Ecommerce advertising on eBay & Amazon reaches new heights
Considerable ad spend increase is recorded in ecommerce advertising and digital ad spend is forecast to make up almost 65% of total media ad spending by 2022.
As a consequence:
The marketplace model is changing and sellers need a stronger and smarter advertising strategy.
The current marketplace model shows a changing dynamic between organic and paid search. A good example is eBay: in popular categories, more than 50% of the first page of search results are sponsored products. This includes the first 5 search results that are getting the most clicks.
eBay Advertising has seen exponential growth. eBay has over 800,000 sellers promoting over 200 million listings (YoY revenue growth of 110%).
Amazon’s advertising business is also growing at a rapid pace. US advertisers are estimated to spend $10.92 billion on Amazon’s platform in 2020.
Amazon is now the third-largest digital advertising platform in the US after Google and Facebook. According to eMarketer, Amazon accounts for almost 9% of US digital spend in 2019, which is a great increase from 6.8% in 2018.
The opportunities of the growing ad business in ecommerce
Today you definitely need ads to have satisfactory visibility and conversions. It’s not a matter of ‘if’, it’s a matter of ‘when and how’.
Advertising and eBay/Amazon search engine optimization can work together to increase sales.
With platforms scaling up investments towards commerce advertising, a number of marketing opportunities arise, e.g. reducing the sales cycle, improving brand awareness, visibility and so on. For example, eBay’s Promoted Listings claim to boost visibility by over 30%.
Additionally, ads provide ecommerce sellers with valuable insights on changing consumer habits and the best ways to acquire customers today. Ecommerce giants, such as eBay and Amazon, have tons of shopping journey data about who your shoppers are and how they shop. Such data is key for designing successful ad campaigns and targeting at scale.
The challenges of ecommerce advertising
Paid marketing campaigns tend to reach a plateau in a given market over time. This means that acquisition costs can significantly go up without adequate return on investment.
An advertising plan created in a conscious and data-driven way can help overcome any potential challenges. This goes hand in hand with the retailer’s flexibility, adaptability and willingness to test what works and what doesn’t.
A good opportunity is to test new markets, especially those that have lower competition and can offer low CPCs (cost-per-click) and better return on advertising spend.
The marketplace of the future
The marketplace of the future will be even more competitive, especially on established markets. Thus, sellers will have to look for alternatives on markets where it’ll be easier to compete. Selling globally will simply become a must to be able to compete and to benefit from economies of scale.
As a consequence, the marketplace of the future will be eclectic and truly global. As the marketplace with the biggest inventory and the best prices tends to win, marketplaces will have to get global sellers onboard.
And what about sellers? They will have to sell efficiently worldwide to be able to compete. Today, geographic divisions are becoming increasingly irrelevant in terms of remaining competitive, so it’s really time to go global including your advertising strategy!
Webinterpret’s ecommerce solution helps sellers to leverage ads on different international markets. With access to data and vast ecommerce knowledge, we can help merchants tap into their actual sales potential to achieve the best possible ROI.
