The advertising division of Amazon is quickly acquiring a bigger portion of the advertisers’ budget in India, as stated by Karan Bedi, the Director and Head of MX Player.
He says that the integrated ecosystem of Amazon, the e-commerce, streaming, and data signals, is assisting it to speed up the part of advertiser spending.
Why Amazon Is Gaining Ground
The move towards digital advertising has really taken root in India, and Amazon is enjoying the ride by providing a platform to the advertiser in an integrated form.
Its resources comprise the MX Player streaming platform, the Amazon online shopping platform, and its data driven environment in both devices and forms.
The simplicity of tying the amount of spending on ads to the final sales with regard to the Amazon shopping indicators provides brands with the opportunity.
Karan Bedi notes that increasing numbers of advertisers are shifting account funds from traditional media and platforms less attentive to data into the ecosystem of Amazon due to its promotion of both coverage and quantifiable results.
He reported that the advertising based video on demand (AVOD) service provided by Amazon is offering more interactions, particularly on the mobile and connected TV screens.
The access to first party data and features like improved targeting and a shoppable ad experience (when the audience can proceed to the product after watching the advertisement) are stressed as the sources of growth.
Within this context, Amazon has an ad spend share that is increasing at a slower rate than most people had expected.
With the continual increasing use of digital video consumption and advertisers looking to capture attention and other metrics that are measurable, Amazon is well positioned to gain an unrealistically large share of that growth.
As mentioned by Bedi, the on demand availability of streaming on devices and languages contributes to reaching both urban and non urban masses, which is a critical aspect considering such attributes are sought by brands to achieve scale and depth.
This growth in inventory, formats, and advertising technology is contributing to the growth in advertising business at Amazon in India.
What It Implicates: Advertisers, Amazon, and the Market
For advertisers:
- Larger proportions of budgets going to Amazon equal increased competition on Prime advert spots and perhaps upward rates on the favored positions.
- Personalization of video engagement, shopping results, and the fact that it will be possible to associate ad impressions can enhance the role of performance oriented creativity and targeting.
- Indian brands might have to reconsider their advertising mixes by putting a larger percentage in services such as Amazon that integrate commerce and content in a single experience.
For Amazon:
- Owning more advertisers’ wallets will enrich its ad business moat and the complementary nature of its retail and streaming businesses and diversify its income.
- The pressure on other digital ad competitors (both local and global) to be more innovative, such as in pricing or format, is caused by what Amazon can do to increase ad spend share.
- The ability to sustain growth will rely on retaining the viewer, growing the size of the inventory, retaining data advantage, and making the ad experiences effective and relevant.
For the market:
- The advertising landscape in India is changing: the use of digital video and connected TV ad formats continues to grow at a very fast pace, and the platforms of content combined with commerce are well placed.
- The shift can further hasten the appetite of TV and traditional digital and offline media by moving the spending towards mediums that would provide end to end measurement and connectivity of commerce.
- Smaller players might also have pressure since high quality inventory and data oriented platforms such as Amazon are elevating the advertiser ROI and targeting.
Overall, the growing ad spend from Amazon in India indicates a more precise correlation between the contemporary advertiser demands (performance + reach) and the Amazon potential (content + commerce + data).
The comments of the MX Player head show that this is not a gradual transition but a rush.
To the brands, media planners, and wider industry, the message is clear that platforms that put together signals of shopping, inventory that can be readily measured, and results are becoming the order of the day as far as the advertising budgets are concerned.
