Amazon Sponsored Advertising Is Becoming More And More Like Google Adwords.

As Amazon’s meteoric rise continues unabated, its sponsored advertising acquires more complex features, normally associated with Google Search (Pay Per Clicks). Amazon’s recent search addition includes keyword type options. For their sponsored search terms, Amazon advertisers can now select keyword match types 1) Broad – includes synonyms and any word ordering, 2) Phrase – matches any order of search terms or 3) Exact – the search term must match exactly. Negative keywords is another new Amazon feature. Note that Amazon already had the same advertising structure as Google, namely Campaign -> Ad Group -> Ad.

Leading Edge Digital’s experience shows that Amazon sponsored advertising is one of the Internet’s best bargains with keywords typically costing 20 cents per click with a ACoS (spend/sales) well under 10%. Google cost per click is typically much higher, indicating that Amazon advertising is still an untapped bargain.

I actually hope that Amazon does not go the full Google complexity route for a couple of reasons: 1) The stunning accuracy of Google searches indicates that they must employ some of the world’s most sophisticated linguists, an asset that Amazon cannot hope to match. 2) For marketers, simpler campaigns are easier to analyze and less time consuming to manage.

With 2014 sales of $89 billion, Amazon still has a long way to go before catching up to Walmart, the world’s largest retailer, whose sales (mainly in-store) were over five times as great, according to Business Insider. On the other hand, Amazon offers over 250 million products vs. 4.2 million for Walmart and is growing at a much faster rate. Finally, Amazon’s on-line sales (in other words, all of its sales) were seven times as great as Walmart in 2014. No doubt, a more sophisticated sponsored advertising program is an important step towards increasing Amazon revenue and hopefully for Amazon, profitability as well.