Monday, March 06, 2017

Will Amazon Ads Mean Less Agency Creative?

 The article published yesterday by Mashable on WPP CEO Martin Sorrell’s comments during an earnings call last week focuses on the concern Sorrell has about Amazon entering into the advertising space.  Why does he call this move “terrifying?”  Because Amazon not only owns our wallet with its long history of convenient, to-your-doorstep service, but they also own a vast amount of data on our purchase behavior.  And that data is can telling advertisers who you really are.

“You are what you eat” was never really true – even in this modern age of Paleolithic diet crazes.  We are what we buy.  Plain and simple.  We vote with our wallet and express our values, our desires, our goals and our hopes through the way we expend our budget.  Amazon has been there with us as we’ve sought easier and more convenient ways to get what we want from a broad spectrum of product categories.

Amazon has done this for years through their recommendations feature.  Taking the next logical step, Amazon can easily suggest items I might want to buy based on all of the items I have already bought.  This is the promise of context – messages have greater impact when they appear right when consumers need them.

Context also changes the nature of the competitive set.  Data driven ad serving may increasingly hone this ability to micro-target until we refine the competitive set to a similar state as the 1950s.  In the 1950s ad messaging was simple and “Coffee. Tastes Great.” did a fine job for coffee brands.  The message was simple because competition was scarce.  With only one or two coffee brands, you didn’t have to have a breakthrough creative message.  The category wasn’t cluttered with 30 brands.

Micro-targeted context ads can create the same effect.  If I am running out of coffee, a pop-up ad from Amazon driven off my past purchase behavior and identified through advanced analytics need only say “Coffee.  Order here.”  I don’t feel the need to shop and see if there are any new coffee brands out I might like to try.  I’m not slowly pushing my cart through the grocery store.  I’m running to the airport and it is easier to just click “Order.”

According to the article, Amazon ad revenue only makes up 2% of the digital ad market, but it is growing fast.   The ability to micro-target consumers and drive increasingly impactful message to them may shake up the ad industry significantly.  As a member of this industry I can’t help but feel the terror Sorrell speaks of, yet I’m also hopeful that companies like Amazon will provide as many new opportunities as they do challenges.

Realizing the promise of context may shift the marketing focus from “stopping power” to “engagement value.”  And that could be a new and exciting way to use our creative resources – creating breakthrough experiences that connect vs. blasting slogans and jingles to the masses.  Terrifying, certainly, but also exhilarating.

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