Unlock Amazon's Hidden Value
The Amazon Purchase Journey
This article was first published in Admap magazine, December 2015 @Warc www.warc.com/admap
The image of the mad scientist doesn’t really lie. They’re found working day and night, always dreaming up new things, and unable to explain why they matter. You might think they’re confined to fiction, but in truth a lot of innovative companies are like that too, and Amazon in particular.
Whether it’s drones, Dash, or AmazonFresh, the company is always finding new ways to sell and deliver stuff. But if you’re like most of the marketing world, you probably don’t know that Amazon has also been doing some serious innovation for you as well. The results so far are three poorly known but extremely useful maketing tools: Amazon Retail Analytics (ARA), Amazon Marketing Services (AMS), and the Amazon Advertising Platform (AAP). Together, they offer significant insight into your customers’ purchasing paths, as well as enable you to target customers with surprising accuracy.
First, a little background. We all know Amazon is big, but its actual size is breathtaking. It has long overtaken Google as the most popular way consumers start the purchasing process: 44% of all e-commerce research in North America begins on its platforms; 84% of Millennials trust its reviews; and it has 16 years of behavioural data on everything its customers – including you – have done on the site. That scale means that Amazon has unmatched insight into how and why we all buy what we do. And ARA, AMS, and AAP are your tickets in.
So let’s pull the curtain aside and take a look at how Amazon can start unlocking serious value for your brand.
AMAZON RETAIL ANALYTICS (ARA)
We’ll start with ARA. It creates reports that offer (admittedly unwieldy) insight into what people looked at on their way to buying or not buying your products on Amazon.com. The importance of this is hard to overstate. Today, ecommerce marketers struggle a lot with understanding how people come to purchasing decisions. We do, of course, know what they are doing in our physical and digital properties. The problem is that they’re not there very much. They’re out reading reviews, chatting on social media, and, yes, poking through Amazon. That leaves us with a fractured view of the funnel and a poor understanding of what’s happening and why.
Enter ARA. Thanks to Amazon’s wealth of data and dominant position in consideration, we can gain much better insight into what’s going on. ARA reports can help us understand what’s working or not, both with our own content and our competitors’. They can also show us information about people who considered our products and bought them, as well as those who considered them and didn’t. That way, we can know who our true competitors are and what’s driving consumers to choose them over us.
If you get a little clever with ARA reporting, you can also uncover longitudinal information on your customers. For example, some consumers (and Millennials in particular) are heavily influenced by reviews. Or if you’re buying something functional, such as a vacuum cleaner, you may want to see it in action. It all depends on the person, the category, and the product itself.
By running multiple reports in ARA and examining the purchase paths, you can learn what kinds of content or activities seem to be working or not. That can influence not only how you craft your Amazon store presence but also what kinds of content you develop for your own properties. It can even tell you what categories of ads might be more effective than others. In addition, ARA offers insights into something called ‘market-basket behaviour’. This is a fascinating data point that shows the categories – other than your own – that customers find interesting.
A few examples might help to explain how you can take advantage of this. Companies like Patagonia and REI create high-performance gear, but not everyone who wears it actually cares about running Class V rapids. Some may not even know rapids have classes; they just think the jackets look cool. Market-basket analysis can help you figure out where your customers fit into that spectrum. If a customer is seriously outdoorsy, she might over-index on rock climbing equipment or minus-60- degree sleeping bags. If she’s simply buying the jacket for looks, you might find she is also looking at designer sunglasses. That could make a difference in how you market to her.
A different example comes from the food category. A friend of mine is a crazy foodie and is always buying what seem to me exotic ingredients, like gochujang paste. But gochujang paste is only exotic if you’re not Korean. If you are, it’s as everyday as peanut butter. Furthermore, my friend’s shopping basket would look nothing like a Korean grandmother’s. Their interests in other product categories will diverge greatly.
The possible applications for market-basket analysis are as endless as brands themselves. Obviously, it can help you create more meaningful messaging. It can influence media strategies. It could even suggest new avenues for partnership and product development.
AMAZON MARKETING SERVICES (AMS)
Now, let’s turn to AMS. Companies that sell on Amazon.com can place ads directing people to their product pages. This, of course, allows you to target your competition, which is nice. But it gets even more interesting when you use the insights generated in ARA to drive your AMS strategy. For example, if REI discovered that its audience over-indexed on fly-fishing equipment, it could create and target ads that play into that preference.
AMAZON ADVERTISING PLATFORM (AAP)
AAP is even more fascinating. Taken at face value, it’s simply another media platform. You can use it to place ads on Amazon.com as well as on 95% of the other online exchanges. In other words, ads can appear on everything from Facebook to The New York Times.
The difference is that AAP also gives you access to data on Amazon users, which is pretty much everyone. For example, let’s imagine that a customer begins a product search for a paper shredder on Amazon.com. She reads a few reviews, checks out a few alternatives, but doesn’t buy yet. Instead, she pops off Amazon.com and heads over to social media to post about it. When she’s there, AAP can target her with an appealing offer for a paper shredder.
AAP can even help you if you don’t sell on Amazon. To understand why, let’s suppose you are a luxury brand. Chances are, you have never considered a discounter like Amazon.com a useful partner in any way. This would be a mistake. Even if you think your customers don’t visit discount-type sites, believe me, they do. It’s a fact of human nature that no matter how much money you have, you still like a deal.
Amazon gives brands like these a way to find these more exclusive customers. Research has shown, not surprisingly, that the value of the goods you put in your Amazon shopping cart correlates strongly with your income. People may not be buying high-end handbags on Amazon, but they could very well be buying high-end speakers. And because AAP can target using average shopping cart size, you now have a way to find the affluent customer base you’re looking for.
For example, let’s say you find a person who over-indexes on rugby and outdoor equipment. It’s safe to say he’s a high-income earner, and if you’re Ralph Lauren (the advice is free, Ralph), you could easily target that person with a promotion for a rugby shirt or casual sportswear. You would also know that it wouldn’t be a good idea to hit him with an ad for a fashionable suit. Even though he has the money for one, that’s not where his passion lies.
Another scenario might involve a carmaker who wants to boost SUV and minivan sales. No one buys cars on Amazon (yet). In that case, you know that a key buying demographic for larger vehicles is new moms or those with young children. Amazon data can easily identify these people for you, allowing you to target them either on the platform or off.
With this kind of power, however, comes the need for restraint. Targeting a new mom with an ad that identifies her as a new mom is always a bad idea. As with any marketing activity, you want to think through possible consequences carefully.
The good news is that the future of Amazon for marketers is bright. The company is always adding new services – and whenever it does, count on new data. For example, it has recently launched Amazon Home Services, which is a kind of Angie’s List with vetted companies that do everything from lawn care to moving. Having insight into whether people are making life changes – or prefer to have other people do their grunt work – can be quite valuable for some brands. And there’s certainly more developments to come.
In short, we all have many ways we can benefit from the mad scientists at Amazon. They’ve brewed up some great tools – and when used together, they have extraordinary capabilities. Once you start playing with them, trust me, you’ll get hooked – and your brand will hopefully get happy.