Advice For Local Brands Who Are Chasing The Amazon Algorithm

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Advice For Local Brands Who Are Chasing The Amazon Algorithm

Retail media, sometimes referred to as commerce media, is when a retailer like Amazon or Walmart offers advertising capabilities, the same way a publisher does. That ad for a pair of sneakers that catches your eye just as you’re about to checkout of your favourite online marketplace? That’s retail media at work.

After the long-awaited soft launch of Amazon, many local brands will be accelerating their e-commerce strategies. However, too few brands have properly considered how to include a solid retail media strategy to support their efforts. And, with 74% of global consumers starting their buyer’s journey on the Amazon platform, this oversight could end up hurting them.

‘Retail media is the current buzzword in digital marketing around the world. It is the best way for e-commerce brands to get as close as possible to the consumer in the digital aisles and as they make their final decision in their online retail journey. It’s not surprising that decision makers don’t want to miss the boat, and the current global surge in retail media ad spend is being fuelled by the phenomenal US growth over the last few years,’ said Martine Kevelham, director of sales Northern Europe at Incubeta.

Retail media ad spend in the US amounted to $45.05 billion in 2023, surpassing ad spend on connected TV and rapidly closing in on traditional TV spend. In fact, eMarkerter has predicted that retail media ad spend will make up over one-fifth of the total US ad spend by 2027, forecasting faster growth than either search or social.

Chasing The Amazon Algorithm

As local brands wrap their heads around how to grab any competitive advantage on Amazon, Kevelham said first mover advantage will be vital for brands, but warns that getting things right from the start is a must.

Adopting a test-and-learn approach to retail media allows brands to quickly get a sense of how best to manage ad spend on the platform. Certain categories can be particularly tricky, such as electronics and children’s toys which are very fast moving. Kevelham also advises that getting involved in advertising early on means brands can benefit from a lower cost per click as the algorithm begins its learning in the early phases of the marketplace’s operations, and this allows brands to play around without investing too much money.

A Phased Approach

Taking a phased approach means that brands of all sizes can get onto the platform and begin participating early on.

‘It’s very important to Amazon to have local brands on the platform as it gives it credibility. We saw in the Nordics and Europe that many recognisable local brands were present, even if they only launched with their fast-moving products, choosing to go with what they knew would move quickly and then gradually adding more products over time. Many local brands used the Amazon launch as an opportunity to reinvent themselves and made sure they were first to market when it went live,’ Kevelham said.

However, Kevelham warned that well known brands should not be complacent. Companies that have invested in great content, good SEO and have bought advertising on the platform will appear above the fold and customers seldom search brand names, but rather products and won’t bother scrolling past the first few paid-for results to reach the organic results below the fold.

Measurable Growth From The Start

Retail media and platforms like Amazon require a specialist to help brands get their strategy right from the start. But this doesn’t mean brands can’t work with a trusted partner to build up their own in-house teams over time and Kevelham said this is how many brands have built a successful marketplace business.

‘Most of our clients have doubled their revenues and investments into these platforms in just a few years. Many have gone from having one person in charge of their entire marketplace operations to having teams just dedicated to Amazon and specifically dedicated to managing retail media. However, there is no successful way of working with these marketplaces without the proper tooling. You need to be measuring your effectiveness 24/7. Calculating down to a product level how much you should be investing to reach profitability requires a specialist with the right tooling and experience and these partnerships are the ones that are really paying off as the marketplace takes off in a region,’ she said.

INCUBETA
https://incubeta.com