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Summary
Sept 2019 (Vol. 59, Issue 3) Neuromarketing

Numbers, Please
How Amazon Will Revolutionize the Future of Television Advertising
Is Amazon on its way to dominating advertising across measured media? eMarketer analyst Andrew Lipsman assesses evidence that could very likely point to “Yes” as the answer. “Amazon now is leveraging its impressive customer data into an advertising platform that has put the rest of the media industry on notice,” Lipsman writes. “Using its valuable first-party customer data, high-powered digital-advertising platform, expanding advertising-supported video inventory, dominance in voice, and direct-to-consumer product-sampling initiative, Amazon is reimagining how marketing and advertising work.” Among Lipsman’s observations:

  • Amazon is expanding its advertising-supported video inventory, having acquired rights to Thursday night NFL games and Premier League Football. It “reportedly has made overtures to buy Fox Sports and the YES Network to grab a foothold into local sports content.
  • “Its Free Dive is an ad-supported catalog of TV and movie content, and its Fire TV strategy appears to be emulating Roku’s approach to leveraging a considerable hardware-device audience into an OTT advertising platform.
  • “Advertisers are learning the process of buying, measuring, and optimizing ads through Amazon and acclimating to the ecosystem.”

Lipsman adds: “In harnessing the power of video advertising at scale and closed-loop measurement, Amazon will fulfill a promise that traditional television never could …. (and it) could acquire enough video inventory to become a formidable media company in its own right, with a complementary high-margin revenue stream that creates considerable synergies for the retailer.”

What should brands do to prepare for the inevitable, further disruption in advertising? Lipsman draws from earlier research to suggest the following:

  • “Adopt a direct-response mind-set for TV: Brands need to refamiliarize themselves with the bottom-of-the-funnel metrics, such as add-to-cart, purchase and sample response rates (Bellman, Schweda, and Varan, 2012)
  • “Put purchase data front and center: Get better acquainted with purchase-based targeting to find the right audiences (Sylvester and Spaeth, 2019) and with closed-loop measurement to evaluate ROI.
  • “Rethink video-advertising creative content: For a performance-driven environment, test shorter-form ad units that quickly highlight the brand and product benefits and include a call to action (Wolf and Donato, 2019).”

“Above all,” Lipsman concludes, with a nod to research by effectiveness gurus Les Binet and Peter Fields: “Don’t abandon brand building….long-form, narrative-driven content should remain a part of the mix to support shorter-form direct-response effectiveness.”

Read the full JAR article here.