Did we tell you this was coming, or what?

Amazon advertising is working directly with brands now, cutting out ad agencies

Data-driven marketing is the new normal for CMOs. But few in the C-suite grasp the opportunity the ownership of data represents. Jeff Bezos, as usual, is defining the curve. Sure, as the New York Times reports, the disruptive power of Amazon’s purchase of Whole Foods has the investment world in a swoon, with good reason. But as NPR’s Jacob Margolis pointed out on Marketplace, online delivery is only part of the story. The real value in the purchase is the data. We have a few thoughts on how you can make Bezos’ model work for your business.

First, a bit of background:

Amazon’s Advertising Platform changes the future of programmatic

Assuming you have shopped on Amazon, you couldn’t miss the recommendation tool. Amazon linked purchase pairing and the power of social media (“other people liked”) and defined how we make choices online. Well those were baby steps. Amazon’s Advertising Platform takes a giant leap in letting brands discover new purchasers based on past preferences.  It’s essentially a platform that uses Amazon data to narrow and accelerate the learning required to find more users.

Now, with Whole Foods in the mix, the data to be mined becomes even richer. Assuming the integration of Whole Foods loyalty purchaser information, the database will now be able to match purchase histories to deliver coupons, recommendations, samples, recipes, etc.

The evolution of Programmatic Learning
Programmatic ad placement targets best prospects and finds new ones. It starts with a large pool and finds new likely responders based on their similarity to past responders. If you’re starting from scratch, it takes time for the algorithm to narrow down that focus. Specific-channel platforms, like Amazon, LinkedIn, or Facebook, allow you to narrow the focus quickly.

Why your site lives in Amazon’s world

In the US, what we expect in terms of reviews, returns, shipping times and costs, on-site search and recommendations, and any number of consumer interactions are all based on growing up with Amazon.  That’s not true around the world. As Kantar Worldpanel points out in their global study of the impact of ecommerce on FMCG, in Europe, Tesco led the way and dictated the terms of consumer service.  Along the way they’ve tested innovations, like providing South Koreans with ‘virtual shopping’ kiosks where commuters shop on the subway and have their purchases waiting by the time they get home.

Bezos had no such challenger as he quietly built Amazon.  He had years to figure out what makes us buy, to tinker with special offers, golden chests, daily deals, etc. He can test drones, Dash, Flash, and other speed-delivery systems to his heart’s content, and he has the volume to read meaningful data.

Bezos copies well

First he saw how eBay enabled individuals and retailers to create virtually stores within a single marketplace. And lo, he begat merchant services, facilitating sales and fulfillment for retailers, which made it easy to copy AliBaba’s “instacart model,” where Amazon does not stock merchandise itself.

Now, one of those retailers is Whole Foods, with 431 locations in the US.

What does this mean if you aren’t as big as Amazon?

Here’s what Bezos is thinking.

• For consumers, Amazon is a highly trusted platform for the finding, selecting, purchasing and shipping of anything.
• For retailers, Amazon is a platform for instant entry into the difficult-to-manage, difficult-to-keep-up-with world of ecommerce.
• For brands and advertisers, Amazon’s Ad platform is a quicker way to finding the right audience.

And that’s where your business may come in.

Advertising in a lookalike world

The promise of the internet is that you can find anything. That’s perfect for consumers who know what they want. For businesses who want to know which users want them, it’s a little more hit and miss.

So sites with a definable audience are beginning to understand their power in helping advertisers narrow the search.

• Facebook knows who we know, what we like, etc.
• LinkedIn can sort us by title, company, years of experience.
• Amazon knows what we buy, where we send it, who we send it to.
• Quora knows what we want to know.

Market to your CRM

If you have a CRM with at least 1000 emails, you can encrypt them and find those individuals on social platforms. That does two things: it lets you target current contacts and customers with ads wherever they go online.

The bigger thing? You can match the characteristics of your best customers against other people who share those characteristics. It’s called a “lookalike audience” and it’s brilliant for lead generation.

Can you bend it like Bezos?

If you’re an enterprise with thousands of members then you need to put your C-suite hat on and think about the value of the data you own.  Do you know all the farmers in the country? Do you have a list of thousands of Ferrari owners? Or golfers? If you have email data on a niche that’s valuable to advertisers, the products and services you generate will be an nth of the value of the data. Maybe in the past you’ve used that data to sell ad space on your email newsletter, or charged for sending an email blast.

But by matching your list to the lookalike-generating power of programmatic algorithms, you have the potential to make that data a revenue generator for your company.  Want to know more? Call us.