Amazon has many tools for driving revenue, and as the reigning titan of eCommerce, the company has the resources to add various internal marketing channels to its site continuously. Editorial Recommendations stand out as one of its newer strategies, being a way for the company to showcase a range of products and potentially increase sales of those products. These Editorial Recommendations offer a host of benefits for the company, one of the biggest among them being that they are independently written by publishers. This mutual partnership between publishers and Amazon allows each to draw in revenue from the Editorial Recommendations, but leads to one interesting question: how much money do these articles really make for the company?
How Amazon Drives Revenue
It bears repeating: Amazon has numerous tools that drive in revenue. It’s not by chance that the company is a part of the trillion-dollar club. Taking a close look at the company’s various internal marketing channels can be a good way to understand how the company operates beyond simply being an online retailer.
The Amazon Best Sellers Rank (BSR) is one of the driving forces behind its search engine results page (SERP). In turn, this has a lot to do with ensuring customers see the hottest products when they search for items on the site, which can be a big motivator behind sales and be a big way to drive revenue.
Sponsored Banner Ads are an excellent way for advertisers to reach a broad audience. With these ads, sellers can choose to target shoppers based on their previous shopping habits and the types of products they are interested in. It’s a great way for advertisers to showcase their products and reach shoppers who might not have seen them otherwise.
Sponsored Listings are similar but appear on search pages. For example, a shopper may search for “children’s clothing.” In addition to the items that arose organically, they will see items being advertised with a small tag noting that they are sponsored.
Amazon is now using two badges to mark some of its most popular items: Amazon’s Choice and Best Seller. An Amazon’s Choice badge shows that an item has a low return rate, ships quickly, is available via Amazon Prime, and has high ratings among other key factors. A Best Seller badge is solely based on the number of sales and a product’s ranking. Either of these badges makes a buyer more likely to purchase the product and, therefore, can increase revenue for both the seller and Amazon itself.
Finally, it is important to note the increasing use of video on Amazon for advertising. Video can be used to promote products and create dynamic ads that can showcase how a product is used, what it can do, and much more. Seeing a product in action can entice a user to make a purchase and drive revenue in a big way.
Editorial Recommendations Provide Social Proof
Editorial Recommendations, being a newer tool in Amazon’s arsenal, aren’t as well known as some others. However, they are quickly proving to be valuable to the company. These articles show up in specific types of searches. For example, a customer may seek out the “best home security camera” or the “best dog toys.” In addition to a list of results, they will also receive a link to an Editorial Recommendation where they can read about different products that suit their search.
Among the many great things about Editorial Recommendations is that they are written by publishers independently of Amazon. In turn, these publishers have the ability to speak to the needs of consumers and their interests, noting the pros and cons of products and making more detailed recommendations of products than what can be seen in just a simple review. Additionally, having a direct recommendation can make a shopper feel more comfortable making a purchase, especially when there are thousands of options and millions of user reviews to sift through. This can be a great way to convert more views of products to actual sales, as shoppers get to know more about the products than what they can see in a typical search through the website.
Editorial Recommendations Provide Lifts to Organic and Paid Listings
Naturally, not all shoppers will click on the Editorial Recommendations listings, especially since not all shoppers have the time (or the inclination) to read an article about the products they are shopping for. However, seeing the Editorial Recommendations and associated items may make shoppers more interested in, and therefore more likely, to click on organic and paid listings, which is another reason these articles are becoming so valuable on the eCommerce website.
At present, it’s still a little difficult to estimate just how much revenue overall Editorial Recommendations drive to Amazon. However, it is known that the articles do drive at least $100M to Amazon in just the United States annually. While this is just a drop in the bucket for a company that makes billions of dollars through its other revenue streams, do remember that Editorial Recommendations are still new and growing. Additionally, the lift they give to organic and paid revenue cannot be forgotten. As they continue to grow, the revenue they bring in will only increase, and their value to Amazon is expected to make even more of an impact.
Editorial Recommendations are a small tool in the company’s arsenal and are used for increasing sales, boosting revenue, and improving conversion rates. However, while it may be small now, it is expected that Editorial Recommendations will play a significant role in the company’s strategy over the coming years, especially as an increasing number of the articles are published on the site and shoppers begin to see more Editorial Recommendations for products as they perform searches.