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AMAZON INTELLIGENCE: MARKETING PLAYBOOK

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Executive Summary Key Questions

As consumer attention and spending have shifted online, so have advertising budgets: 2018
is widely predicted to be the year that digital marketing spend will overtake offline marketing
spend for the first time.1 Although still relatively small compared to Facebook and Google,
Amazon’s piece of the digital ad pie is growing: the site’s ad revenues in the US hit $1.65
billion in 2017 and are growing faster than every other ad publisher’s, with an expected
growth of 48.2 percent in 2018.
The engine driving this growth is Amazon’s ability to link consideration to purchase further
down the funnel than traditional search engines. More consumers now initiate product
research on Amazon than on Google, with 56 percent of consumers using Amazon as the
starting point for product research.2 With the anticipated onslaught of new spending coming
from both competitor brands and large advertising companies, stakes are rising for brands to
deploy on Amazon. Winning brands are those that combine universal, known best practices
with test and learn tactics to succeed on the platform and stand out in their product category.
1. “Digital Ad Spend To Surpass Traditional In 2018,” Laurie Sullivan, Media Post, January 12, 2018.
2. “Amazon’s push to grow its ad business, in 4 charts,” Seb Joseph, Digiday, December 12, 2017.
Marketing Playbook: Number of Categories, Share of Sponsored Product
Impressions in Top-Three, and Number of ASINs
Q3–Q4 2017, n=197,956 Sponsored Products by 107 Brands ■ Indie/Private Label ■ Traditional
BUTTONED DOWN
100%
PERCENT OF SPONSORED PRODUCTS IN TOP 3
• What are the inherent differences between the key ad units offered on
Amazon, especially search (Headline Search Ads and Sponsored Products)
and display (Product Display Ads and Generic Display Ads) ad products?
• How should brands best optimize Headline Search Ads and Sponsored
Products, and how do strategies differ depending on where brands are
targeting the consumer along the funnel?
• How has Amazon used its media vehicles to increase the visibility of its
private labels?
Key Recommendations
• Each Ad Product Plays a Distinct Role: When determining how to allocate
spending on Amazon media, brands need to define specific objectives for
the ad buy. Amazon’s various media products can help organizations meet
different objectives along the conversion funnel.
• Headline Search Ads Drive Switching & Brand Awareness: Headline
Search Ads are typically served against a more relevant set of results. They
can promote switching behavior and generate broader brand awareness by
driving to multi-product landing pages.
Number of ASINs • Sponsored Products Boost Hero Products & New Launches: Brands
must ensure that relevant keyword bids are aligned with priority products
as opposed to vast product portfolios to stimulate the Amazon flywheel
effect (boosting clicks, sales, and organic visibility). Additionally, clearly

GOODTHREADS
ADIDAS demarcate campaigns across different product types to boost Sponsored
80% CHARMIN Product placement.
WRANGLER OLAY
60% SEVENTH GENERATION Evan Neufeld | Vice President, Intelligence
PROACTIV
Cooper Smith | Director of Research, Amazon Intelligence
40% RUBBERMAID
DOVE
LYSOL Oweise Khazi | Associate Director, Amazon Intelligence
GILLETTE PHILLIPS
20% Lakshmi Kalluri | Research Associate, Amazon Intelligence

KIMBERLY-CLARK PROFESSIONAL AIR WICK Elena Akulova | Senior Designer

0%
0 3 6 9 12 15 18 21 24 Gartner L2 research is based on data-driven analysis. Our findings, rankings and
NUMBER OF CATEGORIES
Source: Gartner L2 Amazon Intelligence: Marketing Playbook, April 2018. recommendations are objective, unbiased, and independent of membership.

April 20, 2018 1

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