Amazon Advertising is becoming increasingly competitive, with brands and retailers investing more than ever into their media budgets and optimization strategies. In response to these rising costs, the company recently launched its Brand Referral Bonus program, a new advertising initiative meant to benefit both brands and Amazon.
According to Feedvisor’s 2021 survey of more than 1,000 U.S. brands, 88% of brands are now utilizing Amazon’s ad capabilities, a 21% increase from the year before. Additionally, brands are also becoming more selective with their ad strategies — 29% say they advertise more during key periods like Prime Day, back-to-school season, and the Q4 holiday season. The Brand Referral Bonus program is Amazon’s latest offering designed to help brands monetize their off-Amazon efforts while directing traffic to Amazon’s platform.
Read on to find out more about how the program works as well as the benefits and opportunities it can provide brands that choose to participate in the initiative.
What Is Amazon’s Brand Referral Bonus and How Does It Work?
The new Brand Referral Bonus program was created as another tool to connect marketing efforts both on and off Amazon, offering brands a monetary bonus for driving traffic to the company’s platform.
The program provides members with an average bonus of 10% on any product sales that were driven by their non-Amazon marketing and advertising campaigns.
The bonus is given as a credit on a brand’s referral fee, which is the percentage Amazon charges for selling an item on its site. Referral fees will vary by category, according to the company, but are typically between 8% and 15%. Additionally, Amazon will offer the same bonus for customer purchases of other items from your brand for up to 14 days after they click on your ad.
While the new program was built for brands, sellers have their own initiative called Amazon Associates, another program for monetizing non-Amazon marketing campaigns that drive traffic to listings on the platform.
How Do Amazon and Brands Benefit From This Program?
For any business that wants to take advantage of the bonus, the program is a great way to help reduce the cost of referral fees, which — along with Fulfillment by Amazon (FBA) and other fees — can often limit a brand’s ability to invest in advertising that will drive traffic to Amazon, like paid social and other channels.
Beyond the financial boost, the company claims that the Brand Referral Bonus program will improve efficiencies with brands’ non-Amazon advertising campaigns and help them accelerate growth.
As for Amazons itself, the initiative is poised to relieve some of the pressure from the growing competition on its CPC offerings while providing the company with a new avenue for influencing brands and the way in which they direct their paid media traffic. By incentivizing brands to shift their off-Amazons advertising focus toward driving consumers to their listings on the platform, Amazons will receive a greater boost in traffic as well as better organic search placement for products.
The launch is also seen by many experts as a move to counter the rapid growth of Shopify, aligning Amazon’s fees more closely with its budding online competitor, according to Marketplace Pulse.
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