A great majority (65%) of Amazon shoppers don’t notice the ads on the company's website while a quarter find them "useful or relevant," according to the "2018 Amazon Shopper Behavior Study: How Shoppers will Browse and Buy on Amazon" from retail-focused digital marketing agency CPC Strategy.
Amazon’s marketing strength will continue to grow and evolve thanks to its Alexa voice assistant, the researchers also said. Just over 14% of survey respondents made a purchase with a voice-enabled device in the last six months, and 61.3% of respondents who have a voice-enabled device own an Amazon Echo or Dot, according to the study.
The research, conducted by Survata for CPC Strategy, also found that three quarters (74.8%) of Amazon shoppers continue to price check on other sites, according to a press release.
In his argument that Amazon is on pace to become one of the first-ever $1 trillion companies by the end of this year, Morgan Stanley analyst Brian Newark noted a few months ago that its advertising business is formidable, with an estimated 22% compound annual growth rate by 2022, by his measure. JP Morgan similarly estimates that Amazon’s advertising revenue could surge 61% this year to $4.5 billion from $2.8 billion in 2017, according to CPC Strategy’s report. And Forrester Research, which found that 44% of ad buyers already use Amazon’s Advertising Platform, expects marketers to increasingly turn to it.
Last year nearly 50% of Amazon shoppers reported they were open to "occasionally" or "frequently" trying new products or brands on Amazon, and this year, that number has jumped to nearly 80%, CPC Strategy found.
"The number of Amazon shoppers who either don't notice ads on Amazon or find them 'useful and relevant' is truly mind blowing,' CPC Strategy CEO and cofounder Rick Backus said in a statement. "There are very few advertising channels where that's the case. Amazon has been improving their native advertising experience for shoppers, and it's clearly paying off."
Alexa promises to play a major role in Amazon’s smooth marketing play. Consumer goods giants like Procter & Gamble and Clorox are reportedly mulling advertising via the e-commerce giant's Echo devices and Alexa voice assistant. The company itself set optimistic projections for the virtual assistant last year, and they were roundly exceeded, the company said in January. "We don’t see positive surprises of this magnitude very often — expect us to double down," CEO Jeff Bezos said about Alexa's fourth quarter and year-end results.
"We expected that some Amazon shoppers owned Amazon's voice enabled devices and had made purchases using Alexa, but we weren't prepared to see numbers like this so early into the game,” CPC Strategy COO and cofounder Nii Ahene said in a statement. "The battle for ultimate marketplace dominance isn't over, but Amazon is off to an early lead."
While it rakes in money and attention through its advertising business, however, Amazon clearly must stay vigilant on price, as its customers have made a habit of making sure they're getting the best deal there or elsewhere. Research shows that Amazon and Walmart are in a tight race, and that Walmart is closing in online. Amazon, as Walmart has long done, is reportedly playing hardball with those same consumer goods vendors in an effort to drill down fulfillment costs.
For its study, CPC Strategy asked 1,500 shoppers how they feel about ads on Amazon, how often they use Amazon to discover new products or brands, and the biggest factors in their decision to purchase items.