Amazon Media Education and Skills for the Professional Advertiser

AN INDUSTRY GUIDE TO Ecommerce Advertising Amazon Media Education and Skills For The Professional Advertiser

MODULE 10

Ecommerce Advertising-Amazon Media Module 10

In-Market Advertising– Contents

Learning Objectives...... 1 Amazon’s Marketplace Amazon Ad Formats...... 3–5 Amazon is at the intersection of advertising Where People See Amazon Ads...... 6 and shopping. Amazon Platforms...... 7 Targeting...... 8-9 Amazon has become the first step for online shopping. It has Pre-Campaign Planning...... 10 risen to be a potent advertising channel for reaching consumers Audience Reach...... 11 that are ready to buy. It is the core of what industry experts now Retail Readiness...... 12 call ‘ECommerce Advertising’. Amazon Media Pricing...... 13 Creative Formats...... 14–17 The paid messaging facets of Amazon Media will be exposed Metrics & Reporting...... 18 in this learning module. It is important to grasp that all Case History...... 19 opportunities are housed in Amazon’s platform of search, Review...... 20 discovery and sales. Student Exercise...... 21 This module provides an overview of Amazon Media as:

• A strategic growth advertising medium for brand products • A multi-dimensional targeting opportunity • A Ready-Fire-Aim medium to be used singularly or in combination with legacy and/or other digital media.

Ecommerce Advertising-Amazon Media TUTORIAL

Awareness Learning Objectives

1. Explain Amazon Media advertising forms: Sponsored Products, Sponsored Brands and Display advertisements. Consideration 2. Show where Amazon ads appear: platforms, screen placement and site placement.

3. Demonstrate Amazon’s abilities to target audiences along with Action the exclusive differentiator; in-market audiences.

4. Explain Amazon advertising pricing models.

5. Detail the creative formats of Amazon advertising along with mechanical specifications.

6. Present Amazon campaign performance metrics for campaign optimization.

Just what is ECommerce advertising?

In the most simple terms, ECommerce or EComm advertising is the online promotion of goods and services for commercial transaction. It is selling online. EComm advertising is messaging strategically on the internet to facilitate the bottom funnel action of purchase.

Ecommerce Advertising-Amazon Media Module 10

Digital Media

The ‘Big Digital Ad Picture’ Before instruction on Amazon media, give students a broad view of the digital advertising media landscape. Present it as three(3) puzzle pieces Search Advertising that form the core of consumer action: Search, Social and ECommerce.

Search advertising is using keywords What consumers are interested in. to identify what consumers seek. Google is the dominant force.

Social advertising is taking advantage Social Advertising of the users’ demographic information and targeting ads appropriately. It is the core of Facebook.

Who you are. ECommerce advertising is data-driven marketing to capitalize on actual consumer behavior or purchases. Amazon is the only place where a Ecommerce Advertising marketer can run their media, and get product attributed media performance What people buy. information.

” Google knows what consumers are interested in, and These three(3) puzzle pieces of Facebook knows who you are. But Amazon has what many consumer action: Search, Social and in the advertising industry regard as the most important ECommerce are the core of Attribution piece of the puzzle: what people buy.” Modeling which will be the topic of a future, soon-to-be-released, AAF Teaching Module. 4

Ecommerce Advertising-Amazon Media Module 10

Ad Formats: How people see Amazon Ads Amazon ECommerce Advertising

Amazon advertising is discovery on the path to purchase. It is a point of reaching shoppers who are ready to buy. Amazon advertising products include:

1. Sponsored Products 2. Sponsored Brand Ads 3. Display Ads

Advertisements on Amazon are unique to the medium’s visual shopping platform. It is a visual marketplace where ads blend tastefully into the fabric of an v shopping experience.

It is wise at the early stage of instruction to take students to a live Amazon site view. Click to reveal different ad formats. Emphasize the placement of each along with where they exist along the path to purchase (initial search, product research, check out and thank you pages.)

Sponsored Brand Ads

Sponsored Brand Ads are keyword-targeted ads that appear within search results on desktop and mobile. Sponsored Brand Ads allow brands to have a custom headline and logo within the ad creative and drives shoppers to a custom landing page or Amazon Store.

Ecommerce Advertising-Amazon Media Module 10

Amazon Display Ads

Product Display Ads utilize product or interest targeting to deliver highly relevant ads to shoppers with certain interests or shoppers who are actively viewing specific products. Amazon display ads can appear on the product detail page, on the right rail of search results, at the bottom of search results, on the customer reviews page, on the read all reviews page, at the top of the offer listing page and in Amazon-generated marketing emails such as follow ups and recommendations. Product Display Ads run across desktop, mobile web and mobile app.

Ecommerce Advertising-Amazon Media Module 10

Above the Fold (ATF)

When audiences come to Amazon they see a page with information, products and additional content. This top section of the Amazon site that may be seen without scrolling, is referred to as Above the Fold or ATF.

Below the Fold (BTF)

When audiences come to Amazon, the opposite of ATF is Below the Fold (BTF). This is the section that requires scrolling to see. Often it contains additional product information or reviews. The actual place of Below the Fold depends on screen size and resolution. On smaller aspect ratio screens like 1280 x800 the actual scroll begins at 800 pixels. The same page on a 1920 x 1200 aspect ratio screen will be in full view. 8

Ecommerce Advertising-Amazon Media Module 10

Amazon Advertising Platforms

Desktop Laptop Mobile Kindle Fire Fire TV

An unspoken, but unique feature of Amazon ECommerce ads is the application across platforms. Ads are served up on desktop computers, mobile devices, Amazon Kindle readers, Amazon Fire tablets and Amazon TV. The delivery options range from staticdisplay to interactive and full video.

Ecommerce Advertising-Amazon Media Module 10

Targeting Audiences Digital/Interactive Media Audience Targeting The internet expanded audience targeting capabilities beyond the demographic, geographic and timing tools of traditional media. The use of web tracking instruments, from cookies to tags to pixels, has delivered additional opportunities to pinpoint target audiences with:

Contextual Targeting Audiences who view, visit or interact with websites, mobile browsers or other ad supported devices based on the identity of the user and The true science of ECommerce advertising is displayed in Amazon the content displayed. audience targeting. It is important at this point to chronologically walk students along the path of media audience targeting. Example: Serving ads for patio furniture on a site like SouthernLiving.com where content and editorial focuses on outdoor living, home enjoyment and decor. • Traditional/Legacy Media: broadcast, print, out of home • Digital/Interactive Media: websites, social media Lookalike Audience Targeting • ECommerce Media Reach new people who are likely to be interested because they’re similar to existing customers or users Traditional/Legacy Media Audience Targeting

Before digital media, audience targeting for broadcast, print, out Example: Current product users visit certain websites, use specific complimentary of home and traditional media was, and still is, governed by audits products, participate in common activities, and display identical demographic from Nielsen, Arbitron, advertiser and secondary research sources. characteristics to current customer base. Traditional/Legacy media audience targeting includes: Remarketing • Demographic: age, gender, income, household size, ethnicity, Targeting existing customers, users or website visitors who may have education looked, but not taken purchase or other action. • Geographic: location, region, market • Timing: daypart, day of week, month, year Example: Serving ads to website store who clicked to buy yet did not complete purchase. Often called “abandoned carts.”

Ecommerce Advertising-Amazon Media Module 10

ECommerce Media Audience Targeting

The ability to go beyond traditional targeting and pixel tag-generated digital audiences, to specific individuals based on search, browsing and historical purchase history is what ECommerce media audience targeting has brought to the industry. This is truly what sets Amazon apart with:

In-Market Targeting

Amazon’s “In-Market” segmentation targeting is based on actual purchase behavior: not what people might have expressed interest in, but what they actually did. Amazon’s micro-level segmentation targets each customer individually, allowing the company to convert visitors into long-term, high-value customers. “In-Market” by Amazon In-Market Targeting: Amazon’s Sell Proposition metric means individuals with active purchase behavior in the past 30 days or less. The unique selling proposition of Amazon Media is In-Market Targeting. The ability to engage shoppers at the point when Example: Serving ads for disposable diapers based on those who have purchased they’re willing to purchase is unparalleled in any digital infant crib sets in the past thirty days. medium. The engagement offer may be:

Lifestyle Targeting • Sell • Upsell: Encouraging customers to purchase Lifestyle Targeting leverages Amazon’s first party data with over a a comparable higher-end product than the product year of search, browsing and purchase behavior to deliver personas in question of consumers. • Cross Sell: Invite customers to buy related or complementary items items. Example: “Health Strivers.” Consumers who have purchased or browsed health and/ or fitness related items in the past 12 months. Specific complimentary products, participate in common activities, and display identical demographic characteristics to current customer base.

Ecommerce Advertising-Amazon Media Module 10

Pre-Campaign Planning

Segment Overlap Report Managed Service Advertising

Demographics The additional step beyond targeting that Demo - Males 51.07% Demo - Females 48.93% Amazon extends to larger advertisers Top Segments ($35K+) is what gives aim to product Segment Name Segment Category Segment ID Segment Size Index Overlap Score marketers. It’s called Segment Overlap IM - Plumbing Fixtures In-Market 983 6 2298.26 Reporting. IM - Rough Plumbing and Building Supplies In-Market 3315 7 520.4 IM - Tools and Building Supplies In-Market 1621 7 500.5 IM - Father’s Day - CA Lifestyle 3872 7 493.55 Because of Amazon’s direct contact with IM - Power and Hand Tools In-Market 825 7 434.87 actual sales transactions that generate IM - Tools and Home Improvement In-Market 709 8 350.22 IM - Tools Auto & Industrials > All Tools & Home Improve In-Market 826 8 338.98 “In-Market” and Lifestyle audience targeting IM - Environmentally Conscious Lifestyle 31 8 325.64 capabilities, it generates reports that IM - Home Decor In-Market 697 7 296.69 demonstrate the probability of purchase IM - Industrial & Scientific Tools In-Market 859 8 289.93 IM - Home Improvement & Renovations Lifestyle 71 9 273.31 based on real shopping behaviors. By IM - Automotive Parts and Accessories In-Market 828 8 267.29 clustering similar profiles or attributes IM - All Tools and Home Improvement In-Market 6472 9 257.89 (high overlaps) with additional reach IM - Gift Givers Lifestyle 19 8 248.71 opportunities (low overlaps) Amazon IM - Gardening and Horticulture Books In-Market 1063 9 245.69 IM - Grocery and Gourmet Food In-Market 576 8 245.57 advertisers may expand a segment by serving IM - Lawn & Garden Products In-Market 6290 8 240.55 ads to site visitors who fall into different IM - Office Products and Supplies In-Market 398 8 239.09 segments but are similar across thousands IM - Home Kitchen and Dining In-Market 424 8 236.47 IM - Pet Lovers Lifestyle 15 8 232.74 of purchasing attributes. IM - Exercise and Fitness Interests Lifestyle 157 8 230.74 IM - Household Supplies Lifestyle 1040 8 223.82 Notice in the example here. In-Market IM - Home Entertainers Lifestyle 962 8 222.97 IM - Recent Shoppers Lifestyle 121 8 216.35 purchasers of plumbing fixtures, tools and IM - New of Expectant Parents Lifestyle 2 8 202.3 home improvement demonstrate from five to IM - Healthy Lifestyle Lifestyle 195 9 200.11 twenty-two times the propensity to purchase. IM - Sci-Fi Interests Lifestyle 283 8 196.67 IM - Grocery Shoppers Lifestyle 4534 8 196.44 In addition, Lifestyle segments like Father’s IM - Winter Lifestyle Lifestyle 2610 8 195.52 Day and Environmental Consciousness add IM - Sportsmen Lifestyle 264 8 194.77 even more opportunity for advertisers. 12

Ecommerce Advertising-Amazon Media Module 10

Audience Reach

Similar to digital media counterpart Google, Amazon Advertising Audience Layering Platform (AAP) consists of additional sites where advertiser messages may be fed including Yahoo, USA Today, HGTV, GlamMedia, • Millions of Products Facebook Exchange, New York Post and thousands more. In addition • A Streaming Entertainment Service to AAP sites are Amazon owned and operated placements such as • An enormous database of customer preferences IMBD, Diapers.com, Zappos. com, WholeFoods.com, Twitch (video • A platform of additional sites and mobile apps gaming) and a growing list as the marketing platform expands.

182M Monthly Visitors *USA

Ecommerce Advertising-Amazon Media Module 10

Buying Amazon Advertising: Self-Service/AMG

The cost-per-click (CPC) is the amount Great for driving web traffic CPC Cost Per Click paid each time a user clicks on a Reach people in an action mindset promoted pin. Only pay when someone clicks to website

This is the standard media measure of cost Buying impressions with higher ROI efficiency (CPM). It is the cost to reach one CPM Cost Per Thousand Recommended to drive in-store sales thousand people of a particular audience. Strategy for specific Reach/Frequency goals Advertiser pays for “impressions.”

Impressions are free, and the advertiser Efficient/Flexible auction buying only pays CPE when a user engages with Pay only when someone engages CPE Cost Per Engagement their ad. Engagements can be measured Charged up to 3 unique actions in a given ad by shares, interactions, likes, comments, Reach people who are in-market and likely to engage click-throughs or app downloads.

Ecommerce Advertising-Amazon Media Module 10

Retail Readiness More Pre-Campaign Planning

A key component to Amazon ECommerce advertising is what is called “retail readiness.” The mindset that Amazon drives is one of paths to purchase. What will drive reviews? Page views? Actions? Purchases?

To maximize the return on ad spend (ROAS), advertisers are encouraged to take a broad view of everything. This involves maximizing:

• Images/video • Reviews • Ratings • Amazon Standard Identification Number (ASINs)

Advertisers on Amazon are engaging shoppers at the point when “they’re willing to purchase.” An ad alone may pique interest. However more is needed. Most shoppers want images, comments, opinions, ratings, product numbers for comparisons and more. That is why an all encompassing approach must be in place for effective ECommerce advertising on Amazon.

Potential customers will see an ad. Then what? If they click, they go to a product page. Be sure that page has images, information and reviews that drive them down the funnel to consideration and ultimate purchase (See Examples).

Ecommerce Advertising-Amazon Media Module 10

Amazon Media Pricing Self Service Managed Service Amazon advertisers have two(2) payment selections. Cost per click Amazon advertising platform Amazon advertising platform (CPC) and Cost per Thousand (CPM). whereby advertiser/agency requiring minimum spend places ads, keywords and bids of $15K per month or Cost per click (CPC) advertisers bid by keyword and are only on a manual basis. This option $35K per year. Managed service charged on a cost per click basis. Amazon Sponsored Product and is available to advertisers of all accounts receive programmatic Sponsored Brand Ads CPC based. levels of spending. buying support from Amazon ______Media Group (AMG) with Cost per thousand (CPM) advertisers pay on a traditional media Advertiser pays 10% self additional assists such as equation that also includes an Amazon platform fee plus a $0.75 data service platform fee on buy segment overlap reports. fee. ______

Two Intricacies for Students to Understand Pricing Example: Advertiser Advertiser pays 25% managed purchases 1000 impressions service platform fee on buy Amazon advertisers may either 1) place ads on a Self Service for $3.00 CPM ______Platform or 2) place advertising through Amazon’s Managed Service AAP Self-Serve: $3.00 which requires a minimum of $15K per month of advertising or $35K (Cost of Media) + $0.30 Pricing Example: Advertiser All Amazon advertisers pay a three part fee on buys that include: (10% Platform Fee) purchases 1000 impressions for + $0.75 (Data Fee) = $4.05 $3.00 CPM 1. A cost per click (CPC) or cost per thousand (CPM) bid fee; eCPMt AAP Managed Service: $3.00 2. Platform fee (self or managed service); and (Cost of Media) $0.75 3. $0.75 data fee. (25% Platform Fee) + $0.75 (Data Fee) = $4.50 eCPMt

Cost Per Thousand Cost Per Click This is the standard media measure of cost efficiency (CPM). It is the cost The cost-per-click (CPC) is the amount paid each time a user clicks on a to reach one thousand people of a particular audience. Advertiser pays for sponsored ad. “impressions.”

Ecommerce Advertising-Amazon Media Module 10

Creative Formats

A statement often used In-Marketing, real estate and other business customer. A video clip may be targeting top of funnel awareness on forms is “location, locaton, location!” Advertisers that maximize Kindle Fire or Fire TV. Or perhaps a specific placement on customer returns on Amazon ads optimize placement based on location. Ads review page or a wish list/gift page will pique further interest. Below can be placed on the first landing page of a search. They may be are Amazon creative formats based on site visitor location on the adjacent a checkout page for “add on” sales of an actual purchasing path to purchase.

Detail Page: Rectangle Gateway ATF Rectangle Detail Page: Above Navigation Located in the right hand column at the start Above-the-fold placement on Amazon’s Located on the right hand side above navigation of the customer review section Home Page

Ecommerce Advertising-Amazon Media Module 10

Read All Reviews Rectangle Thank You page BTF Rectangle Located in the right hand column of the read all Located below the fold of the Thank You page reviews above the fold

Gift Central Rectangle Search Skyscraper Located in the right hand column of Amazon’s Located on Amazon’s Search and Browse pages Gifting hub. Contextually targets shoppers who in the left hand column. are actively looking for gifts.

Ecommerce Advertising-Amazon Media Module 10

900 x 640 Expanded

Thank You Page: Half Page Amazon Marquee Located in the right hand column of Located above the global navigation the read all reviews above the fold. bar on the Amazon Home Page.

Daily Deals Network Stripe ATF Offer Listings Stripe ATF placement on Amazon’s Today’s Available on every Offer Listings Page Deals Page (Gold Deals) and Woot.com across the Amazon site.

Ecommerce Advertising-Amazon Media Module 10

Amazon Wish List Sponsor Marquee Located just below the main navigation bar within Amazon’s Wish List feature. (customers create and make their wish lists on Amazon)

Amazon Kindle with Special Offers Kindle with Special Offers is a unique advertising platform of the following placement opportunities:

Screen Saver: Full screen ad that appears during ‘sleep’ mode.

Home Screen Banner: Persistent Home Screen Banner located at bottom.

View Special Offers: Listed items for all active special offers and advertisements on the device. ATF Checkout Sign In Unit Messaging as buyer is “reaching in their wallet.” Ad Details: Cached landing page containing offer details or the ability to buy products from the device.

Ecommerce Advertising-Amazon Media Module 10

Metrics and Reporting

Amazon Advertising Platform Analytics

The key components to Amazon ECommerce advertisements are the analytics. Most digital platform media deliver the standard metrics of impressions, click-through-rate (CTR), CPMs, and cost. Amazon Advertising Platform (AAP) advertisers ACos: Average Cost of Sale = Total cost of advertising spend/sales get an additional measure that is tied to actual product sales ASINs: The Amazon Standard Identification Number is a unique activity, called Return On Ad Spend 10-character alphanumeric identifier assigned by Amazon.com and its (ROAS) which is directly tied to product sales through Amazon partners within the organization. sales or sales through Amazon vendors. In the example above ATF: Above the Fold. Indicates ad placement is on the ‘first look’ screen. the vendor’s return was $2.17 for every dollar invested in BTF: Below the Fold. Ad placement is below the ‘first look’ screen. Scrolling Amazon media. is necessary to see the ad. DPV: Detailed Page Views: Metric that determines engagement. DPV clicks. Ready. Aim. Fire. Why Amazon? In-Market: Amazon audience targeting opportunity of individuals who have purchased in the past 30 days. Traditional advertising campaigns, cross-platform strategies Keywords: Determine when ads appear. Keywords are matched to common and complete digital efforts have become more predictable with terms shoppers use to search for products. analytics, tracking tools and data. Despite the higher degree of ROAS: Return of Ad Spend = Sales/Total Cost of Advertising. accountability; most are still launch-and-see efforts. Amazon’s Win Rate: A campaign metric introduced by Amazon to help campaign media analytics of ROAS along with Average Cost of Sale managerss determine the percentage of how many times a specified ad has (ACos) deliver a more calculated strategy. Audience, budget and won an ad auction. This information helps indicate why a certain ad auction delivery levels can be set, placed and analyzed (for ROAS/ACos) underperforms, and from there campaign managers can decide if strategy to be aimed precise. adjustments are needed.

Ecommerce Advertising-Amazon Media Module 10

Case Study: Consumer Beverage Co.

CPG Beverage Oracle Norms Oracle Norms Brand’s Amazon Food & Beverage All CPG Campaign

Lift in $ per HH 21.59% 0.67% 0.64%

Challenge

A growing CPG beverage brand was looking to increase awareness and spark new sales. As a newcomer to the beverage category, it took an unconventional approach and focused primarily on online advertising channels to establish and grow their business. Using their heavily weighted online strategy, the brand aimed to drive both online and offline sales.

Solution

The brand used Amazon ad solutions to place ads on search results, Results product detail pages, Amazon properties and trusted 3rd party sites. To deliver effective ads, the team used various creative formats and The Amazon campaign contributed to a 22% lift in offline sales, as messaging to reach shoppers at different levels of engagement with well as a 17% lift in household penetration. Compared to Oracle their brand – whether they were actively researching their brand or norms, the Amazon campaign observed a lift in offline sales that was not yet in-market for drink beverages. The brand also leveraged 32x greater than the Food & Beverage category norm. By breaking Amazon audience insights to optimize their ads to drive both online down sales lift concentrations, the brand learned lifts were higher and offline sales. To measure the full impact, the brand used an among shoppers in the $50K-$100K income bracket and 40-59 age Oracle Data Cloud DLX ROI study in addition to Amazon reporting. group. 22

Review Time Module 10

Challenge 1 Challenge 5

What is unique about Amazon as a digital advertising medium? Buying on Amazon Amazon’s direct contact with buyers as both seller and channel gives advertisers the opportunity to target consumer “at the point of sale.” Amazon advertising is priced on ‘bid’. This method is called “In-Market” targeting. • Cost Per Click (CPC) Challenge 2 • Cost Per Thousand (CPM)

The three basic Amazon ad formats: Upon acceptance of a dynamic CPM or CPC, the pricing formula is: CPM/CPC + Service Fee* + Data Fee** = eCPM/CPC Sponsored Products • Sponsored Brands • Sponsored Display * Self-Serve of Managed Service Challenge 3 ** $0.75

The Amazon Platforms: Challenge 6

Desktop • Laptop • Mobile • Kindle • Fire • FireTV Amazon Metrics/Reporting

Challenge 4 The actionable insights of in-market purchase behavior on Amazon media can deliver an executional aim of greater precision than realized on other media. The use of Amazon targeting coupled The specific targeting of Amazon includes: with segment overlap scores and retail preplanning/readiness can successfully implement a campaign that may then be analyzed for • Demographic/Geographic targeting ROAS/ACos for even more precise aim and results. • Contextual targeting • Lookalike Audience targeting • Remarketing • In-Market targeting • Lifestyle targeting

Module 10 Student Exercise Ecommerce Advertising-Amazon Media

Complete the learning module with several commit-to-memory exercises

1. What are the three(3) Amazon ECommerce ad formats? 4. What do the acronyms “ATF” and “BTF” mean? Explain their 2. In addition to desktop, laptop and mobile advertising platforms, application in Amazon ECommerce advertising. Amazon Media advertisers may also place messages on what three devices: 5. Explain the key differentiating feature of advertising on Amazon ______versus other forms of online advertising. ______6. What is the Amazon Media reporting metric that illustrates the ______effectiveness of advertising invested.

3. Give an example of the following:

Demographic targeting:______Contextual targeting:______In-Market targeting:______

24 Created by Daniel J. Petek The Edward R. Murrow College of Communication • Washington State University Please send comments to www.aaf.org/learningmodules American Advertising Federation 1101 Vermont Avenue NW, Suite 500, Washington, DC 20005 www.aaf.org