2021 Amazon Trends: Video + OTT, Sponsored Display and Amazon Marketing Cloud

Amazon is crushing the ad game.

Their ad business has grown significantly over the past few years and we're predicting a run of +$25B in 2021.

While Amazon advertising started with extremely effective, highly attributable paid search ads, they've been strategically focusing on finding more ways to move people up the advertising funnel and capturing those brand marketing budgets. And COVID only accelerated this.

COVID led to a new dominance in eCommerce, and many brands continued to reallocate these new sales back into advertising setting new baselines on eCommerce sales and advertising.

These higher budgets would in turn lead to higher CPC on existing ad units, which would only create linear growth for advertising. Ultimately this would lead to a ceiling, so Amazon needed to create more advertising options to capture bigger budgets and move advertisers up the funnel.

It's no longer enough to just be running Sponsored Ads on Amazon. Businesses looking to grow must take advantage of the brand building opportunities that Amazon presents. We encourage all of our customers to be activating ad units like Sponsored Display, Sponsored Brands, Sponsored Brands video, Amazon DSP and OTT.

So what trends do we predict will be driving Amazon advertising success in 2021?

1. Video will matter more than ever

2. You will need to reallocate budget from brand marketing

3. Sponsored Display will continue to crush

4. New metrics and measurement tools will help prove the effect of advertising

Prediction 1: Video Will Matter More Than Ever

Video has proven to be the most compelling and engaging way to tell your brand story. Shoppers engaging with video are 3.6x more likely to purchase than those who don't. Now is the time to invest in video.

Amazon's introduction of video-focused ad units like Sponsored Brand video, OTT and live streaming, continues to put the emphasis on upper funnel advertising and brand marketing. Below we'll go through these ad units and why you should consider them in 2021.

Sponsored Brand Video

Data shows that Sponsored Brand video is one of the most efficient ad units for advertisers, with markedly higher click-through rates (CTR) and conversion rates (CVR) over Sponsored Product ads.

These ads drive discovery of your brand among customers at high-intent moments in the buyer journey. And you can expect that Amazon will continue to find ways for these video ads to proliferate in inventory across the marketplace.

Learn how to build your own Sponsored Brand videos with Perpetua's Video Creator directly in the Perpetua platform.

OTT

OTT is Amazon's answer to premium, awareness campaign video content and function similarly to commercials. They are high quality, high impact video ads that appear across Amazon's publishing ecosystem including PrimeVideo, FireTV, IMDB, Twitch and more.

You can easily share your brand message to unique and relevant audiences at scale leveraging Amazon DSP targeting and reach more than 50MM+ monthly active viewers.

Unique benefits of OTT include:

• Many OTT video ads are non-skippable and drive completion rates of 95%

• OTT drives an average increase of more than 2% to your total net media reach without increasing budget (more on this below)

Thus leveraging OTT as a part of building your brand and driving awareness on Amazon becomes a no-brainer.

*Pro Tip: Invest in quality creative. Because these top of funnel, awareness campaigns are premium inventory, they require premium creative. Perpetua's Creative Studios works with brands to create high quality, commercial video with industry-class production teams with packages starting at $5000 USD

Live Streaming

Live streaming which normally appears on Amazon Live and more recently on product detail pages, is a great way to engage and educate your customers about your product via Amazon's dedicated influencers and creators. Think of it like the Home Shopping Network for Amazon.

If you have some experimental budget for 2021 advertising, we recommend checking out Live Streams to see if and how it can be most effective for your brand.

Prediction 2: Reallocate Budget From Brand Marketing

Awareness campaigns (like OTT) require significantly higher initial budget commitments than bottom funnel ads, and you're going to need to justify it. That starts with redefining what success looks like for these types of ads.

ROAS is not your goal, you want to build momentum on the flywheel driving new to brand customers, and increasing your retargeting pool. This means focusing on longterm brand investment, using your awareness campaigns to drive an overall lift in the effectiveness of all your advertising.

So what metrics should you be reporting on? Impact on organic sales, total sales, new to brand customers, lower cost per detail page view, and as mentioned above, brand lift metrics like share of voice, organic rank, etc.

Now that you've defined what success looks like, where does this bigger budget come from?Most likely, the budget will have to come from your brand marketing team. This means if you're doing TV commercials, Facebook, or Instagram top of funnel display advertising or other brand marketing, it's a reallocation of that budget from these channels into OTT. Because you're not using Amazon as just a sales channel, and you're using it to build a brand, these premium, high value ads should be a part of your larger media mix.

How do you convince your team to give you budget? Ensure that you set expectations on results and education on KPIs, highlight the richness of the content and captivity of the ad placements, and provide social proof with case studies from Amazon (or your agency). Amazon moves incredibly fast, and while OTT wasn't necessarily an option last year, it is certainly building momentum in 2021, and we recommend you find ways to get your CMO/CEO to incorporate it into your plan.

Prediction 3: Sponsored Display Will Continue to Crush

Sponsored Display Product Targeting

Sponsored Display Product Targeting ads have premium above-the-fold product page placements. They're great for driving mid-funnel consideration and help cross-sell products among audiences who are actively browsing your product or similar products and categories.

Given their location, advertisers must think of defending their product pages the same way they defend branded search - by bidding on their own ASINs. No one wants to see competitor ads on their product detail page. However, if your competitors are not leveraging SD PAT ads of their own, there's an opportunity for you conquest them and win new to brand customers.

If you are already on the Amazon DSP, SD PAT and Amazon DSP contextual targeting line items do serve ads to the same inventory, but we've found SD PAT actually outperforms Amazon DSP at winning above-the-fold placements on product detail pages.

We go into this in depth in our definitive guide that you can check out here. The gist of it is that SD PAT features more robust targeting controls, and has 'retail aware' features that makes Sponsored Display operating on a CPC model more effective and efficient for your brand.

Every advertiser should be leveraging SD PAT.

In-Market Audiences

Amazon's latest addition to Sponsored Display is the introduction of in-market audiences. These are the top of funnel awareness campaigns that power the Amazon DSP.

There are about 1500-2000 types of in-market audiences you can experiment with for Sponsored Display ads. In-market audiences are a great way to feed your retargeting pool and build your brand new to brand customers.

Currently all Sponsored Display ads run on a CPC model, meaning these ads are quite a bit more effective than the Amazon DSP which uses CPM. While Sponsored Display may evolve to a CPM model in the future for some placements, now is the time to experiment if you plan to use in-market audiences.

Prediction 4: New Metrics and Measurement Tools Will Prove the Effect of Advertising

As you move up the advertising funnel, you're going to have to redefine what success looks like for these type of campaigns, and Amazon is developing new metrics and measurement tools for you to do this.

Currently in beta, Amazon Marketing Cloud will securely and privately store anonymized data that marketers and advertisers can query. Combined with their own first party data, advertisers can create custom metrics in collaboration with Amazon data, mapping unique customers across purchase journeys, determine repeat rate of new to brand purchases, and more. The possibilities are endless.

Also keep an eye out for more robust branded search metrics, access to detail page view metrics, and the introduction of cost per purchase for new to brand shoppers.

Final thoughts? Move beyond sponsored ads. You need to leverage Amazon's full funnel advertising opportunities if you want to grow in 2021. And that means experimenting with ad units like Sponsored Display, Sponsored Brands, Sponsored Brands video, Amazon DSP and OTT.

If you want to learn more, or are interested in using Perpetua to support your full funnel advertising strategy, sign up now or email us at hello@perpetua.io