In 2020, total worldwide retail sales declined by 3.0%, to $23.9 trillion, amidst the recessionary conditions set worldwide. At the same time, worldwide retail eCommerce sales grew 27.6% for the year, for a total of $4.280 trillion, source - eMarketer
This means that the pandemic has expedited the digitization for individuals as well as enterprises. All major brick and mortar retailers strengthen their online presence to avoid losing their customers who are now choosing the convenience and choices available to them by the online players.
Online retail in 2020 made up around 18% of total retail sales worldwide and is estimated to grow further in the years to come.
Even if we ignore the digital push given by the pandemic and lockdowns worldwide, a quarter of the world's population have made online purchases in 2019 alone (Statista).
When we think of eCommerce, Amazon comes first in mind. And rightly so.
As per Alexa, Amazon's eCommerce platform is the 3rd most visited website in India and the US and the 10th most visited globally, with close to 20% of its traffic coming from search engines. These users spend over 10 minutes on the website during each visit.
With so much traffic coming onto their websites and apps, Amazon's solution suite is not limited to selling products on its eCommerce platform and subscriptions to its music and online content.
Amazon also monetizes the high intent traffic coming onto its digital assets and creating a personalized experience for its visitors and customers at the same time. For this purpose, advertisers use Amazon DSP to purchase ad inventories on its websites & apps and target relevant user groups.
What is Amazon DSP?
Simply put, a Demand Side platform or a DSP is an advertiser facing platform where they can bid for the ad inventories listed by multiple publishers and supply-side players. Similarly, on Amazon DSP, brands, sellers, and other advertisers can book inventories on the Amazon eCommerce platform and its partner ecosystem.
What makes it so interesting?
We already saw the scale of traffic coming onto Amazon eCommerce websites. It is no surprise that Amazon has the most monthly active users (right after the social media platforms) on their apps. Interestingly, this is high intention traffic consisting of users at advanced buying stages. With so much relevant traffic landing on their digital assets, it's imperative for advertisers to come swarming up.
To some up the reasons why eCommerce or, more specifically, Amazon DSP creates so much interest -
- They have the Audience
- They have the Customers' Voice.
- They have the Data
- They decide the Seasonality
Here's more on why advertising on eCommerce platforms always wins.
Rise of the eCommerce
Now let's look into the recent developments that give an additional push towards online commerce. The Covid-19 was a key driver for people spending more time online, new user groups adapting to online commerce channels, and forcing companies, especially in retail, to strengthen their online presence and sales channels.
To put things in perspective, the retail websites generated 22 billion visits in June 2020 compared to 16.07 billion in January 2020 (source - Statista). That's a whopping 37% jump in traffic.
In another estimation, RetailDive says that Ecommerce traffic grew 207% in 2020 over 2019.
With more visitors to eCommerce platforms and more online purchases came in more ad dollars.
To visualize this shift, let's see how the forecast for Amazon ad revenue in the US changed three times in 2020. In 2020 alone, Amazon might have made an additional $2 Billion than previously anticipated.
A Unique Position in the World Driven by Privacy
In the post third party cookie world, when advertisers may have to struggle to get the same benefits of personalization, frequency capping, and targeting as earlier, eCommerce DSPs will have the upper hand. This advantage is based on the fact that they have a ton of browsing, demographic, location, transactional, and behavioral data with consent. On top of that, this data never leaves the platform.
This makes it a gold mine in the world driven by user data privacy.
To support the above statement, let's look into the survey results as released in "DSP Report, Wave 9: Q4 2020". Respondents (primarily advertisers) believe that Amazon DSP will be in the best position to navigate the shift away from third-party cookies.
Now that we have established three facts -
- eCommerce continues to grow at a fast pace
- Online retailers have critical data with them with the consent of their users
- Advertisers are willing to spend much money to get to this high intent audience
How can other eCommerce players, websites, and apps create their own DSPs without spending a bomb?
Creating your own DSP from scratch would cost millions of dollars and take months (which again means loss of opportunities, i.e., $$) before you can make it available to your advertisers.
Luckily there are solutions available in the market that can help you get ready in days, onboard your merchants, brands, and other advertisers, at a fraction of the cost.
Kritter stands out amongst them.
Here is a brief feature by feature comparison of Amazon vs. Kritter DSP -
|Amazon DSP||Kritter DSP|
|Inventory||Unique & High-Quality Inventory||Your Inventory + You can integrate any supply source|
|Audience Access||Exclusive Audience||Onboard Segmented First-Party Data|
|Sponsored Products||Yes||Yes + IAB based Native ads|
|Sponsored Brands||Yes||Yes + Customized Ad Units|
|Sponsored Display||Yes||Access to Owned (by you) and external (exchanges) inventories|
|Display Ads Support||JPG, PNG, or RichMedia tags||(.jpg, .png, .gif, banner URL, 3rd party demand tags, HTML5|
|Video Ads Support||1280x720px video thumbnail in addition to the 2560x2560 background image. The thumbnail image must be less than 1MB||Supports video creative of any format (MP4, vast tag, XML) with no limit on file size|
|Custom Ads Support||Custom programs require working with an ad consultant.||Kritter product suite can be enhanced|
Contact us for a custom monetization solution for your eCommerce platform.