Amazon is becoming a dominant player in the digital advertising space, recently revealing that they made over $10B in advertising revenue in 2018. This makes them the 3rd largest player in the game, though still far behind Facebook and Google.

According to a recent survey, 80% of existing advertisers on the Amazon platform plan to increase their spend in the channel, in part by shifting budget from other channels, including SEM. Where some advertisers find scalable success, others will follow, ensuring that Amazon will continue to grow and probably gain ground on Facebook and Google.

Obviously the companies advertising on Amazon like what they’re seeing in terms of performance (otherwise why increase their spend on Amazon ads), but how many consumers actually discover and buy from new brands on Amazon?

I recently launched a quick Google Survey to find out. I targeted a representative sample of the US population and asked “Please think of the last time you bought something from a company you had never heard of before. How did you first learn about that company?

It turns out that Amazon is pretty effective.

Google Survey results from November 2018 for how often customers discover new brands

*Pardon the low quality graph…this is a quick post

If you take into account the confidence intervals, there is a chance that consumers are as likely to find and shop with a new brand via Amazon as they are via search, social media, and word of mouth.

It’s not the best-phrased survey question, asking people to recall anything is tricky, and obviously the Google sample isn’t going to be truly representative of the population since they can only reach people using Google’s online properties. But this survey took less than 30 minutes to launch and cost less than $50. That’s a small price to pay to get another datapoint to inform your understanding of the market. I’ll refrain from standing on my soapbox about how important ongoing market/customer research is for marketing given complex markets, and yet, how often it gets disregarded…maybe another time.

So now what?

If you are a young, or even established, brand that’s selling your wares on Amazon, then you should be looking to test Amazon Advertising as a part of your marketing channel mix. I’ll refrain from standing on my soapbox about how important it is to be testing new channels and tactics on an ongoing basis…maybe another time.

But there is also a strong chance that most purchases on Amazon are purely transactional, driven by nothing more than the lowest possible price, with a complete disregard for who the company is offering the item at said lowest price. Therefore, you should also be thinking about how you will forge any kind of relationship with the customers you acquire through Amazon so that you get repeat purchases and more word-of-mouth growth from the channel.

Hint: those bland “How happy are you with your product?” emails that most businesses on Amazon send after a purchase are not enough.