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”.

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”.

» The video that goes with the presentation is here