Amazon.com’s Integrated Marketing Communications 2018
In this class project, we chose to dive deep into the marketing communications of Amazon.com. We go over each piece of their promotional mix and analyze how effective it was.
Written by: Benjamin Manning, Michael Angelo Quiroz, Jordan Rizkallah, Brian Beasley
Introduction
We have been learning that having a solidified Integrated Marketing Communications with customers is king. This project is a combined effort to share what we’ve learned about the Integrated Marketing Communications and how Amazon has implemented it effectively.
History of Amazon
Amazon, headquartered in Seattle, Washington, was founded in 1994 as an online bookstore. “Jeff Bezos, CEO, knew from the beginning he wanted Amazon to be an everything store”(Hartman). Amazon was not the original name that Bezos had in mind for the online store either. He wanted to name it Cadabra or Relentless. After being advised not to he named it after the largest river, the Amazon.
Bezos identified Amazon.com as a technology company that simplified online transactions for consumers. Many people thought that Amazon.com would blow over and would be beat out by the well established book selling chains like Barnes and Noble and Borders. Many people were skeptical of Bezos’s plans with Amazon.com and said that it could not be done but, “in fact, Amazon.com did grow fast, reaching 180,000 customer accounts by December 1996, and in October 1997 it had 1,000,000 customer accounts. Its revenues jumped from $15.7 million in 1996 to $148 million in 1997”(Hall)[1], and just kept rising from there. In 1998 the online store started selling more than just books, they started to sell music and videos also. They also started international operations with the UK and Germany. “By 1999 the company was also selling consumer electronics, video games, software, home improvement items, toys and games and much more” (Hall). This is when Amazon started to really become the “everything store” Bezos wanted it to be.
Bezos originally did not want to hold any inventory in warehouses, but in order to obtain more control over deliveries the company did have to start holding inventory which began in 1997. In 2000 the company started letting people sell products they have through amazon to their consumers. “In 2002 the company launched Amazon Web Services, which initially offered data on internet traffic patterns, website popularity, and other statistics for developers and marketers”(Hall). They also offered something called the Elastic Compute Cloud, which rents out computer processing power in either small or large increments. Even though these other services were available the one that really stood out was in fact the online store which was selling everything and anything.
Throughout the years amazon has invested in many online retailers ranging from shoe sellers to book sellers and even electronic manufacturers. Amazon’s road to success definitely is not over yet. They have done exceptionally well within their early days of opening and expanding. Now Amazon has introduced something called Amazon Prime Air. Amazon Prime Air is “a delivery system from Amazon designed to safely get packages to customers in 30 minutes or less using unmanned aerial vehicles, also called drones”(Amazon.com). Implementing this system is going to help them enhance the great service they already provide their customers. Over time they have opened more distribution and fulfillment centers across the country and are continuing to open more as well. They are starting to have their own Amazon brand products that are available for sale. The first being the Kindle, Amazon Echo, and now Amazon Alexa.
Amazon has a significant volume of packages going in and out of their distribution centers, they needed a new way to package their item besides transferring everything into an Amazon labeled box. Amazon implemented the “frustration free packaging, which means that some items can be shipped in their original boxes”(Green).This eliminates cost, waste, and time. The company agreed that the packaging does not need to be eye-catching it just needs to be sustainable enough to get the product from point A to point B without harming the contents within the box.
Target Market
In the early days of Amazon I would say that the target market were people who needed and wanted books. This could range from the ages of 16 all the way to 70 or 80. Everyone reads books whether it is needed for classwork or for leisure there are people who need and want them everyday. Obviously it was a necessity to have access to the internet so another target market could be people who are internet savvy and use the internet frequently to either look around, scroll through websites, or buy items. Amazon targets their market by helping people buy what they need. This is not a website that is pushing products on people. In today’s day and age Amazon is a great way to find products you could get in store cheaper, but you would have to wait for shipping. People who do not mind the wait but want to buy things a little bit more cheaper than you would find in stores, would shop on amazon. For instance, I found a book in the CMU bookstore that had a price tag of $600 to purchase, since I needed it for my class it was disheartening that this book cost so much money. Once I started looking online to see if I could find it cheaper, I found it on Amazon book rentals for $89 dollars. That is about $500 cheaper than what I would have paid to have that book right then and there. Clearly I did not mind the wait especially for what a good price I was getting for the book itself. Overall the target market that amazon is going for are people who want to buy things online for cheap or for people who do not want to go to the store to shop. This website is very convenient for people who do not want to take the hour and a half out of their day to look around a store and find something they need when in reality, it is a click away on the computer. This company uses IMC to suggest other things to purchase online based on your previous purchases or what other people have purchased with the item you are currently purchasing at the moment. It is always relevant to you and what you need and it is never out there or some random product you would never need or want. It takes your previous search history and buying history to suggest other items or different designs of the items you have recently purchased. For example, when you buy a phone case off of amazon, it will show you other phone cases people have purchased and it will show you screen protectors that fit your phone that you could potentially purchase also. This helps people find and recommend what they want and it is taking away from pushing products onto people.
IMC Objectives
Technology companies such as Amazon are very strong on using integrated marketing communications. Amazon allows their users to have a personalized homepage with products relevant to their recent purchases, they send out emails to customers that include deals or new items that are similar to things you have previously bought or searched, and give bloggers opportunities to post their wish list or reviewed books on their blogs (Integrated Marketing, n.d.). Public relations are also a big aspect of Amazon’s overall objective.
Amazon allows you to post reviews on anything you have bought from their website which creates a database of reviews and adds credibility to their site. Bloggers are also a big source of publicity. For example, a blogger can write a review on a book and post it to their blog and post the link to the Amazon.com listing for that book. This gives not only a good review of the book, but also Amazon as a good place to purchase it (Integrated Marketing, n.d.).
Amazon uses media as their main form of marketing. They are focusing on online marketing channels. Amazon states “We direct out customers to our websites primarily through a number of targeted online marketing channels, such as our Associates program, sponsored search, portal advertising, email marketing campaigns, and other initiatives.” (Amazon Case Study, 2018). In their statement they refer to customer loyalty and that it is important. Amazon views their Amazon Prime and free two-day shipping as a big part of their marketing objective. Below is a general view of their marketing objectives and their way of communicating a consistent message of the company to their stakeholders.
Advertising Design and Strategies
Advertising designers use different kinds of techniques for persuasion, color psychology, and composition, copywriting and typography, and brand communication. Amazon uses millions of real customer experiences to inform their custom display advertising solutions (Amazon Display Advertising n.d.). Their results are:
· For customers, more precise and relevant ads, enhancing their experiences
· For advertisers, delivery of the right message to the right shopper at the right time
They have a philosophy that they follow at all times and it is “We insist on the highest standards and present Amazon customers with timely, relevant, and beautiful advertising that enhances their shopping experience.” (Ad Specs, n.d.). Amazon has different formats that they follow for their ads. They make sure the advertisements are visually distinct from page content by featuring a clearly visible border or a high contrast background color that clearly distinguishes the ad (Creative Acceptance, n.d.). Also, they create their ads so that they have the intention of engaging customers rather than being distracting.
With Amazon being such a big and profitable company, some people like to think that one reason for this is their message strategies they use to attract customers. Jeff Bezos’s stated that “The most important single thing is to focus obsessively on the customer. Our goal is to be earth’s most customer-centric company.” Amazon wanted to keep their message simple. They knew that they needed a simple message because it would be hard to be successful if customers could not understand it. For example, Amazon Prime became so successful because of its simplicity. It was easy for them to communicate what Prime had to offer: Customers receive unlimited two-day shipping (Siu, 2016). Easy to understand right? They also wanted to make sure that they had clear messages.
Amazon focuses on not only simple messages, but clear messages as well. Amazon gets all different kinds of people visiting their website, while also doing a really good job at getting their message across. They use strong and simple messaging to communicate what they have to offer, whether it is through giving you a quick reminder what you have in your cart or giving a brief description of recommended deals based on your recent search and purchase history (Marketing Strategy, 2017). They don’t want to overcomplicate their messages. Amazon also uses emotional advertising as a strategy.
There are a lot of different things to look at when visiting Amazon’s website. They have a lot of eye-catching images welcoming you upon arrival. These aren’t just random images. They use different emotion evoking images that have simple messages that they have purposely united with whatever product or service it is they are selling. For example, when advertising their Amazon Kindle, they place it on a beach towel on the beach. I would love to be relaxing on a beach playing a game or reading a new book on my Kindle. If you are looking to stand out you need to try and really connect with possible customers and Amazon does that by using emotional images to support their products and services in a unique way.
Type of Agency and Creative
According to Megan Graham from Adage.com on November 1st Amazon chose IPG — Interpublic Group of Cos. to “handle its $1 billion-plus global media buying and planning duties.” This is huge in the world of advertising because according to adage, IPG was laying people off before they landed this huge client. But the fact of the matter is that Amazon outsources their advertising to an external agency. That means the external agency in this case IPG, will buying and planning media display for Amazon. Media buying is the act of buying media in mediums and the planning would include looking the effectiveness of a certain medium with a certain advertisement.
Creatively speaking, Amazon’s creative ‘bent’ is seeming innovative, fresh, clean, and consistent. For example in their recent Super Bowl entitled “Alexa Loses Her Voice”[2]we can easily observe and even feel how Amazon is being innovative, fresh, clean, and consistent. An interesting piece that most people will not recognize is that they also appeal to our emotions by the use of humor. More specifically, the scene of “setting the mood” was cheeky and had everyone giggling inside. In those regards, Amazon is showing us that they can be fun and light hearted too.
Traditional & Non-Traditional Media
Amazon’s integrated marketing communications plan involves the uses of both traditional and non-traditional media. Each form of media used by Amazon has been selected for its unique advantages. Traditional forms of media utilized include newspapers, magazines, radio, and TV. Non-traditional media selections include display advertising, search marketing, social media, and email marketing. All of the media elements contribute to the omnipresence of the company.
Newspapers have been utilized by Amazon as part of their media mix. Among other things, newspapers have the advantage of being able to reach a large group of consumers. Amazon has used them to advertise high-profile sales promotions, such as Black Friday (Newsworks, 2018). The selection of this media form is based on its specific advantages. As mentioned before, newspapers have the ability to reach mass audiences that are ideal for promotions considering the large and diverse customer base of Amazon. The detailed copy and creative that newspapers afford was also capitalized on by featuring products from different categories to showcase the differentiated offering of the site (Newsworks, 2018). Amazon selected newspapers also because of the framing newspapers put consumer in when reading ads.
Magazines are also an essential part of the Amazon’s IMC plan. During the introduction of new Kindle products, Amazon has purchased many full-page ads aimed at gaining new customers (Chandler, 2018). Magazine’s unique ability to reach targeted groups with specific interests was a big factor in selection because it allows for specialized copy and strategic targeting. The ability to convey large amounts of information was also key to explaining the advantages and features of the new product. Long life also contributed to the decision as magazines are kept longer than other forms of media. This allows the advertisement to continue selling long after the initial run.
Radio has also been used by Amazon. Although radio may seem to be on the decline, it provides companies with specific advantages to capitalize on. The intimate nature of radio ads helped guide Amazon’s decision to utilize it as a media form to advertise Amazon Prime Day. During the week of the sale, Amazon reached #13 on the list of top spenders of radio ads (InsideRadio, 2018). Radio ads help to link other IMC elements and create a unifying presence across channels. Radio was key in helping inform consumers about their Prime Day sale.
Television (TV) is also an important element of the IMC plan for Amazon. During the Super Bowl, Amazon ran ads featuring their Alexa products (Heater, 2018). At $5 million per 30 seconds, the ad represents a major investment for Amazon (Heater, 2018). TV’s unique ability to incorporate humor was capitalized on, featuring celebrities standing in for Alexa in funny ways. The ability to generate excitement is also a reason Amazon uses TV as a media form. The company wants consumers to be excited about the offer and purchase the product bases off that emotion. The biggest reason Amazon selected TV was its ability to drive action and see a measurable difference.
Moving to non-traditional media, search marketing has proved to be a powerful tool for Amazon. Google’s Adwords has been a pivotal platform in search marketing efforts by the company (Sumo, 2017). By using dynamic text that matches keywords used in the search, Amazon is able to customize the ads copywriting to match the consumers, according to Sumo. The relatively low-cost of these ads makes them appealing to Amazon. Search marketing also allows Amazon to find customers that are looking for specific products and because of their established presence, are more likely to get customers than smaller sites.
Email marketing is a major part of Amazon’s IMC plan. Unlike most companies, Amazon takes a personal approach to email marketing. Customers experience a series of emails that helps guide them to the site, build rapport, and become repeat customers. New customers receive a welcome email, a receipt email after their first purchase, and a thank you email. Existing customers receive sales invites, product suggestions, upsells, and review requests (Daly, 2014). All of the emails are focused on keeping Amazon in the customers minds and driving new business. Technology allows for these emails to be specialized and add to the advantages of email marketing as a whole. Amazon uses email marketing to improve retention rates, promote sales, and drive engagement.
Display ads have been a driving force behind the success of Amazon’s IMC program. Display ads are shown on other websites that accept ads from 3rd parties and are typically in the form of banner ads near the top of the page. Amazon has used these ads to showcase products that the customer has search for or is likely to buy based on previous browsing activity. By using display ads, Amazon is able to redirect traffic from other sites back to theirs, capturing more revenue from people surfing the web.
Social media is one of the most important elements of Amazon’s IMC plan. Amazon’s Facebook page has nearly 27 millions followers and 2.7 million followers on Twitter (eTail, 2018). Facebook is their main platform to communicate with customers. Their social media team is responsible for replying to customer comments, offering suggests, and if it is a right fit, be humorous (eTail, 2018). This helps give Amazon a more intimate, human element and shows customer they listen to their issues and questions. Promotions and other events are also announced on the platform as a form of free advertising. Pinterest is also used in their social media strategies with posts that directly link the content to the product’s page on Amazon. Overall, Amazon uses social media to connect with buyers and offer a convenient way to shop their site.
Sales Promotions
Advertising is the primary means for Amazon to communicate with its target market. Also, they apply sales promotions as a secondary strategy to attract customers and persuade them to purchase their goods or services they offer on their website (Ferguson, 2017). Generally, Amazon frequently uses discounts and special offers to try and create more sales. Their main sales promotions are Cyber Monday, Prime Day, and their Deals of the Day.
Cyber Monday is a full day following Thanksgiving promoted by online retailers as a day where you can get excellent deals. For Amazon this is one of the biggest days of the year and generates a lot of profit for them. Amazon officially announced that “Cyber Monday 2017 was the single biggest shopping day worldwide for the company. Sales beat out not only Black Friday, but also Amazon’s own Prime Day record set in July 2017.” (Popomaronis, 2017). The best-selling product on Amazon on Cyber Monday was their Echo Dot, which sold for $29.99 (save $20) (Kelly, 2017). Amazon participates in Cyber Monday as a short-term tactic to increase sales. Prime Day has a big impact on Amazon as well.
Every year Amazon has something called Prime Day. It is a yearly promotion when Amazon cuts their prices on a wide variety of items for their Prime members. Throughout Prime day, new deals will be offered every five minutes. You can track the deals ahead of time and even set an alert for when a specific deal starts (Amazon Prime Day, 2017). Amazon uses Prime Day to try and persuade people with discounts to spend money that they otherwise wouldn’t spend.
When going to Amazon’s website right on the front page they have a tab you can click on called “Today’s Deals” otherwise known as their Deals of the Day. They have this to promote different products that they put on sale throughout the year. The Deals of the Day can consist of a single item or a set of items that are closely related that are discounted for only one day. Amazon uses Deals of the Day to try and increase sales and quickly sell extra items (Kruzman, 2017).
Direct Marketing
Although Amazon is an online company that prides itself on its technological innovations, traditional communication still provides the company opportunities to bring in new business. Amazon has selected direct mail marketing as tool to reach existing customers. (Bobnak, 2016) Direct mail marketing offers high targetability because of Amazon’s large database of customer addresses. The efficiency associated with direct mail also contributed the decision by Amazon. By utilizing a pre-existing list of customers, opposed to a mass mailing list, costs of the campaign are much lowers, as well as more effective. Direct mail also offers measurability so the campaign’s effectiveness can be determined and pivots can be made if necessary.
In 2015, Amazon launched a new direct mail campaign with the aims of getting Kindle customers to upgrade to their latest Kindle. (Bobnak, 2016) According to Target Marketing Magazine, the campaign featured a brochure that highlights the major upgrades and selling points of the new Kindle. Also attached was a coupon code for $30 off and a 30-day money back guarantee. (Bobnak, 2016) Amazon can use the coupon code to track the effectiveness of the campaign. Another direct mail campaign targeted Amazon Prime users who had not used Prime Instant Video. (Puma, 2015) Puma shows the long-form letter that was used by Amazon. The letter outlines the basic features of the Prime Video and bolds the call-to-action, that gives customers a clear next step. (Puma, 2015) This campaign aims to build awareness of a product already owned, that is under underutilized. Amazon could determine the effectiveness of this campaign by seeing how many in the target group watched video on Prime Instant Video.
Public Relations
Amazon is a company that is focus on innovation. This focus is reflect both in business operations, as well as in their public relations efforts. Much of the brands success in inticiting investments lies on their ability to tell captivating stories regarding their brand. (Rubec) Amazon also takes an active role in announcing programs that show Amazon in a positive light, that promotes their dedication to social responsibility. (Jones) Overall, the company takes a proactive approach to their public relations (PR) efforts.
Taking a proactive approach to PR has provided Amazon with many benefits. The company is has a long-term approach to PR, taking on programs that traditional companies wouldn’t because of the negative effects on the bottom line. These programs include veteran job placement preference and paid training for workers looking for a career change. (Jones) According to Rubec, these programs reflect the company’s effort to appear socially responsible opposed the traditional corporate shareholder model only concern with the bottomline. By taking this approach, Amazon is positioning itself as a responsible company that gives back to its employees and country. Although the immediate bottom line is lower because of these programs, the company hopes that is will encourage customers to continue using the site because of their positive PR.
Another angle of Amazon’s PR strategy is brand storytelling. The innovation within the company is a key component of that story-telling. (Rubec) Rubec’s post in the PRNewswire explains how new press releases incorporates early press releases to demonstrate Amazon’s follow through on its promises to investors. For example, in 2008, Amazon announced the Kindle telling investors about the future of how customers will buy books. (Rubec) By incorporating these older press releases, Amazon reminds investors why the bought into Amazon originally and helped paint a picture of the companies progress according to Rubec. Storytelling represents a major component of Amazon’s PR strategy for both investors and customers.
Overall Assessment
We score Amazon’s Integrated Marketing Communications ten out of ten based on our textbook’s definition of IMC. According to our textbook J. Craig Andrews and Terence A. Shrimp, IMC is the coordination of the promotional mix elements with each other and with the other elements of the brands; marketing mix such that all elements speak with one voice. All of Amazon’s promotional mix elements,as described above, are consistent and congruent all across its communications to their customers, therefore Amazon is recognized by us as having a “superior” IMC.
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