In light of the recent speculation that Amazon may acquire Target in 2018 ( https://goo.gl/RqXCc2 ) and with many confused over why the online mammoth is steering towards brick and mortar infrastructure, Amazon’s use of traditional advertising, (specifically Radio), should also be noted. Of course, in the waning days of 2017, Amazon announced plans to make waves in the U.S. digital ad market and attempt to disrupt the Google/Facebook duopoly. So why would Amazon need a traditional ad medium like Radio? For starters, Prime Day 2017.
During the week of July 3rd, 2017, Amazon soared to number 13 in the national advertising Radio commercial airing counts having not even been in the top 100 the week prior. This put them among some of the most prevalent and consistent advertisers we hear daily on U.S. Radio like Geico, Home Depot, and McDonald’s. This makes sense considering that Radio is well-known in the marketing community to maintain the highest weekly consumer reach of any other media, while simultaneously generating campaign awareness lift and delivering quantifiable ROI’s exceeding $23:$1.
Considering Amazon reported spending $7.2 billion in marketing in 2016, landing a top Radio advertiser spot should not be out of the question or out of their budget. In fact, Amazon’s 2016 marketing spend was more than Wal-Mart, Target, Best Buy, Home Depot, and Kroger combined. These are all well-known Radio advertisers, so why wouldn’t Amazon compete in the ad space of which some of these retailers typically dominate? That’s exactly what Amazon did. In the battle for purchases during the 2017 Christmas shopping season, the online giant placed in the top 10 Radio advertisers for four weeks; reaching a high in the number 2 spot and taking a spot at number 11 for a 5th week.
Amazon’s monumental endeavor in Radio advertising in the 2017 holiday season paid off for the online titan, as it touted 2017 to be the “biggest” holiday season ever. Amazon is expected to have grabbed more than 50% of new holiday online sales in 2017. They reported more than 4 million people signed up for Prime (or a free trial) during a one week period in December, as well as more than 1 billion total items sold – including $140 million over the 5 days from Thanksgiving thru Cyber Monday, and the Amazon Echo and Fire TV stick with Alexa remote in command of the best-selling products from any manufacturer in any category. It’s reasonable to conclude that Amazon’s monumental dive into Radio advertising, coupled with recent quantitative reports of Radio’s increased effects on driving online traffic, made 2017 Amazon’s most notable year ever.
(Sources: RAB, Business Insider, Inside Radio, Nielsen, Ad Week, CNBC, 247wallst)