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Amazon First-Party Sellers Hold Edge in Sponsored Product Ads

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Amazon logoAmazon’s “Buy Box” contains the Add To Cart button on a product’s page. Being the seller who is the focus of the Amazon Buy Box gives that seller an advantage in getting a sale. Winning that Buy Box requires much from the successful seller.

Amazon’s own help page on the Buy Box topic says “Sellers must meet performance-based requirements to be eligible to compete for Buy Box placement. For many sellers, Buy Box placement can lead to increased sales.”

We learned more about the Buy Box and some important advertising trends from Merkle, whose Digital Marketing Report for Q4 2017 became available recently. Mark Ballard, Vice President of Research at Merkle, provided EcommerceBytes with more details.

“While the strategy for managing Sponsored Products is usually fairly similar for both first and third-party sellers, first-party sellers do typically have an edge in terms of winning Amazon’s Buy Box, a requirement to show a Sponsored Product,” said Ballard

“This is because Amazon is considered the seller and thus likely ranks highly in all of the criteria considered in determining a Buy Box winner, including type of fulfillment method, product price, and shipping time. Winning the Buy Box means that a brand is the default seller when someone lands on a product page, and a third-party seller can still win it even though first-party sellers have the advantage.”

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“However, Amazon owns all of the data associated with each sale for first-party sellers, which is not the case for third-party sellers,” Ballard said.

Regarding other advertising hot topics, Ballard noted the value of search ad clicks has improved, leading to advertisers showing increased willingness to pay higher costs per click (CPC.) He singled out a few factors contributing to this.

“Advertisers have increasingly adopted audience-targeting methods to reach the best performing traffic segments. We have also seen a decline in traffic share for Google’s search partners, which tend to underperform for advertisers compared to Google itself,” Ballard said.

“Last, Google regularly tweaks its ad serving algorithms and, in recent months, we’ve seen a larger share of clicks being produced by ads at the very top of Google’s listings,” he said. “These ads are at the top of the page because they perform well and advertisers have bid them up accordingly.”

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David A Utter
David A Utter
David A. Utter is a freelance writer based in Lexington, KY. He has covered technology topics from search to security to online business and has been quoted in places like ZDNet and BusinessWeek. He considers his appearance on NPR's "All Things Considered" with long-time host Robert Siegel a delightful highlight. You can find him on Twitter @davidautter and on LinkedIn.