Rewriting the Laws of Marketing in the Age of Amazon
Seemingly, every day there is more news about Amazon’s rapid growth, especially with Prime Day just around the corner. The reality is that a brand that wasn’t even on our radar three decades ago is seemingly rewriting the rules of business.
Don’t believe me? Consider these three tenets of marketing that are no longer so certain anymore.
The Project Management Triangle Has Been Forever Broken
The Project Management Triangle was first introduced in the 1950’s. Simply stated, the Triangle posits that among scope (or quality), time, and price, only two of the three can be maximized without compromising a third.
Want something very fast and very cheap? The scope or quality will be limited. If quality and speed are your ultimate goals, then you should expect to pay extra for it. There are numerous examples, and for decades, no business shattered the triangle — until Amazon.
On Amazon, the introduction of Prime has mostly leveled the playing field for time while the near-auction aspect of pricing has driven margins precipitously low for many sellers. And just in case a seller is looking to skimp on quality, those pesky reviews are there to communicate to buyers what they should expect. Skimp too much, and your negative ratings will drive conversions even lower.
Amazon has forever broken the Triangle. Now, the platform demands sellers push all three corners with equal effort to stay in the game. Sellers need to find ways to minimize price, while maximizing quality and deliverability. For most of us, this is an entirely new way of thinking.
Competitors Can Advertise On Your Product Page
In business, exclusivity is powerful. Whether you’re seeking a trade show booth far from your competitors or have negotiated with a franchisor to not open any stores within a few miles of yours, we all seek elbow room to maximize profit. But this isn’t true on Amazon.
In fact, the platform encourages competition at every corner, promoting what customers end up buying when confronted with your product. Opportunities are given for your competition to buy space on the very page your product is listed, and that available real estate extends all the way to the buy box where the sale is made.
As a seller, you’ll need to envision your product descriptions and photos in the context of how they will appear directly beside your top competitors — because on Amazon, they will.
Advertising Is Guaranteed To Work — So Long As Your Product Does
John Wanamaker famously said that he knew half of his advertising didn’t work. He just didn’t know which half. And while digital marketing has removed much of our guesswork, there are still some reasonable questions to ponder. Take a Google-branded ad for instance. Since someone sought out your brand, isn’t it logical to assume that consumer would have ended up on your site anyway? Why bother paying for that click?
Amazon, knowing that digital attribution still isn’t all that it needs to be, makes no bones about it. The more money you spend on advertising, the better your organic rankings on the platform will be. Unlike Google, with its famed wall between paid and organic, Amazon has no wall at all.
Consider how unique that is. This is like a retailer at the mall advertising on more billboards and being guaranteed that more people will come in their store because of it — even people who never even saw the billboard. It’s bonus traffic awarded to you for spending money on ads. And the more you do it, the more traffic you get.
While this might sound new to businesses, it really isn’t. The same “slot” fees that retailers have charged at brick and mortar stores for years exists on Amazon, but instead they’re in the form of paid advertising. Similarly those who pay the most will get the prime position.
As marketers, we often look to the past for inspiration for our newest strategies. When doing so it’s equally important to realize that, in Amazon’s new marketplace, some of the rules have forever changed. Amazon disrupted the retail industry, and now it’s doing the same in the world of marketing.