The power and dominance of the Amazon marketplace continues to build unabated. According to a survey of 2,000 consumers by BloomReach conducted last year, 55 percent of users begin their product search on the e-commerce website, up 11 percent from the previous year. Meanwhile, the percentage of consumers that use a search engine such as Google to begin such a journey has dropped from 34 to 28 percent according to the same study. Furthermore, according to Business Insider, Morgan Stanley forecasts that Amazon single-handedly will account for over half of all U.S. retail growth between 2016 and 2018. With that many eyeballs hitting the e-tailing giant’s site then, it begs the question: would you be better off taking ad dollars from another medium such as television and spending heavily to advertise on Amazon if that is where the audience is? I recently sat down with Andy Latimer, CEO of Bluewater Media, a converged marketing agency focused on selling, who shared a case study examining this very question. The results may surprise you.
Andy Latimer, CEO of converged direct marketing agency Bluewater Media.
According to Latimer, a DRTV advertiser for an emerging brand did indeed spend heavily on DRTV and it was effective at driving traffic to Amazon, just as one would expect based upon the above stated statistics. By virtue of their robust Amazon sales, then, the marketer elected to siphon advertising dollars from DRTV in favor of Amazon advertising including banners and keyword search. That was when the campaign took a wrong turn. In the chart below, you can clearly see that the increase in Amazon advertising did not result in a corresponding lift in sales. In fact, when the advertiser turned off the DRTV, sales actually dropped despite having a heavy presence on Amazon. It seems counterintuitive, right?
The explanation, we believe, lies in the difference between an interruptive communication model and one that is participative in nature. Here’s what we mean:
Television advertising uses a classic interruptive advertising model. A viewer is watching content that interests them, or simply channel surfing, and their quest for entertainment is suddenly interrupted by a commercial that may or may not arrest their attention. If it is successful in doing so, the prospect then switches from a consumer who was passively interrupted to one that is now engaged and interested in learning more about the product or service they’ve been exposed to. Nowadays with the prevalence of smartphones and tablets, many viewers will then take that second screen and begin to conduct research. This is where the participative model kicks in – because the consumer is now playing an active role in their journey to learn more.
This is where Amazon also comes into play. Because the e-tailer has established such a high degree of trust with the public, consumers know they can rely on it to find reviews and opinion – in addition to the best price. So why wouldn’t Amazon advertising then lure them in effectively? Because the consumer is not necessarily looking to be distracted or diverted – they are on a mission to find out whether the original item they saw is worthy of further consideration. Think of it in terms of this metaphor: a garden water well with a hand pump. TV primes the pump (the desire for water) and once the consumer is engaged with that idea, their focus becomes pumping the handle to produce water (as opposed to the multitude of other things they could be doing in their garden).
This theory is supported by examining what happened once TV advertising was resumed. In the chart below, you can see that there is an immediate and corresponding lift in sales once television is reintroduced to the mix.
So why did the ad dollars get diverted in this manner? According to Latimer, the probable cause is that two different media agencies – one buying broadcast and another digital – were involved in managing the campaign. Without full access to the data and competition for ad spend, the client’s best interests were likely compromised. He believes this is powerful evidence as to why it is important to have one integrated agency, that has a view of the entire picture, managing a direct marketing campaign. Furthermore, it is a cautionary tale that shows why it is important that marketers (and their vendors, for that matter) not dismiss one category of media (TV) based upon any preconceived assumptions or bias, but should instead trust the data. Finally, this case study speaks to how effective sight, sound, and motion can be as a catalyst to pump up interest and drive online traffic and sales conversion. As one client once remarked, “DRTV is like turning on a faucet. When we turn it off, sales dry up.” Sounds like words worth heeding. After all, would a marketer rather find themselves in hot water or blowing their sales out of the water instead?
Rick Petry is a direct marketing veteran of over 25 years who has been involved with campaigns that have generated over $1 billion in sales. He provides creative services to both B2C and B2B marketing campaigns and recent projects have included Actegy/Revitive, Education Connection, GOLO, Joybird, and OYO. The author of over 200 articles on direct marketing best practices, Petry has a Bachelor of Arts in Cinema/Television from the University of Southern California and an MBA with a Concentration in Marketing and Sales from Marylhurst University.