Retail media’s impact on advertising: Insights from Amazon ads Nordics

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Josefine Vännman, the General Manager at Amazon ads in the Nordics, joined us in Copenhagen for our recent World News Media Congress. 

Below is a fire-side chat between Vännman and Robert Johansson, Execute Media, Sweden.

Robert Johansson: What makes for the interesting growth we’re seeing in retail media advertising?

Josefine Vännman: I think this has been fueled by the change in people’s buying behaviour, of moving away from the traditional physical stories into online purchasing. Retailers, too, see it as an opportunity to make more money. 

Additionally, it is the ability to measure the ad dollar that you spend, and see what you actually get back. In the closed-loop attribution model used on a retailer’s site, you can clearly see the return on ad spend. This allows you to track each dollar spent and measure the exact number of products sold as a result of your advertising efforts.

With the deprecation of third party cookies, even with the delays, this has been a reality for several years in a region like Sweden that has a lot of Safari users. The ability to leverage first-party data, which many retailers possess, has been crucial in driving this change.

Where in the funnel should we place retail media?

Vännman: Our view is that it is a full funnel solution. You can leverage retail media in any part of the funnel. You can leverage retail media if you’re an endemic advertiser (who advertises products or services in media channels that are directly related to that industry) or a non-endemic advertiser (who is more interested in the unique insights and audience that retailers have). 

The purchasing journey is evolving, and I’m not sure it is a linear one anymore. We’re jumping between the various stages of the funnel at various times, and no one will buy a product if they haven’t heard, read or watched a video about it first. 

We’ve shifted our focus beyond immediate click-to-buy scenarios, emphasising video investments, particularly through Prime Video, which is crucial for us. This year, we launched our advertising business there and are investing heavily in it, leveraging our distinct strengths.

On the store side, we’re utilising user insights to deliver highly targeted ads, ensuring relevance for our audience.

How can news publishers benefit from connecting with Amazon? 

Vännman: Amazon has their own Demand-Side Platform (DSP). We are 100 percent programmatic; we do not even offer Insertion Order (IO) buys (an agreement between a publisher and an advertiser to run an ad campaign). For me, it’s more the way of buying, rather than necessarily losing control.

A user might not visit Amazon every day to buy a product, but they would hopefully visit a publisher every day to read the news. 

We have a solution called Amazon Publishing Services, a collaboration with premium publishers around the world. 

It is a header bidding solution that enables advertisers or agencies using our DSP to access premium publisher content. We enrich this media with our insights and targeted audiences.

Two thirds of our third-party business is actually ads that we send towards publishers. It’s a big part of our business, and we are always looking to onboard premium advertisers. We are exploring that in the Nordics now as well. 

For a retailer, whether it’s with Amazon or collaborating with a local store, this is a unique opportunity and a definite win-win solution.

Having spent many years at Schibsted before joining Amazon, one thing that stood out to me was encountering numerous advertisers I had never heard of before.

In general, publishers excel with major advertisers who spend significantly. However, reaching the Small and Mid-Sized Business (SMB) segment is challenging due to the sheer number of businesses involved.

In Sweden, Amazon showcases millions of products, many from unfamiliar brands. We’ve recently launched our stores business in South Africa, revealing a multitude of new and diverse brands. These brands rely on advertising to reach consumers, and their ads can appear on publishers’ sites as well. 

This presents an opportunity for publishers to tap into the small or mid-funnel layer that they might not be necessarily engaging with today, while continuing to prioritise premium products such as major takeovers and branded content, which are unique strengths.

Please elaborate a bit more on small to mid-sized publishers on navigating and working with retail media?

Vännman: Collaboration is key – on the publisher as well as the retailer side. One has to look at the ability to tap into one of those networks.

It’s going to be tedious for publishers to go to each one of them. However, collaborating with the largest local retailers in the region, with global brands that are present in that region, is definitely a way to tap into this part of media buys.

What are some of the unique selling points of retail media? 

Vännman: The most important one is the closed loop attribution – the ability to see what your advertising campaign has brought back in sales.

Second, is the ability to use audiences, data and insights that were not previously available digitally. While major players have substantial search data, it does not necessarily translate into purchase data. So, the ability to integrate both endemic and non-endemic brands based on consumer behaviours – of what they are purchasing or researching – can create a super powerful audience, making ads more relevant and effective.

In challenging economic times, maximising marketing efficiency is crucial. We believe targeting the right person in the right context optimises ad effectiveness and delivers better results for your marketing dollars.

What’s in store for Amazon Ads and retail media in general, in the next year?

Vännman: We are super young in the Nordics. But if I look to the more established countries in Europe or the US, we see a definite growth in the SMB market. 

Small and medium sized businesses are increasingly leaning into retail media, and that’s a trend that will continue to grow. Especially for non-endemic brands like cars, fintech, travel – the kind of industries that you’re not necessarily thinking about when you’re thinking about retail.

AI will most likely enhance efficiency and hopefully improve how ads look like. We recently launched a product targeted at the SMB market where we employ AI to make ads visually richer, and are already seeing an increase in clicks or conversions.

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