The biggest action of the year! Amazon starts the ultimate battle for traffic

During this year's peak season, the battle for traffic among major e-commerce platforms has entered a white-hot stage.

Amazon and Meta have reached a major cooperation, realizing the function of "shopping within social media", which allows users to directly purchase products on the Amazon platform without jumping to other pages. This cooperation is called "the most important advertising product of the year".

Faced with the traffic siege from rivals such as Temu, SHEIN, and TikTok, Amazon is really anxious this time. After cooperating with Meta, Amazon is expected to get more traffic and orders, and sellers can also benefit.

Amazon's big move to grab traffic is coming

Since the beginning of this year, many Amazon sellers have felt that traffic and orders have declined to varying degrees, especially with the arrival of the peak season. Many sellers have reported that they did not feel the peak season. November was still very cold, and there was no upward trend in orders. Compared with the same period last year, Amazon's traffic has dropped significantly, and it seems to have entered a "traffic winter."

Taking this year's Black Friday online promotion as an example, T emu , TikTok, SHEIN and others have significantly extended the promotion cycle to compete for a certain amount of traffic in the cold winter. At this time, Amazon can no longer sit still.

Amazon and Meta are working together to get more traffic from outside. The two parties have launched a new feature that simplifies the conversion process for Amazon sellers.

The new feature is "in-social media shopping," meaning that Meta's social platforms Facebook and Instagram "share accounts" with Amazon , so Meta users can click on ads in Facebook or Instagram and get a store-like experience in the app and make purchases easily. Using a linked Prime account, consumers can purchase products without having to enter bank card details.

Maurice Rahmey, co-founder and co-CEO of Disruptive Digital, described the new feature as “the most important advertising product of the year.” This feature is a win-win for Amazon and Meta.

First of all, for Amazon, there are three benefits:

1. More accurate targeting : Meta will now accurately display Amazon product ads to consumers, helping them find more potential customers;

2. Better conversion rates : Consumers will be able to see ads faster and decide whether to buy when they connect their accounts;

3. More personalized advertising creatives : Meta will customize advertising messages and product pages based on whether the user is a Prime member, and change additional information such as real-time pricing and shipping estimates.

When Amazon's traffic is divided up by platforms such as Temu and SHEIN, cooperation with Meta will greatly increase Amazon's overall traffic, which is tantamount to opening a new traffic entrance.  

Bank of America analysts believe that given Meta's strong positioning capabilities, this collaboration will increase awareness of Amazon products , and because the pre-purchase process is simplified and easy to operate, this may increase advertising conversion rates , helping Amazon drive improvements in retail leverage in 2024 to cope with overcapacity issues.

Secondly, there are many benefits for Meta.

1. Accelerate the platform shopping capabilities : With the support of Amazon's e-commerce foundation, users can use Meta Shop accounts to place orders and settle accounts, helping Meta improve the e-commerce shopping experience, retain users, and increase user stickiness. This cooperation will also accelerate Meta's platform shopping capabilities and help it enter the huge social e-commerce market.

2. Improve the accuracy of advertising: Cooperating with Amazon and sharing advertising data will also improve the relevance and accuracy of Meta advertising to a certain extent.

3. Get more fees : Meta will charge a certain amount of advertising fees for directing traffic to Amazon, and can also obtain a certain amount of sales commission from Amazon. As for the distribution issue, the two parties have not disclosed it.

Amazon sellers are naturally happy to see the cooperation between the platform and Meta. Some sellers believe that this reflects the importance of social media layout, and sellers can also take action to create corresponding accounts.

Judging from the current situation in the past two years, it is really attractive for e-commerce sellers to deploy social media. In the first week of the "Black Friday Pre-sale" event on TikTok's US e-commerce site, personal care and health products such as conditioners, teeth cleaning kits, curling irons, and body fragrance products in the beauty and personal care category all achieved excellent sales.

In 2022, sales of retail social e-commerce in the United States exceeded US$53 billion, and are expected to reach US$107.17 billion in 2025. The prospects for social e-commerce are promising.

Amazon faces huge traffic pressure and makes frequent adjustments

Amazon has extended its hand into the social media field and teamed up with Meta, which is a new attempt to grab traffic. Previously, the e-commerce giant has frequently adjusted the platform's policies due to traffic pressure.

Amazon's latest move is to update an advertising feature, Sponsored TV (displaying products on TV). This feature is similar to domestic TV shopping . The TV will play advertisements for the seller's products over and over again, displaying a QR code during the broadcast. Consumers can scan the QR code with their mobile phones to view the product details page, or use the TV remote control to add the product to the shopping cart.

It is understood that the minimum daily budget for this feature is $10, and it is charged based on 1,000 impressions, and the bid must be less than half of the budget, that is, the daily budget must be set at least $20. Amazon's official daily budget for this feature is as high as $150 to $250.

Some sellers are wondering about this new feature. How can conversion be achieved? Do they hope that consumers will remember the TV ads and place orders directly after watching them over and over again? What is the difference between this and TV ads run by ordinary businesses? Generally speaking, businesses that can run TV ads are all brands with large advertising budgets, and there are no clear requirements for the advertising input-output ratio. In addition, the cost is relatively high, so this type of advertising may only be suitable for some brands.

In the eyes of most sellers, this new feature of Amazon is just a way to make money. An industry insider said bluntly: " Small sellers can just take a look at it. There is no need to invest. They are not big brands. There will be no effect in the short term. This kind of advertising will continue to burn money and it is simply unsustainable . The reason for launching this feature is that Amazon's traffic has declined, and the platform wants to get some traffic from other places. Of course, the sellers have to pay for this traffic. "

This new feature is another attempt by Amazon to divert traffic from multiple sources. Previously, Amazon focused more on diverting traffic within the site.

Last month, Amazon added an ad bidding position, adding "the rest of the search results" to the page, where sellers can set bids. The conversion rate of the rest of the positions is higher than that of the product page, and the bid is lower than that of the top position. It is a position with good cost performance. Of course, bidding will trigger internal competition.

About two weeks later, Amazon Advertising added a time-sharing pricing feature, which allows sellers to choose to increase the advertising premium at any time, and run ads at selected time periods every day or every week, or all day. This time-sharing pricing feature only supports increasing bids, and cannot reduce bids. Sellers found that it did not bring clear performance improvements.

Subsequently, Amazon was no longer satisfied with the adjustment of advertisements. In order to obtain more traffic, it even paid out of its own pocket to subsidize the products. It launched a new "Buy 2 or more, save*%" promotional logo on the seller's page. Buyers who purchase two or more items at a time can enjoy a certain price subsidy, which encourages users to place more orders.

After a series of operations, perhaps the traffic pressure has not been alleviated, and Amazon finally used its trump card and conspired with Meta to keep each other warm during the traffic winter.

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Traffic Wars