Amazon Ads Create Halo Effect On Other Channels: Report
Amazon Advertising generates a 20% higher return on investment relative to a brand’s average marketing ROI, according to the latest ROI Genome report from Analytic Partners.
The report, Omnichannel and a Brave New World, analyzes marketing approaches using multiple channels to reach consumers during the COVID-19 pandemic.
When companies spend money on Amazon Advertising, the media buy has a positive effect on consumer purchase behavior in other channels too.
The data shows percentages have remained steady throughout COVID-19, proving the fallout from the pandemic did not cause consumers to shift to ecommerce, but today’s environment simply accelerated the move to online.
The report points to Amazon advertising, providing an example of the halo effect, meaning the impact of advertising on sales of brands or products not directly advertised on the marketplace.
Display and paid search have the biggest impact on brands and products. Display ads running on Amazon have a 48% impact on sales off the marketplace, with search advertising coming in at about 29%.
“Roughly half of every dollar spent on Amazon display ads benefit sales on Amazon, and the other half benefits sales on other channels,” said Mike Menkes, senior vice president at Analytic Partners. “Marketers that measure the impact in silos don’t benefit and misattribute much of the budget as well. TV advertising, for example, drives a lot of purchases online.”
Much of the impact from display ads running on Amazon occurs offline in retail. The report suggests it means shoppers use Amazon more like as a comparison-shopping engine to check prices and reviews before buying somewhere else.
Amazon search also has an offline impact, according to the research. Amazon search drives offline sales, but it’s more direct on Amazon, compared with display.
“We really think taking a consumer-centric and holistic understanding of business performance online and offline is important,” he said. “Without taking a holistic view, marketers will leave money on the table.”
The research also looks at what drives performance on website and store traffic. The report features a large U.S. omnichannel retail business that saw 35% of its website traffic driven by traditional TV advertising — more than all of the digital channels combined.
The business — primarily ecommerce — gained 35% of its website traffic from television, 13% from search, 11% from PR, 7% from online video, 4% from social, 3% from OTT, 3% from display, and 1% from radio.
The data suggests that companies using an omnichannel marketing approach increase ROI by 32%, compared with those that do not.
Despite lockdowns and social distancing, offline efforts are often the primary drivers of online behavior.