Amazon Sets Its Sights on the $88 Billion Online Ad Market
Last year, the jeans maker Levi Strauss & Company shifted some of its advertising spending away from YouTube to Amazon, where it sharply increased its use of display ads, according to a May report by Gartner L2. In doing so, Levi’s increased the brand’s visibility in Google searches, driving shoppers to an Amazon page with Levi’s merchandise, the research firm said.
In an emailed statement, a spokeswoman for Levi’s said the company had increased its marketing investment across all channels, including television, traditional digital and newer digital platforms, including Amazon.
For some brands, the increased spending is most likely directly linked to increased competition on Amazon’s platform from Amazon itself. As Amazon introduces more of its own private-label goods, many companies are expanding their advertising spending to raise the visibility of their products.
On a recent afternoon, a consumer who typed “cereal” into the search bar of Amazon’s browser would first see an ad for JoyBol, followed by similar ads for General Mills’ Corn Chex and Cinnamon Toast Crunch. But just below those ads, in a box labeled “Top Rated From Our Brands,” a number of cereals from 365 Everyday Value were featured. That is the private label of the grocer Whole Foods, which Amazon acquired in 2017.
General Mills declined to comment.
Kellogg Company, which faces much of the same competition, said it had been generally shifting advertising dollars toward digital platforms.
“With Amazon’s platform now being a leader in many elements of advertising — including, for many categories, search — it makes sense for part of those ad dollars to be allocated there,” said Monica McGurk, Kellogg’s chief revenue and e-commerce officer, in an emailed response to questions.
But for Kellogg’s, what sets advertising on Amazon’s platform apart from others, like Google or Twitter, is the online retailer’s data.