Amazon is not only the largest online retailer in the UK, but also one of the fastest-growing advertising platforms. As such, it represents a key avenue for media spend. However, most brands in L2’s Digital IQ Index: FMCG UK are still getting used to the idea of Amazon as an ad platform.

With only 17% ownership of sponsored product ad space on branded and unbranded terms, brands in L2’s study have left themselves vulnerable to disruptors, which have taken key ad spots across categories. To compound the issue, many brands are burning their budgets on less visible placements. Overall, three-quarters of sponsored product listings from brands in the study appear at the bottom of the page, rendering them virtually invisible.

Amazon listings

Pay-per-click ads on Amazon search, which are served through an auction similar to Google AdWords, provide both new and established brands with an opportunity to stand out. The two main ad formats are headline ad banners, which appear at the top of search results, and individual sponsored products, which occupy the first spots in the list of results.

Given their position on the page and ability to incorporate up to three individual products, headline ads provide brands with a much stronger opportunity to stand out. Ariel, Neutrogena, Burt’s Bees, and Lenor all purchase headline ads against rivals on competitive branded terms.

At the enterprise level, Procter & Gamble is the clear leader, buying more sponsored products and headline ads than all other enterprises combined. Cleaning brands Ariel and Fairy and shaving brands Gillette and Braun are the main investors. Given that Amazon’s organic search algorithm promotes products with good sales records, investing in paid listings can also positively impact organic search performance.

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