The impact of e-commerce advertising trends on your company
Marketplaces, voice search and Artificial Intelligence (AI) have been the three biggest e-commerce advertising trends of 2019. These trends affect marketers jobs, marketing strategies and company business models. So how can you distinguish your marketing, sales and aftersales processes when everyone is using the same advertising platforms and automated systems?
The two biggest marketplaces are Google and Amazon, who are continuously competing against each other. Amazon is the third biggest advertising platform in North American and Google is bolstering its marketplace features. Alongside this, voice search continues to grow which results in a new way of reaching consumers. Thus, both Google and Amazon are competing to become the default virtual assistant in people’s homes. Lastly, AI has been on the rise for some time now and continues to change both the marketing landscape and how the two aforementioned platforms operate.
Trend 1 – the evolution of Google and Amazon
Google Shopping is a product comparison platform where consumers are sent to third parties websites for their actual purchase. Right now, every click on an ad costs the advertisers. However, Google is testing a new feature called Google Shopping Action, which would allow customers to buy products directly from its site without being redirected. Each purchase would give a sales commission to Google allowing it to increase its sales via e-commerce. This means it becomes a direct competitor of other marketplaces such as Amazon.
On the other hand, you have Amazon – which has an established marketplace concept – but is also emerging as an advertising platform. Under the new name Advertising Amazon, the company now offers marketing opportunities which include: product display, sponsored products, sponsored brands and its own DSP allows you to buy programmatic video and display ads. Along with new features like video in search ads and remarketing options, Amazon covers the entire customer journey by becoming a one-stop-shop for both vendors and sellers. You don’t even have to sell your products on Amazon to advertise via the website.
Shifting customer loyalty
By rolling out Google Shopping Action, Google is appropriating a large part of the customer journey. If a consumer buys directly via the platform without visiting a third-party website, they will not interact with the brand. This means the individual misses all branding initiatives and is less likely to become a returning customer. Customer loyalty will gradually shift from brand names to Google, something which sellers on Amazon had already taken into account.
Trend 2 – voice, the new way of searching
Shifting brand loyalty can also be seen with the rise of virtual assistants and voice search. Let’s say you voice search for a pair of pants, you don’t want to hear all the options available, as listening to that could take the entire day. So, the voice assistant will go through the search results and offer the best recommendations based on your past behaviour. This creates a new challenge for companies: their webshops now also need to be voice search friendly or else they will miss out on numerous sales opportunities.
A new playing field
Voice is predicted to become a new advertising channel which could revolutionise how we market to consumers. So, how can you stay relevant in an increasingly audio-focused world? That will mainly depend on which virtual assistant comes to dominate the market. And that fight has only just begun, so it is too early to draw any conclusions. However, a significant difference that could determine this battle between Amazon and Google is the approach: Amazon mainly wants to sell items whilst Google is more focused on providing people with answers.
Trend 3 – AI as an advertising solution
Tech companies started implementing AI in the form of machine learning years ago. Examples of this are ad suggestions on Google Ads Recommendations page or Amazon’s Product Targeted sampling program which allows customers to be selected, via machine learning, for a product sample. Bigger companies are making their solutions available to the public resulting in work being automated and taken out of marketeer’s hands. One example of this is Black Friday 2017, Google advised companies to change their bids manually due to the expected spike. But in 2018, this was no longer necessary as the process was automated. Even writing and optimising text advert can now be done automatically. And because AI and automation continue to grow and their processes improved, the work of the marketers is also evolving.
Starting from scratch can be daunting, thus brands can implement easily accessible solutions from Google, Amazon or Microsoft to embed AI and machine learning into their company. Features such as speech to text options, translating web pages automatically or classifying images are easy to implement and easily improve your service. Additionally, AI and machine learning solutions can help you collect and organise large amounts of data such as meter readings or online surveys. But also it can help show patterns in your data. You could, for example, see which customers return products on a frequent basis and exclude them from your target audience. Conversely, you can also predict which visitors could lead to more sales and send them more personalised offers. Thus, when implementing AI, keep in mind your audience preference but also your internal operations and how it could help improve those.
Shifts within the industry
Traditionally, marketers were held accountable for the results of their campaigns. This created a feeling of direct control. However, now that more and more tasks are being automated, this control is being handed over to AI-driven tools. The role of marketers is shifting from executor to coordinator. This change is also making it more difficult for employees to stand out, creating a more competitive industry and changing the job market, when most of the focus lies in optimisation instead of creation. For example, much of the work of an SEA marketeer is being automated. Thus, one can wonder if this position will still exist in a couple of years. At the same time, companies are also creating digital teams to help them transition into this digital era whilst encouraging all other departments to embrace newer technologies.
The impact on advertising
These three trends force advertisers to think carefully about the future. Advertising platforms are evolving which is changing the role of marketers. The e-commerce landscape is a crowded one, making it quite difficult for sales people of commodity products with little or no product knowledge or other distinction. If you are not the cheapest and you have no other USPs, the question is: what right do you have to exist online?
A good example of this is the online battery market. Batteries were increasingly bought via Amazon, who, in 2009, launched its own cheaper battery brand under the name AmazonBasics. More products soon followed suit. The company now has over 100 own private labels and a 90 per cent market share in five different product groups. Because Amazon, and later Google, fully understands all sales data, they can see exactly what is selling well vs not. So how can you respond on that as a brand or manufacturer?
Distinguish yourself with branded commerce
The above three trends influence all aspects of your business and change how you sell your brand and yourself. However, just following these guidelines is not enough to make you stand out. In this digital age, you need to be more distinct and memorable than your competitors. This is where branded commerce comes in and ties all aspects of your story together. For many companies, branding and e-commerce are separate: a homepage with a great brand story which leads to a bland table of products and prices which add little value. But, by combining branding with e-commerce you will improve your customer experience and you will build brand preference. For example, enrich your category and product pages with a handy wizard, short videos of influencers or the story of a designer. Because to keep customers interested in your brand and to attract new clients you need a strong but unique story which you broadcast loudly to the world. This combination of branding and e-commerce is called branded commerce and represents a shift for advertisers from transactional to relational thinking.
Marketplaces, voice search and AI are much bigger and affect all aspects of a company. These trends not only have a huge impact on how companies sell online, but also on how consumers behave. They are impacting the job market by creating and eliminating careers and changing responsibilities. They are positively impacting e-commerce by making the process of marketing, sales and aftersales smoother, more efficient and more personalised. Thus, these new platforms and technologies are not end-all-be-all solutions but combined with branded commerce they can elevate your brand allowing you to stand out of the crowd.
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Head of Paid Media
Bas de Knegt
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