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| Amazon attracts Facebook advertisers after Apple changes |
After the world's largest online retailer switched to digital advertising at the expense of market leader Google, Amazon began luring advertisers from Facebook as shoppers often bypassed the search giant and searched for products directly on Amazon.com.
Over the years, Facebook has ranked second in digital advertising sales in the United States. In June of this year, Apple renewed iPhone privacy, making Facebook ads less effective.
This has led some brands to seek advertising alternatives from social media giants and their Instagram departments.
Amazon has about 153 million Prime users in the US, which is an obvious choice.
The move from Facebook to Amazon has only taken place recently and it is too early to assess the extent or persistence of this phenomenon.
Many brands are still hesitant to sell on Amazon because they fear losing direct contact with customers.
But New York-based marketing agency Bellardi Wong, which has 300 clients, includes furniture maker Blue Dot and clothing retailer Bombas. She said that more than 40% of her June listing indicated that the effectiveness of her Facebook ads had waned, forcing her to eagerly search for alternatives.
"We're seeing more and more customers entering Amazon and other markets," the agency representative said. More and more customers are selling on Amazon and they have a huge market.
Vanity Planet, a Belardi Wong customer that sells facial sprays and other home health products, has cut its Facebook ad budget by 22% this year. Part of that is due to privacy changes and sending half the money back to Amazon.
"We have to find a way to grow our business," Newport Beach said. We are working to reduce ad spend on Facebook. The place I've grown the most is Amazon.
Amazon attracts Facebook advertisers
The Seattle-based giant has delayed its entry into the digital advertising market by $191 billion. So as not to scare off buyers from a site full of ads.
Today, advertising is one of the company's fastest growing and most profitable product lines, complementing the low-margin e-commerce business.
The company now owns 10.7% of the US digital advertising market, while Google and Facebook own 28.8% and 25.4%, respectively.
In the second quarter, Amazon's other category (mainly advertising revenue) increased by 87.5%, while Facebook's ad sales increased by 56%.
Thanks to Apple, Amazon now has a chance to capture more of the advertising market. The iPhone software update asks users if they want to track their online activities.
Only 25% of users choose to have apps to track their behaviour. Less tracking makes it more difficult for Facebook to customize its ads to help businesses find their customers.