The Digital Big 3 Play The Commerce Game

The Digital Big 3 Play The Commerce Game

June 10, 2020

Since its inception in the early 1990s, digital marketing has had periods where one or two platforms dominated the space and it was imperative that advertisers be seen activating in the spaces. 

Joe List

Commerce Media Director

As consumer behaviors shift, so must our methods to meet them. Joe understands this better than anyone — and answers the call daily by serving up relevant content at the right moment as our lead for strategy and activation. 

With experience in programmatic media and influencer activations, Joe previously worked as part of the Amazon Media Group. 

More recently Facebook and Google cornered the market and had a duopoly that other brands could not ignore due to their immense scale and options when it came to targeting. More recently, however, there have been shifts. Facebook and Google have remained part of this elite club, but Amazon has emerged as the third dominant force, especially as brands look for ways for users to purchase online.

Of the three platforms, Google is certainly the most established, as they remain dominant in the search space and video space (YouTube) and have a stranglehold on ad tech. They have made recent attempts to expand their e-commerce offerings with Google Shopping, but within this Big 3, most of the significant advances have come from the other platforms.

In the last year or so, Facebook and Amazon have attempted to expand their ad offerings in ways that stray from their core offerings and allow them to grab advertising dollars from more brands looking to reach users at more stages in the marketing funnel. These updates paired with some of the new digital habits resulting from COVID-19 affirm that Facebook and Amazon are positioned to dominate the digital ad landscape for quite some time.

Facebook’s ad offering, traditionally focused more on awareness-based tactics, has evolved to include units and opportunities focused on purchasing products directly from the platform. Advances like Instagram Checkout and, more recently, Facebook Shop show Facebook intends to move from that reach-based awareness model to one more focused on commerce.

These advances also come at a very opportunistic time as brands and users alike look to change their models of how consumers purchase their products as they reel from the effects of the pandemic. Facebook says their data shows a 15% rise in the number of users on their platforms during the COVID-19 crisis. In a recent survey, 50% of consumers said they purchased an item seen in a social ad within the last 30 days. The items purchased by the users surveyed were mostly grocery and apparel.

It’s interesting, with Facebook’s new focus on commerce, that they don’t see themselves as equal with Amazon, historically most dominant in the e-commerce space. Rather, Facebook sees a tremendous opportunity to connect small and medium-sized businesses with consumers, and to have a strong platform for a direct-to-consumers model.

As Facebook looks for a greater share of e-commerce dollars with their new tech, it seems Amazon has moved their platform in the other direction, looking to take more of the dollars normally reserved for upper-funnel media. Of course as this becomes a more touchless world, the more traditional Amazon offerings of the Sponsored Brands and e-commerce display ads are the biggest reason advertisers flock to the platform. However, with changes to how consumers digest media, Amazon has made some strong pushes into new spaces.

Like other streaming services, Prime Video has grown tremendously since the advent of social distancing and pandemic control measures. Users have been in front of their screens for longer, and digesting more content than ever before. Amazon has made a strong effort to push their OTT content, and with that their OTT ad placements. On the OTT platform, Amazon has seen advertising grow 12%, with the majority of the spend attributed to grocery advertisers. Amazon’s OTT offering is unique among platforms, as it combines viewer data with the wealth of first-party data that Amazon has access to at demo, lifestyle and in-market levels.

Amazon’s other video platform, Twitch, has grown considerably, with the total number of hours watched jumping from 33 million on March 8 to 43 million on March 22. With this increase in hours watched, advertisers flock to the platform to take advantage of it. As major events including those of sports leagues have been cancelled, Twitch has stepped in to be the replacement. This has allowed brands another platform on which to amplify their content onto a platform that they have high viewership, and to pair that with hyper-precise Amazon data.

So what does all this mean?

As new avenues open for advertisers to reach consumers in an ever-evolving digital world, their media mix becomes more and more convoluted. We certainly wouldn’t recommend that an advertiser switch all of its e-commerce budget to Facebook at this moment, but as the platforms release more tools and offerings, it will become increasingly important to have a presence to ensure that passive users can be converted into active purchasers. And on Amazon within their ecosystem of offerings, reaching users in new places will continue to be an important lever for advertisers looking to take advantage of the data and inherent shoppablity of ads within their platform.

At VCG we are staying ahead of the curve and looking for ways to push innovation in the social commerce and e-commerce spaces. For help with your Facebook and Amazon advertising in the new connected world we live in, feel free to reach out via LinkedIn or email.

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