Acquisition Channel Opportunities: Amazon Ads, Zero-click Search, Instagram Engagement
Want to get more paying users? I've identified the top 3 news from this week on different acquisition channels (Organic search, Amazon Ads, Instagram) to help you excel in this area:
- Does Amazon make more from ads than AWS? Benedict Evans, an independent analyst, provides a surprising answer.
- Are you likely to be getting less search traffic from Google due to zero-click search results? Rand Fishkin, the founder of Moz, and Google provide their own perspectives.
- A new study looked at Instagram engagement rates, based on 102 million posts. Learn about the results and how to make use of the insights;
Let's dive in.
1. Amazon Ads = A Huge Acquisition Channel Nobody Talks About?
The assumption: If you've been reading how Amazon makes their profits, you've heard things like AWS and how Amazon is losing money for its main marketplace business.
The (likely) truth: Amazon makes similar, if not more profit from Amazon Ads. Benedict Evans, an independent analyst, wrote a recent article where he analyzed Amazon's public financial data reports.
The conclusion: Yes, Amazon is very likely to be making similar, if not bigger profits from Amazon Ads as compared to AWS:
At the top end, if we assume that $20bn of Amazon’s $21.5bn ‘Ads and other’ was actually ads, and it matched Google’s operating margin, that would be $13.6bn of operating income.
For a comparison, YouTube reported making $19.7bn in advertising revenue in 2020. That's very close to what Amazon is likely making.
What this means for you: Benedict's article went on the front page of Hacker News and the comments were mostly positive. Here's the top one that also captures the whole opportunity of using Amazon Ads:
This is a good read. For a long time I explained to people that the value of search advertising was that it matched a buyer who had just asked a buying question with advertisers who wanted to answer that question. This was HUGELY different than previous Internet "banner" advertising.
Think of it this way; I put a poster up in the metro that says "Best Deals on Rolex watches" and a million people a day "see it" but a vanishingly small number want to buy a Rolex. However, if Google gets a query "Where to buy a Rolex" or "best deals on Rolex watches", well you know that person is perhaps already considering buying a watch, so you want first crack at the deal.
The secret sauce was instantly pairing "commercial intent" (or the intention to do some commercial action, buy, sell, hire, etc.) with vendors and firms who can satisfy that intent or "aspects" of that intent. (You might get an Uber ad on a query for "restaurants near me" for example)
Amazon has that in spades. If you are on the Amazon site, that is a huge signal that you are intending to make a commercial transaction - whether on Amazon directy or through a local retailer.
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2. In 2020, Two Thirds of Google Searches Ended Without a Click. Yet, Google is Sending More Traffic to the Open Web Than Ever.
Rand Fishkin, the founder of Moz, recently did an analysis which concluded that two thirds of Google searches ended without a click.
The response: Google responded to this saying:
We send billions of visits to websites every day, and the traffic we’ve sent to the open web has increased every year since Google Search was first created.
The response of the response: Rand published a Twitter thread saying that he confirmed this in his original article. Yes, Google is sending out more traffic to websites than ever before.
What this means for you: Search traffic is a lot more nuanced than you might think, as you can see from this debate. Still, it might be a good idea to diversify your approach if you're relying on a single acquisition channel - and especially if that channel is SEO.
In my Zero to Users research, I outline 34 channels that consistently work for founders such as X, Y, and Z. It might be a good starting point if you want to start diversifying.
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3. What Type of Posts Work Best on Instagram? A New Study Provides Some Answers
SocialInsider just published a study that analyzed 102,700,573 posts, trying to identify things like the current Instagram engagement rate, the type of posts that perform the best and so on.
The results: Here are the top 3 results:
- The Instagram engagement rate has been on a flat line in 2019, followed by a notable increase during the first half of 2020, only to go down to the initial rate of around 2.02% after that.
- Higher Instagram engagement is mainly brought by carousels, especially for small accounts (under 5K), but when it comes to medium ones, it’s better to choose video.
- Shorter captions, up to 10 words, combined with carousels form the posts to which users prefer to interact with. But worth mentioned, captions with more than 30 words are better paired with videos.
You can read the full study here, along with the additional conclusions from it.
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Amazon Ads are growing really fast. I had heard from many clients about great results.
Btw if any of you has firsthand experience running Amazon Ads, I'd love to pick your brain 😃: We just added support for them on Adflow.ai in beta with advice from Account Managers at Amazon. Like we did with our other tools, I'd love to make our AI better with insights from people who have "played" with them directly. DM me if you have an extra 15 min!
I wonder if carousel posts work so well because they're so easy to interact with. And if this can be translated to other social media as well (creating polls on FB to get higher engagement, etc.)
If you take a deeper look, it depends on the # of followers. For people with a smaller number, carousels worked better than video. For some bigger accounts, video worked better than carousels. Pretty interesting.
The increase in clicks year-over-year is prob. due to the increase of web traffic on the web. So it's a bad excuse on Google side.
Rand also wrote about this. Unfortunately Google went the route of FB/Twitter/other social media of trying to keep people within their ecosystem.
Pretty amazing that Amazon is making the same amount of money as YouTube with ads.
Someone also mentioned this on Hacker News. Basically, Amazon owns the second or the third largest PPC network in the world and not many people know about it.