As Amazon Preps Attribution Tool, Media Buyers Demand Greater ROI

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Amazon’s rumored decision to move forward with the launch of a new attribution tool is a move designed to demonstrate the value in its advertising platform to skeptical media buyers and show how its advertising stacks up against competitors like Facebook and Google. But not all industry insiders are convinced that Amazon’s new tool will provide the level of value that advertisers are expecting, at least not right off the bat.

“In order for Amazon’s new attribution tool to provide real value for advertisers, the platform will have to lay out its data in a way that’s digestible and actually caters to media buyers’ needs,” says Nancy Lim Rothman, director of marketing at CallRail, a call tracking and analytics startup that raised a $75 million growth capital round in fall of 2017.

Having insights into where leads are coming from and which ad campaigns are resonating with buyers is half the battle, but Rothman says that if Amazon doesn’t find a way to relay that information in a clear, actionable way, users won’t know how to make use of the raw data.

With an ad business worth $2.8 billion, according to estimates by J.P. Morgan, Amazon is hardly a small player in the game. Analysts are projecting that the company’s ad revenue could grow 43% annually over the next five years. The company is also rumored to be testing an application programming interface to let marketers manage programmatic campaigns on their own, a move that could help Amazon scale its advertising program.

Amazon’s emerging focus on building a more robust attribution tool makes perfect sense to Sam Mylrea, CEO of PureCars, a digital marketing agency that works with automotive dealers across the country. As Mylrea explains it, Amazon’s massive consumer audience and billions of touch points, coupled with its newly acquired brick-and-mortar presence, means the company’s ad services could be in a position to explode if it does a good enough job illustrating the influence its ad services have on driving online-to-offline or strictly online sales.

“It’s been quoted that they are doing this to get a sense of how their ad influence stacks up against Facebook and Google, but ultimately it could be the validation that advertisers need to either add more money to their overall ad spend or divert from the duopoly of Facebook and Google,” Mylrea says. “It will be interesting to see how far they develop their attribution tool beyond just providing additional data to their advertisers.”

But Amazon is hardly the only company making attribution a priority right now. According to Rothman, a number of hyperlocal vendors are investing in attribution because of the growing need to prove the value of their clients’ advertising spend.

“Budgets are getting tighter, and in some cases, teams are getting smaller, but the stress on those teams to produce top results and to prove where incoming leads are coming from is only increasing,” she says. “Companies now want to be able to understand not only which advertising methods and platforms are gaining results, but how to use that attribution to shift and improve their strategies moving forward.”

Rothman believes the launch of Amazon’s new attribution tool could ultimately mean more immediate pressure on all digital companies to prove the return-on-investment of their ad campaigns. For smaller players, that might mean more opportunity to engage on a platform like Amazon, similar to the way Facebook’s business manager is tailored to and easy for businesses of all sizes to operate in a self-service format.

“In the long run, this will lead to more targeted, relevant marketing,” she says. “Attribution will allow marketers to execute stronger, more engaging campaigns and ultimately increase sales as a result.”

Stephanie Miles is a senior editor at Street Fight.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.