Amazon Ads Introduces Game-Changing Solutions for Advertisers

At the recent unBoxed 2024 event, Amazon Ads announced several major updates designed to change the way advertisers manage campaigns and measure success.

The new tools promise to enhance product launches, simplify ad management, and optimize performance, offering advertisers a more powerful and efficient experience across the Amazon ecosystem. 

Here’s a closer look at the key changes and what they mean for advertisers.

Full-Funnel Optimization: A New Era for Amazon Ads

One of the biggest announcements from Amazon Ads was the introduction of full-funnel optimization capabilities, providing advertisers with insights at every stage of the customer journey. These tools simplify how brands manage campaigns across the entire funnel—from discovery to conversion.

Amazon’s new product launch campaigns allow advertisers to quickly introduce new products across Amazon’s platforms and partner publishers, reaching high-value customers early on.

For example, an ad for a new product could first appear on Prime Video, followed by an audio ad on Amazon Music, and then a display ad on the Amazon platform. These consistent touchpoints guide customers from awareness to consideration, eventually leading to purchase. 

Early adopters of this service saw a 9% weekly sales growth, demonstrating the huge impact of Amazon's holistic approach to advertising.

For advertisers, this means:

• A more streamlined path to market for new products.
• Increased ability to guide potential customers through a journey that feels seamless, natural, and engaging.

Bid Boosting for Sponsored Ads and Sponsored Brands

Amazon’s new audience bid boosting for Sponsored Products and Sponsored Brands allows advertisers to engage specific, high-value customer groups more effectively by adjusting bids for custom audiences.

Using Amazon Marketing Cloud (AMC), advertisers can now create targeted audiences—like those who saw their streaming TV ads but haven’t made a purchase—and bid higher for these key segments. This increased precision helps drive greater product discovery, engagement, and conversions.

For example, a brand that runs both streaming TV ads and Sponsored Products can use AMC insights to create a custom audience of users who viewed their streaming ad and then increase bids when these users search for their product.

This boosts the chance of capturing these engaged shoppers’ attention at a critical moment in their buying journey. By tapping into insights across Amazon Ads touchpoints, brands can better reengage audiences throughout the funnel and optimize their return on ad spend.

However, with these advantages come several new challenges.

New Complexities for Advertisers

1. Increased Complexity in Campaign Management

With the ability to create custom audiences using AMC, advertisers now face the challenge of managing multiple audience segments. Each audience may require different bidding strategies, which can make campaign management more intricate. Advertisers must constantly monitor and adjust bids for various segments, adding layers of complexity to their advertising efforts.

2. Potential for Inefficient Spend

While audience bid boosting enables advertisers to target high-value segments more precisely, there’s still the risk of overspending on audience segments that don’t convert as expected. If you misidentify high-value audiences or mismanage bids, for example, you could end up wasting budget on ineffective campaigns.

3. Learning Curve for Implementation

Transitioning to a more sophisticated bidding strategy using AMC insights requires time and experimentation. Brands must learn how to create and implement custom audiences effectively, which can slow down the advertising process. This learning curve might delay the realization of benefits from the new features.

4. Competitive Pressure

As more brands adopt these advanced targeting capabilities, the competition for high-value audiences could intensify. This increased competition may drive up bid prices, making it challenging for individual brands to maintain profitability while trying to reach these desired customer segments.

While audience bid boosting offers enhanced targeting and potential for improved returns, it also introduces complexities that advertisers must navigate carefully.

But the game-changing aspect here is that advertisers can now act on the insights AMC provides directly within their Sponsored Ads campaigns. This offers a more seamless, full-funnel strategy, allowing businesses to optimize their bidding strategies in ways that were previously only available through Amazon DSP, but now extend across Amazon Ads’ suite of sponsored products and brands.

Enhanced Audience Targeting with New AMC Solutions

In conjunction with audience bid boosting, AMC offers new solutions designed to help AMC users better understand customer behavior and improve their ad strategies.

AMC’s new solutions let advertisers easily combine their own data with Amazon Ads signals to better understand customer behavior and improve their ad strategies. With no-code features, brands of any size can access advanced analytics without needing technical expertise.

It's important to note that these new AMC-based audience targeting capabilities are conceptually very similar to DSP audiences, but they also have major differences in access and execution. An AMC endpoint is required to gain access, and sponsored ads have less reach and different placements compared to DSP. Brands will also need to know what to look for if they plan to build audiences beyond basic retargeting.

The new AMC solutions include:

1. High-Value Audience Analysis

This tool helps advertisers quickly identify which customers are the most valuable based on their spending habits.

If a brand wants to target customers who have spent the most in the past three months, they can use this solution to visualize their customer base by total spend levels.

With just a few clicks, the brand can create audience segments based on this data and then target these high-value shoppers in future campaigns. This ensures that advertising efforts focus on the most profitable customers, boosting the effectiveness of their spend.

2. Optimal Frequency Analysis

The optimal frequency feature helps brands determine how often they should show ads to the same customers to maximize results without overwhelming them.

By monitoring key performance indicators (KPIs) like conversion rate and return on ad spend (ROAS) as ad interactions increase, advertisers can identify the ideal number of ad exposures that lead to the best results.

If a brand sees that customers who view their ads five times are more likely to make a purchase, they can set frequency caps to ensure those customers see the ad the right number of times. This approach helps balance ad visibility with cost efficiency, ensuring advertisers don’t waste budget on redundant impressions.

Companies like Honest Kitchen have already seen impressive results using these tools—boosting impressions by 23% and product page views by 44% without increasing their budget.

The introduction of audience bid boosting alongside enhanced targeting features in AMC marks a pivotal moment for advertisers.

While the new complexities present challenges, the potential for refined targeting strategies and improved campaign performance can lead to substantial benefits for those willing to adapt. By focusing on high-value customers and optimizing ad frequency, brands can ensure their budgets are spent effectively, driving greater engagement, conversions, and ROAS.

Multi-Touch Attribution and Long-Term Sales Insights

One of the most anticipated updates is Amazon’s new multi-touch attribution (MTA) model. This feature moves beyond last-touch attribution, allowing advertisers to measure the impact of every ad interaction along the path to purchase.

By analyzing trillions of shopping, streaming, and browsing signals, MTA gives advertisers a clearer understanding of which touchpoints are driving conversions. This data will be available in AMC, and a full rollout is expected in 2025.

Conversion Path Reporting

To help advertisers leverage the insights from multi-touch attribution, Amazon Ads is launching conversion path reporting. This feature shows brands their top-converting paths to purchase over the past 30 days, making it easier to understand how different ad interactions contribute to conversions.

For example, advertisers might discover that their TV ad appears in their top-converting paths, indicating its role in driving conversions through lower-funnel channels. Essentially, this offers valuable cross-channel insights necessary to balance investments between brand-building and performance marketing objectives. For agencies managing Amazon Ads programs, it empowers them to demonstrate the true impact of their media mixes to clients.

Currently in closed beta, conversion path reporting will soon be available in Sponsored Ads and Amazon DSP. It is expected to roll out to US advertisers in open beta later this year.

Long-Term Sales Insights

Furthermore, Amazon is introducing long-term sales insights, which enables brands to measure not just immediate sales but also the long-term impact of their campaigns. This is especially crucial for upper-funnel tactics, where the goal is to build awareness and consideration that leads to conversions months later.

For advertisers, this level of detail means better campaign planning and the ability to optimize future strategies based on a more comprehensive view of performance.

Streamlined Campaign Management and Global Expansion

Another major development is Amazon’s update to its demand-side platform (DSP). A new user interface simplifies campaign creation, cutting setup time by 75%.

Frequency cap controls ensure that budgets aren’t wasted on duplicate impressions, helping advertisers achieve up to 21% incremental reach while saving up to 26% on campaign costs.

In a move that will further bolster Amazon’s global ad reach, Prime Video ads are set to expand into new international markets, including Brazil, India, and Japan. This global expansion reflects Amazon's aggressive strategy to dominate the streaming and connected TV (CTV) ad space, positioning itself as a leader in both ecommerce and video advertising.

With Prime Video reaching over 200 million customers worldwide, and its ad-supported streaming service growing rapidly, advertisers now have more opportunities than ever to reach diverse, global audiences through Amazon’s various platforms, including Twitch, Freevee, and Amazon Music.

AI-Powered Ad Creation and Insights

In addition to full-funnel optimization, Amazon has released a range of AI-powered tools that simplify the creative process and deliver smarter insights.

The AI Creative Studio now includes an audio generator capable of producing 30-second ads, complementing Amazon’s existing video and image generation tools. This allows brands to quickly develop engaging ad content with minimal effort and at no additional cost.