This blog was updated on March 14, 2024.
Change happens quickly and constantly in the world of ecommerce – especially on Amazon. That platform is much different today than just a few years ago. As a proven marketplace agency that has helped generate over $1B in Amazon sales for brands worldwide, we understand the importance of not only keeping up with Amazon’s latest changes, but anticipating the ones to come. To help your brand prepare for a prosperous new year, we’ve compiled the most exciting Amazon marketing trends to watch in 2024.
Generative AI
After the launch of user-friendly chatbots in late 2022, generative AI emerged as a hot topic due to the simplicity of generating text and images on command. A BCG survey from April 2023, which included over 200 CMOs across North America, Europe, and Asia, found that 70% were already implementing generative AI, with an additional 19% exploring its use. The key interests lie in personalization, content creation, and marketing segmentation.
Over 70% of these marketing leaders are optimistic about AI’s potential, particularly as recent advancements facilitate creative advertising development. For instance, Amazon Ads’ AI-driven image generation tool (beta) aids in crafting lifestyle images to boost brand ad performance. Additionally, Amazon CTO Werner Vogels highlighted the advent of non-Western large language models in languages such as Arabic, Chinese, and Japanese. This development could democratize generative AI for more diverse global demographics, considering the current overrepresentation of English online. More varied data supports marketing approaches that are culturally nuanced and accurate.
At a CES panel, Amazon’s VP of U.S. ad sales, Tanner Elton, emphasized AI’s role in generating more relevant advertising, noting its positive impact on viewer experience and performance metrics. He believes AI advancements will significantly enhance the creative dimension of marketing, leading to better measurement outcomes.
Media Sustainability
The later part of 2022 marked a significant turning point in the adoption and awareness of generative AI among the general public, following the release of several user-friendly chatbots. This technology showcased the straightforwardness of generating textual content and images through simple user inputs, sparking widespread interest and discussion. A comprehensive survey conducted in April 2023 by BCG, which included responses from over 200 Chief Marketing Officers (CMOs) across North America, Europe, and Asia, revealed that a substantial majority (70%) reported their companies were actively utilizing generative AI technologies, with an additional 19% in the experimentation phase. The areas where generative AI found particular interest among these marketing leaders were in personalization efforts, content generation, and the segmentation of marketing to target specific customer groups more effectively.
The enthusiasm for AI within the marketing community is largely driven by the tangible benefits it promises. Notably, recent progress in machine learning technologies has simplified the process of developing creative advertising materials. For instance, Amazon Ads has introduced a beta version of an AI-powered tool capable of generating high-quality lifestyle imagery, which has shown potential in enhancing the effectiveness of brand advertisements. Amazon’s CTO, Werner Vogels, highlighted the increasing availability of large language models tailored for non-Western languages, such as Arabic, Chinese, and Japanese. This development is poised to democratize the benefits of generative AI, making it accessible to a broader range of people across different linguistic and cultural backgrounds. Until now, the digital content landscape has been predominantly dominated by resources in English and other “high resource” languages, leaving significant portions of the global population underserved. The expansion of AI technologies into more diverse languages promises to enable marketers to engage with global audiences in ways that are culturally authentic and sensitive.
Looking ahead to 2024, the advertising industry is set to maintain its focus on media sustainability as a core concern. In a move to underscore its commitment to this cause, Amazon Ads announced its participation in the Ad Net Zero initiative in June, aiming to significantly reduce the carbon footprint of advertising activities. This commitment was further solidified through a partnership with the Climate Pledge, a collective of over 400 companies dedicated to achieving net-zero carbon emissions by 2040. The inaugural annual report from Ad Net Zero outlined two critical actions required from its supporters: the establishment of a publicly declared science-based target for achieving net zero by June 2024 and the commitment to annual reporting on progress towards this goal.
The 2023 Higher Impact report highlighted a growing trend among consumers who prefer brands that demonstrate a commitment to sustainable practices, with a 6% increase from the previous year. By November, when the report was published, an impressive 88% of brands supporting Ad Net Zero had announced their sustainability targets publicly. With increasing consumer expectations and the introduction of more stringent disclosure mandates, the advertising sector is under close scrutiny to ensure that public declarations of sustainability translate into substantive, verifiable actions.
Streaming TV
Connected TV (CTV) is reshaping the media landscape as linear TV advertising spend declines annually through 2027. With consumers shifting away from linear TV, streaming options have expanded, causing further fragmentation in digital entertainment. Services like Prime Video aim to consolidate this space, offering a mix of movies, TV series, and live sports. Starting in 2024, Prime Video will introduce limited ads in its content, with an ad-free tier available for an extra monthly fee. In late 2023, IPG Mediabrands partnered with Amazon Ads to leverage Prime Video ads in connecting brands with targeted audiences, rolling out the initiative in the first nine countries over the next year.
During CES, Elton highlighted the impact of Prime Video ads, referencing how “Daisy Jones & the Six” integrates various media, from books to podcasts, enhancing audience engagement. He emphasized the unprecedented opportunity for precise audience targeting across multiple platforms and touchpoints.
eMarketer projects CTV spending to reach about $30 billion in 2024, driven largely by investments in Prime Video ads. However, Prime Video won’t be the sole new entrant in the streaming arena. Deloitte predicts that leading streaming services will significantly increase their subscription options, from an average of four in 2023 to over eight by 2024, adapting to consumer demands.
Live Sports
The growing fascination with live sports, a domain consistently drawing impressive viewership numbers across various age groups, is poised for further expansion in the coming years, especially into 2024 and beyond. This trend is underscored by the remarkable success witnessed with the second season of Thursday Night Football on Prime Video, which experienced a notable 24% jump in total viewership. Importantly, this increase wasn’t just across the board; there was a significant 14% rise in viewership among the younger demographic of 18-to-34-year-olds compared to the year before. The traction live sports gains is capitalized on by advertisers through innovative engagement techniques, such as interactive video ads. These ads, known for their efficacy, command nearly 20 times more interactive engagement compared to traditional formats, proving particularly potent in navigating potential customers to designated landing pages.
Prime Video’s foray into the live sports broadcasting arena is set to deepen, especially with the anticipation surrounding the year 2025, when it will start the exclusive broadcast of five NASCAR Cup Series races, underpinning a new seven-year media rights agreement. This strategic move not only demonstrates Prime Video’s commitment to harnessing the lucrative opportunities in live sports broadcasting but also its intent to widen its reach among viewers through such high-profile sporting events.
In a parallel development underscored by Deloitte’s forecasts for 2024, women’s elite sports are on the cusp of an unprecedented milestone, poised to generate global revenues surpassing $1 billion for the first time. This financial uplift is expected to be led principally by soccer and basketball, contributing 43% and 28% to the revenue pool, respectively. The momentum for women’s sports has been significantly buoyed by record-setting TV audiences for key events like the FIFA Women’s World Cup and the women’s NCAA championship in 2023. These achievements, especially on the eve of the Summer Olympics, spotlight the burgeoning interest marketers should adeptly leverage.
Adding to the discourse on marketing innovations, a scenario illustrated by Elton during CES highlighted Prime Video ads’ pivotal role in creating synergistic touchpoints across various mediums like books, podcasts, and Amazon Music. Through the example of popular content like Daisy Jones & the Six, Elton shed light on the unparalleled opportunities for engaging with consumers through a meticulously timed and content-aligned messaging strategy. This strategy underscores the evolving landscape of consumer engagement that transcends traditional boundaries to encompass a multi-platform approach.
Moreover, projections by eMarketer regarding connected TV (CTV) advertising expenditures suggest a steep climb to the tune of $30 billion in 2024, with a significant portion of this increase attributable to new investments in Prime Video advertisements. However, the landscape of streaming is rapidly evolving, with Deloitte estimating a substantial increase in the variety of tiered streaming offerings. From an average of four options in 2023, top streaming services are expected to diversify their packages to eight or more by 2024, tailoring their services to match the evolving consumer preferences and maintaining competitive edge in the digital streaming domain.
Addressability and Relevancy
As the trend of consumers gravitating toward streaming services continues to grow, the challenge of delivering targeted and relevant advertising becomes increasingly critical. This importance is magnified in the wake of the anticipated phase-out of third-party cookies in 2024, a cornerstone technology for tracking user behavior across the internet. Recognizing the impending shift, brands have been proactively preparing to adapt to this ‘new normal’ by exploring and adopting alternative, cookieless technologies. One such technology gaining traction is contextual targeting, which allows for the placement of ads based on the content of the web page, thus offering a more seamless and less intrusive user experience.
The transition away from reliance on third-party cookies necessitates a broader shift in strategy for companies. This shift is likely to involve the integration of advanced capabilities provided by artificial intelligence (AI) into their marketing strategies. AI can significantly enhance data optimization and audience segmentation efforts, making advertising efforts both more efficient and effective. However, this technological pivot must be balanced with a commitment to transparency towards consumers and compliance with tightening regulations issued by both local and federal government bodies. This balance is particularly pertinent in light of findings from the Pew Research Center in 2023, which revealed that a significant majority of Americans, 67%, admitted to having little to no understanding of the ways in which companies utilize their personal data. Furthermore, an overwhelming 81% expressed concerns over the potential misuse of their information by these entities.
Despite these challenges, there remains a clear path forward for brands to effectively engage with consumers. By leveraging AI and other digital technologies to deliver accurately targeted and highly relevant messages to specific audience segments, companies can enhance the effectiveness of their advertising efforts. This approach not only addresses consumer concerns regarding data privacy and ad relevancy but also drives higher engagement levels. Consequently, brands can maintain, and potentially even elevate, their advertising impact in the evolving digital landscape, ensuring that their messages resonate with and reach the right audiences at the right time.
Channel Key Takeaway
Amazon likes to implement changes that help solve problems and improve the customer experience. This is the one constant that guides the future of the largest ecommerce marketplace in the U.S. Each of the trends outlined above makes it easier for shoppers to connect with the brands and products they like, and vice versa. Channel Key predicts that Amazon will explore these key areas by launching a wide range of beta tests in 2024. Staying up to date about these innovations will help keep your brand at the forefront of change and ahead of your competition.
