Prime Day Is an Advertising Windfall for Amazon

Amazon found a way to make Prime Day more profitable - for itself. It's pushing third-party sellers to advertise during the annual shopping event, and many are likely to follow that advice to try and get an edge over the competition. No wonder it turned Prime Day into a 2-day event!

On a special landing page, Amazon makes its pitch to sellers to fork over money to get greater exposure for their inventory. "Advertising with sponsored ads can help you drive sales, brand visibility, and reach, amplifying your Prime Day success," it states.

It backed up its claim with the following statistic: "Last year, sponsored ads advertisers observed a 5x increase in ad-attributed sales from their sponsored ads campaigns during Prime Day 2018, compared to their ad-attributed sales in June." It based the analysis on internal data using the 24-hour period of July 17, 2018.

This year, Prime Day runs for 2 days, July 15 and 16th. In a blog post last week, Amazon offered some suggestions on reaching shoppers though its advertising programs:

- "Reach Prime member audiences that visit Amazon before, during, and after Prime Day. You can engage Prime member audiences at scale by showcasing your brand, promoting your upcoming and live Prime Day deals, and reengaging your audiences even after Prime Day while your brand is still top of mind for shoppers."

- "Engage new audiences. You can promote your deals as a way to introduce new audiences to your brand and entice them to try your products for the first time. As a result, you may observe an increase in shoppers that are new to your brand on Prime Day."

- "Drive sales across your portfolio of products. As shoppers browse and shop for deals, they are likely to buy other, non-promoted products that they come across. You can use advertising strategies to not only drive sales through your deals, but also for other products within your brand portfolio."

In videos on the Prime Day Advertising landing page, sellers lavished praise on Amazon ads, with one seller saying he was going to prepare for Prime Day by increasing his budget threefold.

Merchants are eager to take advantage of the presumed uptick in traffic to Amazon, but cutthroat competition can take a toll on sellers' margins, making Amazon the clear winner.

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