Amazon is rolling out a tool that shows just how much Google and Facebook ads drive people to do their shopping on the e-commerce site
- Amazon is expanding a tool that shows advertisers how many people bought something on the e-commerce site after clicking on ads on Facebook and Google.
- Two agency execs that tested the tool could encourage retailers to shift spending away from Facebook and Google.
- The tool also does not use cookies, which agency execs said could appeal to advertisers wary of sharing too much data with Amazon.
- The tool also could help Amazon reduce its own marketing costs, one agency exec said.
- Click here for more BI Prime stories.
Amazon is trying to grow its nascent ad business by proving it can show advertisers how digital ads drive people to shop on Amazon.
Amazon is expanding a 1-year-old tool called Amazon Attribution that lets brands track whether people bought products on Amazon within two weeks after clicking on Facebook and Google ads. Retailers often use Facebook and Google ads to drive people to their own sites. With its tool, Amazon aims to show advertisers that people end up buying things from Amazon instead. In theory, the tool could get retailers to increase their spending with Amazon to target those shoppers.
In a blog post last week, Amazon said that "hundreds" of brands are using the tool, which can track sales from video, display, search and social campaigns.
"Marketers are constantly looking for more insight into how their ad dollars are being spent, but are challenged by the complexities of managing the multitude of processes that aim to make that a reality," Amazon wrote in the post. "For brands that sell products on Amazon, Amazon Attribution has begun to unify their advertising measurement."
The tool comes as marketers struggle to track the performance of their ads across multiple platforms. Amazon has been criticized by advertisers as a walled garden akin to Facebook and Google because it shares limited data with advertisers.
Two agency execs who have tested the attribution tool said it's key to Amazon's pitch for bigger ad budgets from companies that sell items on Amazon and their own sites. According to the agencies, Amazon's tool gives retailers hard data confirming how showrooming, a term that describes when consumers research products in stores but buy on Amazon, has become mainstream with consumers.
"People are showrooming on a website and then going to convert on Amazon. We knew that it happened but were never able to put numbers behind it," said Josh Brisco, senior director of growth media at digital agency Tinuiti, which he said has tested the tool with about 10 clients over the past year.
In one case, Tinuiti saw a retailer spent $10,000 on Google Adwords to send traffic to its own e-commerce site. Using Amazon's data, the retailer saw that about a third of its $100,000 in monthly sales actually took place on Amazon by people who showroomed. That finding caused Amazon sellers to spend more on the platform, he said.
Amazon is taking a page from Facebook and Google's playbooks
Facebook, Google, Snap and Pinterest offer similar attribution tools. Unlike those platforms, Amazon uses tracking links instead of placing cookies on a company's website. Brisco said this can help appeal to marketers that are wary of giving Amazon access to their own e-commerce data.
"For a handful of clients, that's been the seal to the deal in trying the program," he said.
Another digital agency, Blue Wheel Media, had a client, skincare and beauty brand Babor, that tested Amazon's tool. It found that 17% of consumers who clicked on Google ads went to the brand's website, only to end up buying the product on Amazon, said Blue Wheel Media CEO Trevor George.
"This was the hidden data that no one could uncover," he said.
Amazon has allowed advertisers to track traffic from other platforms before. In March, Amazon started allowing advertisers to measure some Facebook traffic to Stores, the mini branded websites on Amazon that marketers use to display and sell products.
George added that Amazon's tool addresses how it's getting harder for sellers to stand out as Amazon grows its ad business.
"Amazon's ad inventory is tapping out," George said. "There are only so many searches that can be made on Amazon.com, so the next best thing is to find audiences on Facebook and Google."
The tool could help Amazon cut its own ad spending
Tinuiti's Brisco said the attribution tool could have a side benefit for Amazon.
Amazon spends millions on Google and Facebook ads to drive traffic to its site, especially around big shopping days like Prime Day.
If the tool convinces sellers to spend more with Amazon, Amazon wouldn't have to spend as much on marketing itself, he said.
"Now Amazon no longer has to buy its own text ads for every vertical and category or invest as heavily on Facebook - they can incentivize the people who are selling on Amazon to do that themselves by giving them a way to measure."
