merchants because of the desire of each of these platforms to provide all the functionality necessary to complete a purchase.

It is already quite common to have an ecommerce website and an Amazon store in parallel. Merchants are managing the challenge of maintaining a catalogue in two places and driving traffic and optimizing each of them.

In order for such a dual approach to work, a number of opportunities present themselves to merchants:

• Maintain a single source of catalogue, for example by using a PIM (Product Information Management) tool, and upload the catalogue to each ecommerce channel.
• Optimize inventory and fulfillment, for example by using MCF (Multi-Channel Fulfillment) from Amazon whereby you hold one FBA inventory (Fulfillment by Amazon) and pass orders from other channels to Amazon

Being an omnimerchant is not something reserved for large ecommerce operations. The tools and processes are constantly improving to make this possible.

A blueprint for operating native ecommerce

In a small ecommerce set-up, a catalogue can be managed via an excel file. Perhaps taking a first step further and making this a shared online version would be a great idea. Google Sheets can do wonders. With one single source of the catalogue, each native ecommerce channel will be fed the same information.

For large catalogues, a product information management tools becomes necessary. It can maintain the latest product information and ensure consistency between channels.

For driving traffic to each ecommerce channel, the job of the marketer suddenly became much easier. For a Facebook shop, advertise on Facebook and Instagram, for a Google Shopping set-up advertise on YouTube and Google, for an Amazon store, no need to look for external traffic.

One of the big challenges for ecommerce has always been the checkout. This is where a large part of the current revolution is taking place. Google and Facebook are starting to do the checkout. Facebook probably even has its own currency on the roadmap. Other players such as TikTok, may move in the same direction dragging Pinterest and Snapchat with them. Payment on Google and Facebook is currently only possible in the US market, and in other markets, the solution may be an ecommerce solution such as Shopify allowing you to run your own ecommerce website and provide the checkout for Facebook and Google operations.

In the future, however, an ecommerce operation may not need a site. This changes the nature of a merchants’ infrastructure and budgeting.

Remains to be see whether agile ecommerce corresponds to what users want

The infrastructure for the omnimerchant is here. All the big marketing platforms are enabling native commerce and raising their walled gardens. The only ones who weren’t asked their opinion were the end-users. Do you really want to buy that dress in an instant while you are watching a film? There is an opposite trend of buying less, recyclying and sharing. Of giving it a good think before you do your purchase in order to not overconsume. And many users cherish their freedom, doing what they can to not be locked into the user journey the marketing platforms laid out for them.

Native ecommerce is definitely a trend, and it can bring efficiency to merchants, and consistency to marketing operations. But whether users will go all the way remains to be seen.

Johnny was weary. He felt caught between countering forces demanding his allegiance. He had fought in the Battle of the Browser and knew that the long-term consequences of which side he chose to support could be important. It was still the same war the giants were fighting. The War of Data. The giants had an insatiable thirst for more data. They would ingest petabytes of data in one draw and spill it into their inner lakes of data patterns, enriching here and there, invalidating in other parts. But having acquired the data once was not enough, they constantly needed fresh data to ensure the value of the data they already had.

In the Battle of the Browser, it had been the soft components which had been important to win subjects over to their cause, but in the Battle of the Cookies, it was privacy that was at stake. The White front were eloquently addressing their subjects describing how they would do anything to protect them and that the Blue front was out to exploit them. The argument was compelling. After all, subjects had grown fearful, like Johnny, of constantly risking cookie attacks, and weary of repeatedly moving through checkpoints to allow or disallow dataflows. It provided them with a feeling of false security.

It was certain giants’ practices of covertly harvesting data in the other giants’ gardens that had triggered the Battle of the Cookies. The White front had adopted a defensive strategy dubbed internally as the antibiotics initiative. They were willing to partially break down and renew their own systems if this remedy could harm the other giants in greater proportion than themselves. Who had the most to lose? Clearly the Blue front. But in reality, removing the cookies didn’t enhance privacy, tracking didn’t go away and the total sum of data would not diminish, only be redistributed. Johnny couldn’t help feeling that was a hypocrite stance.

For a while, Johnny had considered joining the rebel front over at Adblocking, but he feared their leitmotivs too. Who financed them? When they only partially blocked data flows, how were those deals struck? And then he was not ready to wear their special outfits which felt a bit like deprivation of freedom to roam.

The easy choice seemed to reject the Blue front who had been known to greatly surpass their remit in exchange for their wonderful, fun and engaging experiences. They harvested all the data they could and by any means possible. There were rumours of shadow profiles, of master databases, of initiatives influencing presidential elections, even. It was ugly and an abuse of trust.

Johnny felt squeezed between hypocrisy and abusive practices. The digital revolution was far from what he had imagined. It was supposed to bring more freedom, more equality of opportunity, more literacy, more intelligence to all. Instead it was creating a divide, it was becoming compartmentalized and entirely driven by commercial interest. This Cyberspace is not quite the superconsciousness we were expecting to encounter at the end of the journey.

Battle of the Cookies

Apple has released its IOS 14.6 which effectively allows users to disallow third-party cookies on iPhones, Ipads and anywhere the Safari browser is used. Google has announced the phasing out of third-party cookies too. This is despite using them heavily in its own advertising solutions. A new targeting solution based on “cohorts” – groupings of similar profiles – going under the name of FloC is to replace the third-party cookies for Google. Microsoft Advertising on their side is working on a similar alternative named Parakeet. Facebook has the webs’ most advanced targeting engine for advertising which is its sole revenue source. It relies in large part on third-party cookie data in many ways, same as Google, Amazon and the entire digital advertising industry.

Marketers are having great challenges with these platforms. This is not new. And it is not even because of cookies. Ever since Facebook disallowed Google analytics on a company’s page, being able to understand user interactivity across a brands own content across the web is virtually impossible. The issue probably reaches even further back than this barrier between Google and Facebook. Digital marketing platforms are blocking data flows between them.

It is scary for an end-user to discover just how much information these platforms know about them. I have experienced this by showing their Google Ads Settings or Facebook Ads Settings to people during training sessions. And we also had laughs when someone would try to figure out why something they hated was showing as an interest, or why everybody is supposedly interested in American Football and BMW cars if we were to believe those settings. Facebook thinks I like penguins and the River Thames, so we are clearly far from George Orwell’s Big Brother. These platforms don’t share the data and cannot really understand the data they are monetizing. They repackage these partial data views and sell them off to marketers.

Third-party cookies were one of the few ways marketers could build up a richer view of a user journey across the internet. That capability which becomes creepy when it addresses one user or a small user group, is something marketers will no longer have access to. Maybe this is a good thing.

However, the tracking doesn’t go away. Simply the access will now be reserved for these digital marketing platforms themselves to monetize. The battle is not so much about protecting users’ privacy as it is about owning their data for monetization purposes. Clearly not the internet Tim Berners Lee envisaged when he invented the world wide web.

Marketers will survive. They just need to resaddle and rethink the way digital advertising works. Hopefully this will be for the better.

The question remains whether respect of users’ privacy will improve in any way. I am crossing fingers for that while I am expecting cost of digital advertising to go up in coming years.

Driving external traffic into Amazon can be a great paid search strategy in 2021 because the conversion rate is so high, but getting there can feel a bit like sailing through the Bermuda triangle. The compass goes berserk.

Apple’s is also messing with our digital compasses with the IOS 14.6 update, killing off cookies. Have you seen the latest Apple advertising campaign about privacy? It is a fun illustration of the privacy challenge. It is clear to everyone that Apple rids us of all that annoying tracking. “Why don’t you mind your own business?”. The AppleID used everywhere to personalize services in the Apple cloud, clearly isn’t tracking anything, is it?

In reality, the battle over cookies is just another battle in the “data wars” between the large American data-driven platforms who represent such a large part of our connected lives. I always have a laugh when I hear conspiracy theories like “they know everything about us“. Sure they do, Apple knows where you are, Facebook knows what you like, Google knows what you are looking for and Amazon knows what you buy. But they just don’t sit and have tea together and discuss how they can control you. They don’t communicate or share any data. At all. That’s why the compass is off.

Walled Gardens

One of the best metaphors for describing this data impermeability is the “Walled Gardens” metaphor. Each of the platforms is raising walls around its users to prevent them from leaving and to avoid any of their data to escape. Apple is just raising a cookie wall in the current battle.

When you have a website, you can install Google Analytics for free. This gives Google all the data from your website. When you set up a Facebook page, it belongs to Facebook who will give you some nice inroads into the data. It is pretty hard though to actually figure out who is in your Facebook audience. That is not where any privacy issue lies. If you want to actually communicate with your community, you pay Facebook through advertising. And you certainly can’t track any user behaviour when someone came from outside of Facebook.

“People! Can you just stay in one garden at a time, so we can count, please!?”

Why drive to Amazon?

Unfortunately, these end-users that marketers are trying to understand are unruly. They like to surf, to browse and to zap, much to the dismay of the platforms they were just on. One click, one touch, one slider and they are gone. Away to another channel. Did you notice that when you publish a post with a link to your website on Facebook or LinkedIn, it rarely performs as well as if you publish a similar post without the link?

“Please have your audience stay on our platform so we can monetize.”

Pay for the click via advertising and the barriers is gone.

Let’s imagine for a moment that you are an online merchant, and that you can choose only one channel to send your users to. Which one will it be? Your app, your site, your profile page on a social network?

No, you want them to be on your product detail page on Amazon, with your seller account in the “buy box” ready for a one-click sale. Simply because that is the best selling page on the internet for your product.

Amazon is a strong component of any ecommerce strategy. It is one of the main forces of ecommerce worldwide, and the marketplace is growing at a pace of 40% per year. Amazon Advertising is growing at an even higher pace suggesting the advertising spend is actually driving value to advertisers.

For an equal amount of visitors, an Amazon page typically converts much higher than a website. Perhaps twice as high. The service is fast and reliable, it is providing you with all the information you could possibly ask for, and it is backed by the promise of the lowest price and the fastest delivery. Ever. Amazon is obsessed with customer experience, so things will most likely work out quite well when a user purchases there. Hence a higher propensity to buy. A higher conversion rate.

Are you trying to kill my Shopify ecommerce?

“Do you wanna just kill the ecommerce business I am running on Shopify, or what? Amazon converts really well but I have a much higher margin on my direct ecommerce.”

Let’s do some calculations. Let’s say your ecommerce generates 10k in sales per month, your Amazon account generates 25k. You are spending 3k on paid search for 6k sales. Why would anybody send that profitable traffic into Amazon where margin is lower due to fees? If the Amazon channel converts at a rate which is double that of one’s website, those 3k could generate 12k of sales. Even at a 20% increase in costs – 15% referral fee and then some – your money is better invested in a higher converting channel. And a 100% higher conversion rate is not at all uncommon.

In this scenario, your sales increase by at least 6k and your costs by maximum 2,4k. A net benefit of 3.6k which is likely to increase further due to the organic boost which is likely to happen on Amazon. The higher the sales velocity, the higher you rank in Amazon search results and the more additional sales you generate. The net win could be 5-6k due to the shift to an Drive-to-Amazon strategy.

Downside of driving traffic to Amazon

Many years ago I remember having a client who only sold on Amazon. Running search and social media campaigns for the client was really frustrating because there was no data feedback. We could only control and optimize the click-through-rate for our campaigns and were dependent on the client to feedback on the effectiveness of a full campaign. As a real-time marketer, having a client sign off budget without proof of conversion was a new experience. We had no control on where we were sending the traffic, but as the client asked for more, the bottom line must have worked out for them.

It is common practice for advertising platforms to rely on conversion pixels. These are composed of a few lines of code which are placed on the pages where your advertising traffic is sent. If you send traffic from Facebook to a Shopify site, you will insert pixels which track key events such as a purchase. This communication feedback, allows the advertising platform to collect data on which ad created an event and at what time. And in turn, it allows the marketer or an algorithm to optimize the advertising campaign towards the desired actions. Amazon, of course, does not allow an advertiser to insert a pixel into it’s site. Neither does Facebook, Instagram or any other online platform for that matter.

On Amazon, a part of the solution to this problem is to use a tool called Amazon Attribution which allows you to tag external traffic when it arrives in the platform. The tool is still in beta and clearly in it’s infancy, difficult to set up and is fairly true to the “last-click” attribution model Amazon mostly uses. If a visitor comes from Google or Facebook into Amazon and click on an ad inside the platform before buying a product, the original source of the traffic will not be counted. If it does attribute it to the external traffic, however, you will be able to know from which ad group or keyword the conversion originated and thereby refine your campaigns.

There are obviously some more reasons for not driving traffic to Amazon: you pay referral fees (although it was actually you just referring that sale), you won’t get your clients email address and thus cannot address them directly for recurring sales. Additionally, you actually risk referring your prospects to competitors inside Amazon if they change their mind after the click. So, perhaps this is not a long-term strategy as you are simply increasing your platform dependency.

How to set up a drive-to-Amazon campaign

If you are used to running Google Ads campaigns, there is nothing new in the setup required for an Amazon campaign, but there is some preparation to do in your Amazon Seller account in order to detect the impact of your campaign. Going through the steps below should put you in a good place.

1. Prepare the set-up on the Amazon side

On the Amazon side, you should open a free Amazon Attribution account for tracking purposes. In order to qualify you must have brand registry. You should also make sure that you have access to the brand analytics report which can provide valuable overall insights for your Amazon account. If you are using a tools such as Helium10 you can track keyword rankings. Any keyword tracker will do, but make sure you have one activated. Also find a sales rank tracker such as Keepa which will allow you to estimate indirect effects of your campaign.

2. Keyword definitions

Now extract keywords from your Amazon Sponsored Product Ads and compare with your existing Google search keywords if you have any. We are assuming you are already using Amazon Sponsored Ads for your account. If not, start there rather than driving external traffic to your products! On the Google Ads side, spend some time charting Amazon’s own activity in your keyword territory by using the Auction Insights reports in Google Ads. Steer clear of keywords Amazon is already bidding on. No reason to bid them up.

3. Specific Google Ads set up

Now set up specific ad groups and keywords for your Drive-to-Amazon campaign. Once they are ready to deliver you will be able to pause the old campaign without ruining its history in case you need to reactivate at some point. The Drive-to-Amazon will be void of any conversion data and can’t be managed with automated bid strategies targeting conversion.

4. Campaign destination within Amazon

Within Amazon, you have various options for sending traffic. For product names and any brand-related terms you should send the traffic directly to product detail pages. For category terms, the brand store can be a better destination. There is also an option to create specific landing pages for your campaign. This could improve your measurability.

5. Measuring and evaluating

Welcome to the Bermuda triangle. Every time you change campaign parameters you need to wait for a while before you can see a consistent pattern of anything. Steer you campaign on the basis of click-through rate at least for a week and check your auction insights for overlap with Amazon every day. After a week (or longer if you have a long sales process), the main metrics to look at are total advertising cost of sales and sales growth. Amazon Attribution won’t show you the full scale of impact you generate. You may see lower attributed sales than expected but higher overall sales. Take the evolution of search rank positions into account to see if you are generating more organic sales.

How about we do that Kessel run in 12 parsecs?

The Millenium Falcon in Star Wars is the fastest ship in the Galaxy, right? But when Han Solo does the run to Kessel in 12 parsecs, it isn’t about speed, it was about taking a short-cut through the deadly fog surrounding the planet. Yeah, love Star Wars.

Driving traffic to Amazon is a short-cut to conversion, and thinking about the strategy holistically, there are many cases in which this is better for the end-user although you generate less margin. If it is right for the user, it must be good strategy.

For merchants building their e-commerce site, it must be terribly frustrating to adopt, and for marketers it can be a challenging path. You will need to prepare your campaign in detail, use manual optimization and find the right direction by monitoring a variety of indicators all the while not trusting everything the data tells you.

And finally, the Drive-to-Amazon is contrary to the overall objective of many marketers in 2021, namely that of building more and higher quality first party data. Nevertheless, the Drive-to-Amazon strategy can be a real kickstarter giving momentum to both you e-commerce and your Amazon activity. It is deeply rooted in an approach of enhancing your best performing channel and your best performing assets, it has the capability of multiplying your sales and at the same time giving users a better experience and provide learnings in the process. We are down to the essence of what Amazon provides: a shaky ride for marketers capable of generating outstanding short term results! You should try it!

Growth of the triopoly

After every end of quarter, we feast on quarterly reports showing just how massive growth these three giants are consistently creating. The illustration below show the quarterly evolution of each of the three players’ advertising revenues. They peak in Q4 as advertising traces the end of year ecommerce peak. Therein lies the explanation for the success of these platforms – they drive sales. And they are able to demonstrate it in their reporting.

The only exception to the Q4 peak happened during the pandemic in 2020 where we had a “christmas in May” effect where consumers were in lockdown, spent hours behind their screens and started on accelerated their online buying.

Amazon Advertising grows faster

Amazon Advertising now represents 9% of the Triopoly and catches up a little more on its’ competitors for every year that passes. From a mere 3% of the triopoly in 2017 to 6% in 2018 and 2019 and now at 9%. Advertising spend picks up in Q4 as it traces the end of year ecommerce peak.

The largest share of Amazon Advertising is shown inside the marketplace itself. When ecommerce peaks, there is more ad inventory, and when ecommerce sales peak, so do advertising investments. Amazon Advertising grew at a staggering 77% in Q1 2021 compared to 2020. The ecommerce platform itself grew at around 40% and the advertising solution has shown its capability for generating a rate of growth well above the platform growth. This is easy to visualize when you look at the correlation between ecommerce and ads sales for Amazon.

Google has restored its health

In Q2 of 2020, Google Ads experienced its only ever negative growth in revenue for a quarter compared to the previous. However, the 32% growth YoY of Q1 of 2021 erases that dip. This growth level is the highest Google has seen since 2017.

Facebook advertising hits a 46% growth YoY in 2021, also much higher in recent years. This level of growth hasn’t been seen in Facebook since Q1 of 2018.

Digital maturity, hope and economic growth

The year of the pandemic was 2020. The world came to a halt. We stopped moving our feet and accelerated our online usage. For better and for worse. During that year, businesses accelerated their digital transformation like never before. Online shopping boomed like never before – it X-mas in May as we were bored, or replacing social interaction with online shopping. I think I ate disproportionately more chocolate than I used too out of self-pity. Or maybe that was when I started exploring exotic cocktails before dinner.

Now that we are expecting the end of the pandemic, businesses are investing, consumers have higer hopes, and we are expecting economic growth to take off and maybe recapture some of the lost growth of 2020. All of these factors are beneficial from an advertising point of view. If this trend confirms itself, we may be in for continued above-normal* advertising growth way further into 2021.

“Above-normal”. What is normal in 2021, anyhow?

Searching for Purpose? Here comes Marketing with Purpose, starring Responsibility, Values and Inclusion

“It starts with Why“, doesn’t it? It explains why Apple and Nike are so successful because they have such a strong mission statement at the core of their business. Simon Sinek explains this brilliantly in his presentations and his books. He presents us with the golden circle, an illustration of concentric circles of What and How surrounding the core purpose in the central Why.

But it is harder when you are just a local accounting firm or an undertaker, isn’t it? “Some guys just wanna drive a forklift”, as Colm Regan puts it in the Late Late Show. They don’t need a vision or to be passionate about a cause, or innovation, do they? (Good laugh for you in that short video, and more about passionate tax optimizers, passionate sofa retailers and accountants from David Mitchell’s Soapbox here).

What is purpose?

Where Simon Sinek explains the purpose of a business as “The Why”, Microsoft Advertising makes it more concret and tangible in their “Marketing with Purpose” framework which was kicked off at the Elevate event these last few days.

The Marketing with Purpose framework breaks the Why down into values, responsibilities and inclusion. The effect these factors jointly create on users is to make a brand more authentic. Perhaps authenticity is what Simon Sinek calls “consumers don’t buy your products’ functionality, they buy your reason for producing it”.

In one of Microsoft Advertising’s research studies, it was found that 72% of consumers were more likely to support brands that are authentic in their advertising.

Towards a more ethical marketing

The rise of this trend comes at a time where users have become distrustful of digital marketing and perhaps somewhat tired of the shear number of ads they see every day. The Cambridge Analytica scandal was the symbol for misuse of user data. The interests, affinities and behaviours of millions of users were logged and cross-referenced in a giant database that was used to exerce influence believed to have affected elections across the world, including the US Presidential election. The one that surprisingly instated Donald Trump as what was once called “the leader of the free world”. Fake news proliferated out of control.

The Cambridge Analytica scandal was about uncontrolled use of covertly obtained user data. This was based on the same priniciples on which brands have been retrieving data via digital marketing channels over the past years.

In the world of marketing, users turned to ad blocking and anonymous browsing as the only means they had to fight back. As one would expect, users also began to lose trust in brands that were felt to misuse their data or disrespect their privacy. A Microsoft research study focused on Generation Z showed that 48% of users stopped purchasing from a brand because it didn’t represent their values. (“The Psychology of Inclusion and the Effects in Advertising: Gen Z“)

In 2021 a number of things are happening. GDPR, the European privacy legislation and CCPA, California’s privacy regulation, are leading regulatory frameworks starting to set a standard for what user data can be collected and how. Whereas they are far from perfect from a functionality standpoint, they are setting a standard for what is acceptable and what is overstepping, and thus are helping end users know where to put their own limits. And from the end-user perspective, the pandemic has caused a great disruption in both end-user behaviour and marketing techniques, as we described recently in our article about user unpredictability and marketing in the 20’ies.

Within the big online platforms, Apple is on a crusade to kill third party cookies in the name of privacy. And Google is following in their footsteps for this noble cause, and with a much higher impact on marketers. For outsiders, it frankly does look a bit like internal fighting between GAFAMs (the data driven companies Google, Apple, Facebook, Amazon, Microsoft). Apple is in a dogfight with Facebook, Google is fighting Amazon. They do this to regain user trust while providing a sizable blow to their competitors. This will have great impact on the way marketers work in the future as they are directly affected by these impacts. This is addressed more in detail in Innovell’s digital marketing report: “Digital Marketing in Volatile, Uncertain, Complex and Ambiguous Times” (commercial report not freely available).

Oh, and Microsoft? Well, here is an interesting initiative where Microsoft Advertising is taking an altruistic and entirely positive approach to the topic by publishing a playbook and setting up a course with accompanying certification: “Marketing with Purpose” which we are looking closer at in this article.

An authentic brand uses responsibility, values and inclusion principles

In the Marketing with Purpose framework set forth by Microsoft Advertising, the core building blocks are responsibility, values and inclusion. And meeting best practices and enhancing these factors leads to higher brand loyalty.

The brand loyalty curve from the Marketing with Purpose framework

The three components of marketing with purpose help to build an authentic brand which in turn translates into consumer trust trigger a higher propensity to purchase that brand’s products. Supporting the entire framework is a number of Microsoft Advertising research studies.

Let’s have a look at the three big components one by one:

Responsibility: Brand’s need to both be and communicate responsibility to their audiences:

• Respect user data and privacy
• Be transparent in their communication
• Apply brand safety control to their advertising
• Make their communication media accessible to all categories of users

Values: A brand is built on a mission statement carrying it’s values. When these values overlap and resonate with users’ values, brand trust and loyalty increases.

• Establishing a brands ethical foundation
• Knowing and communicating a brands’ values
• Understanding consumers’ values
• Removing or reducing data bias from the equation

Inclusion: The openness and inclusivity a brand exercices in its’ practice and its’ communication.

• Knowing the 9 feelings of inclusion: celebration, zest, hope, relaxation, relief, safety, confidence, acceptance and clarity
• Using inclusive keywords in search campaigns
• Aplying proximity, empahty, insights and innovation to communication

Better and more responsible marketing drives better performance

Many advertisers care more for marketing with performance than marketing with purpose, maybe because goodwill is harder to measure than sales. After all, any business is by definition geared towards generating profits. That is the purpose of a business.

Advertising has long been aiming to be on wavelength with the values of its audiences, but in the past not many studies or metrics pointed to the importance of advertiser responsibility or inclusivity. Those have become building bricks for authentic marketing which is in user demand.

Perhaps this is a wakeup call for those who have had a too narrow focus on short term business metrics and who have neglected the greater good and the image of their brands in the long run.

If you want to dig deeper into the Marketing with Purpose framework, you can download the Marketing with Purpose playbook here and you can access the course and the (rather fun) certification. The course is a 2-3 hour investment well worth your time.

Have we reached the End of More? Or is it only the End of Cookies? Will Buy Nothing, Fly Shame, Reuse Recycle and the Planet, People, Profit paradigm be trendsetting for the 20ies?

The COVID19 pandemic marks a pivot for user behaviour. We are all hopeful that we are currently (spring 2021) seeing the end of what seems to have been an endless struggle, a war against an invisible enemy, a challenge to our social patterns. But what about behavioural patterns?

In digital marketing, “mobile” and “touch” have been major revolutions of user behaviour over the past 10 years, brought about thanks to technological change. But the pandemic struck them both down. Touching has become a contamination risk. Mobility was taken to a halt. We do not yet know for certain what fundamental changes will continue once the world returns to a new normal, but we can see a lot of indicators already. Let’s explore.

How was marketing affected by the pandemic?

My good friend and co-author of the Amazon Marketing Report, Dan Saunders, kindly shared some before vs after screenshots from his Amazon homepage with me last year. Yeah, you guessed it: toilet paper, coffee, cleaning products were all over that homepage during the pandemic. Essentials. Once the first lockdown was over, it returned to some normality including his favourite tech devices. But things didn’t return to pre-pandemic conditions on the high street. We still have not come to any normality, and our behaviours are changing.

In digital marketing, the pandemic first struck budgets down. In the research for our most recent report, agencies responding indicated budget reductions of around 40%. When there is uncertainty, one of the first things to suffer is media spending. Advertising plunged. Agencies took a hit.

Next there was the great data disruption of 2020. For over a decade, the paradigm for digital advertising has been “machine learning applied to audience data”. Artificial intelligence would use behavioural patterns to predict the best forms of advertising based on real-time user behaviour.

Machine learning is a powerful tool. Its weakness is that it is expecting data to be homogenous and truths to be universal. Nobody helped the machines learn there was a pandemic. With broken data, marketers had to resaddle campaigns and acquire new data. Stop, take a step back, rethink, redeploy.

In 2021, the first impact of the data disruption is past us, but marketers are facing many more challenges: the end of cookies, removing access to some of the behavioural data, the continuing rise of AI and the increasing opacity of its predictions: search terms reports, broader matching, imposed automated bidding. Marketers can no longer expect to see the raw data.

And remote work has additionally impacted their organisations. Digital marketing is extremely well suited to work from home and even to #workfromanywhere. Agencies sent their people home, but they remained connected to the virtual enterprise, and some may never return to an office.

For a more in-depth analysis of these trends, check out our 2020 Digital Marketing Report.

How is consumer behaviour changing?

Even more fascinating is consumer trends that emerged or expanded during the pandemic. Microsoft Advertising and the Suzy research initiative looked more deeply at those in the 2021 Consumer Trends report.

Some of these trends resonate strongly with me. They even make my wish to stop calling people “consumers” stronger. People are people, and successful marketers understand that and look for motives rather than impulsions. Enough of a terminology rant, let’s look at some of the emerging user trends in 2021

The End of More. Our economies are built on a growth paradigm. Economic growth is the solution to poverty, unemployment and inequality. The pandemic created negative growth in most economies. Some are eagerly looking towards the return of growth whereas others consider it the end of a cycle. The end of more. Have I ever been more grateful to have a garden? The pandemic has not pushed be to have a bigger garden, but to appreciate what I have and feel priviledged because so many others are suffering.

Buy Nothing. Even more radical. Recycle, reuse, share, repurpose. Vinted is one of the strongest ecommerce platform if you feel you have to buy. Buy nothing is a sign of circular economies reducing waste and limiting new production. Preserve the plane, use less raw materials, less energy.

Local not global. It seems almost symptomatic that the Suez canal would be blocked and making global commerce suffer. 15 years ago, it was all about the “global consumer” desiring strawberry desert at any time of the year and drinking orange juice every morning. But global circulation of goods requires logistics which were put under dire pressure during the pandemic due to restrictions, sick people, distancing, precautions. We refound “local” and starting appreciating it. European economies have started “relocating” certain industries that were massively “delocating” 15 years ago. It is the end user who is driving this trend.

Sustainable travel. Fly shame pre-existed the pandemic, but how could anyone imagine a world without flying. Now we have seen that world, and whereas we may not be entirely comfortable with the perspective of a different setup, we can also see new models emerge. Travelling can be about the trip and not just the destination. It doesn’t have to be fast. It is of course quite a trip to cross the pacific by boat rather than plane, but the experience of it, might be put at the front of the scene.

Nostalgia tripping. I don’t know how many times has this crossed my mind over the past months. If only I could go back to New Zealand to revisit the most beautiful country in the world. Or if only I could do another road trip to Spain under the baking sun. Oh wow, would love to take my wife to Istanbul to experience the gate between East and West. Nostalgia is entering my mind, and I think this will be a trend when and if the world opens up again.

There are more trends to discover and their explanations in the Microsoft Advertising report mentioned below. The research was carried out in collaboration with Suzy. The ones above resonated with me and may not with others. Download the report to get a chance to discover the in-depth research on consumer trends in 2021.

The Many Challenges of Marketing in the 20’s

Our own digital marketing report stresses the need for marketers to be proactive with change and embrace it but not with closed eyes. Keep an eye on the AI. The Microsoft report announces the new business paradigm they call “People, Planet and Profit”.  Virtual enterprise is rising, social distancing has entered our consciousness, user motivations are changing, the “consumer” is mutation. And in all of that, we are waiting for the pandemic to phase out and the new normal to crystalize. Marketing in the 20’s is quite something.

Read more about how the digital marketing landscape is changing in a volatile, uncertain, complex and ambiguous world in the Innovell digital marketing report: Digital Marketing in a VUCA World. 

Download the 2021 Consumer Trends Report from Microsoft Advertising and Suzy here.

With Amazon Advertisings’ staggering 66% growth in Q4 of 2020, the giants ad offering is now firmly established in the digital media landscape. Amazon Ads has become part of the Triopoly of Digital Advertising together with Google Ads and Facebook Ads. On top of that, the Amazon advertising platform is pacing well above the baseline Amazon e-commerce growth rate, already impressive at over 30%.

But what is Amazon Advertising and who is it for? Can any advertiser make use of the platform? How does it work? Should your business be advertising on Amazon in 2021?

In our research for the Search Trends Report in 2018, we discovered that search marketers specialized in Google Ads and Bing Ads hadn’t adopted Amazon Ads, and that it was below the radar for many advertisers despite having gained critical mass and experiencing much higher growth than the other ad platforms.

What is Amazon Advertising?

Amazon Advertising is a division within Amazon composed of two different offerings, Amazon Sponsored Ads on one hand, and the Demand-Side Platform, Amazon DSP on the other. The names have changed quite a bit in the past, but names like Amazon Media Group (AMG), Amazon Marketing Services (AMS) and Amazon Advertising Platform (AAP) are no longer used.

Amazon still reports on its advertising revenues in a category called “Other” in its quarterly reporting, despite its having passed the 5% mark of Amazon’s earnings.

Amazon Advertising proposes a range of advertising solutions made available to agencies and advertisers inside and outside the marketplace. The primary media placements for Amazon advertisements are inside the marketplace: on product detail pages and in search results pages. Amazon additionally places advertising outside the marketplace on properties it calls O&O: Owned and Operated media. And finally, it has the capability to use ad exchanges such as Rubicon and AppNexus to reach sites completely external to Amazon.

When it comes down to the ads themselves, an Amazon ad can have a wide range of formats. Each depend on the placement and the advertising solution in which it is found. The simplest ads are based on product listings, more advanced ads can be display banners and carrousels, and video is also available in some of the solutions.

Amazon Sponsored Ads or Amazon DSP

Amazon Sponsored Ads and Amazon DSP are two different organisations within Amazon Advertising. The more accessible solution is Amazon Sponsored Ads, which Sellers on the platform can access freely and which is conveniently part of the same accounting as their ecommerce. It is composed of three products, all using the cost per click model (CPC):

• Amazon Sponsored Products: simple and straight forward keyword-based advertising for product listings.
• Amazon Sponsored Brands: keyword, product and category targeting for promoting a brand, logo, text message in more prominent position in the marketplace
• Amazon Sponsored Display: audience targeting, retargeting, display banners using placements inside and outside the marketplace using a CPC model.

The Amazon DSP is a programmatic advertising platform with restricted access. It allows for a much more advanced targeting than Sponsored Display and works on a cost per thousand impressions (CPM) model. It is the Rolls Royce of advertising with Amazon.

6 essential things to know about Amazon Advertising

Amazon Advertising is evolving quickly. Not only is it experiencing phenomenal growth, but the platform and the offering also progress. The recent opening of Sponsored Display to inventory outside of the marketplace is a prominent example. But let’s look at some of the things that don’t change. The keys to advertising on Amazon in 2021.

Advertising is an essential part of being an Amazon merchant

Marketing on Amazon involves showcasing, pricing and describing one’s products and making inventory and shipping available to buyers. It is essential but not necessarily enough to have great reviews and ratings to become a best seller. An increasingly important part of the marketing equation is making sure one’s product is visible to buyers by using advertising.

Amazon advertisements are best for endemic advertisers

Amazon distinguishes advertisers whose products can be found on the platform, endemic advertisers, from advertisers whose products are not marketed there. Non-endemic advertisers fall into categories such as automotive, energy, finance, travel and hospitality, telecommunications and gambling.

Endemic advertisers make up the bulk of ads on the platform as the user journey is short and sweet ending in a measurable conversion directly on the platform. Nationwide non-endemic advertisers may however be interested in building an Amazon advertising strategy because of its large exclusive audiences which can’t be reached via any other advertising platform. The other attrative Amazon DSP asset is the rich audience data the platform can make available for targeting purposes.

Link In and Link Out

Whereas the Amazon platform is pretty much a closed garden where you are either inside or outside, there are a few approaches through which traffic is exchanges with the outside world, such as:

• Amazon DSP campaigns for non-endemic advertisers can link a banner inside the marketplace to a destination outside of Amazon.
• External advertising can link directly into the marketplace to promote a product outside of the platform. This approach is emerging as a paid search strategy for Amazon-first
• Amazon DSP and Sponsored Display campaigns can retarget users outside of the Amazon platform to bring them back into the fold.
• Amazon Influencer partners is an affiliate program where influencers can enter into revenue share deals with merchants on the Amazon platform by promoting the products on their social media or websites and sending users into Amazon to purchase.

Linking in to the platform is still a nascent discipline made difficult by the somewhat rudimentary tracking made available via the affiliate platform or the Amazon Attribution platform.

Amazon Sponsored Product Ads are like AdWords

In our research for the Amazon Marketing Report, we found that Sponsored Products was the most popular product among marketers. It ressembles the Google Ads search product so much that it could have been named Amazon paid search, or even Amazon AdWords, now that Google has abandonned that name.

Amazon Sponsored Products is easy to use because it directly uses the product listing as the ad, targets keywords and even allows marketers to use automatic targeting for refining the keywords that drive conversion.

Amazon Sponsored Products is the first step a Seller will take into advertising, and in many cases it is a necessary step to increase visibility, once the product listings have been optimized and a brand store created.

Amazon DSP is gaining ground

In the world of programmatic advertising, Google DV360 is the incontested leader trailed by TheTradeDesk. The Amazon DSP is quite a bit lower on the list. It has a triple advantage, though: it provides the only access to inventory on the Amazon marketplace, its inventory is experiencing hefty growth, and it has some of the best audience data on purchasing behaviour. Expect to see the Amazon DSP gain more ground in the near future.

The learning center is great

With such a strong growth, a rapidly evolving platform, and a culture of confidentiality, it can be difficult to find reliable information about Amazon Advertising. Luckily, there is the Amazon Learning Console, a training and examination platform freely available and really well structured. In the learning center, anyone with a an account, some time and curiosity can obtain an Amazon Advertising Certification.

Don’t ignore things that grow at 30-70% growth rates.

No serious business person can ignore trends that represent 30-70% growth per annum, except if they are Bitcoin and suddenly drop at the same rates again. The Amazon platform and ecommerce grows continuously and Amazon Ads grows consistently above that rate catching up on other advertising platforms and gaining ground in the digital advertising triopoly.

It is time to figure out how marketplaces in general, Amazon and its advertising dimension in particular can affect your business area and pick up the challenge of competing there.

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