Amazon Changes Ad Strategy

By Jason Strong, VP of Digital Advertising. 8/25/2020.

Amazon Remakes Sponsored Ad Placements and Removes Spending for Several White Label Categories

As of a mid-June, Amazon looks to have pulled regular search advertising for their own white label products (AmazonBasics, Mama Bear, Presto!, Pinzon, etc.) from the platform. Doing so seemingly addresses one of the key antitrust complaints regularly levied against Jeff Bezos and Amazon. Namely, that by participating in their own ad markets and effectively paying their ad spend to themselves, Amazon could manipulate these ad markets. To what extent Amazon benefited is entirely up for debate, but it is likely that this was far more important in the early, wild-west days of Amazon Marketing Services (AMS), than in today’s Amazon Advertising.

Instead of running ads on the search results pages for these white label categories, Amazon modifies each group of sponsored product ads to automatically begin with a ‘Featured from our brands’ placement from Amazon’s white label family of brands (see image 1). Identical in appearance and function to existing Sponsored Products Ads, except for the very specific notation (actual ads are marked ‘Sponsored’), Amazon, essentially, gives themselves the premier Sponsored Product ad placement(s) on every page.

Additionally, over the past few years, they have tested other Amazon-exclusive featured product placements on competitor’s product detail landing pages. These appeared anywhere from the edges of the page margins to smack-dab in the middle of the buy box. However, using labels such as ‘Similar items to consider’, these seem to have settled in the center of the initial product detail landing page, directly between the product information bullet points and the sponsored product or sponsored display ad position.

So, what does this mean for advertisers competing against Amazon white label products? Though Amazon no longer participates in ad markets, these ‘Featured from our brands’ placements reduce the sponsored product inventory for the search pages. For highly competitive pages with full ads, there are 25% fewer sponsored ad placements (from 12 to 9 placements) on the all-important first page of the search results.

Traditional wisdom dictated winning the top ad spot at any cost. Although categorical variations arise, everyone else now fights for second place, with the lowered click-through and conversion rates that that entails. While this is not an ideal situation, the reality is advertisers have always been at a disadvantage considering Amazon’s effectively unbeatable ad spend and were losing these battles anyway. Thus, the status quo remains, functionally, the same.