ANALYSIS: BRAND SPEND ANALYSIS - Amazon enjoys high levels of awareness but may find it hard to see off its rivals

Amazon.co.uk is a subsidiary of the US-based online retailer Amazon.com. It began life as an independent online store called Bookpages, established in 1996 and acquired by Amazon.com in 1998. It began trading in the last quarter of 1998 and its sales for October to December 1999 were up 400 per cent at pounds 26 million.

Amazon.co.uk is a subsidiary of the US-based online retailer

Amazon.com. It began life as an independent online store called

Bookpages, established in 1996 and acquired by Amazon.com in 1998. It

began trading in the last quarter of 1998 and its sales for October to

December 1999 were up 400 per cent at pounds 26 million.



Amazon enjoys a high awareness among consumers and it is the UK’s most

visited site for purchases of books and music. The company has recently

introduced a new corporate identity to mark its move from simply selling

books to offering a range of consumer products. In addition to its

catalogue of 1.5 million titles, Amazon’s UK website offers music, DVD,

video, an auction site and a number of net boutiques called Zshops.



On the face of it, high brand awareness and rocketing sales should

result in a rosy future for Amazon. However, the company is accused of

being driven by a US-based strategy that is not suitable for the UK

market.



Its previous marketing director Chris Ketley quit after just four

months, complaining that the company was concentrating on short-term

returns instead of building its brand. Amazon’s advertising has also

been criticised as lacking innovation, being too cryptic and unable to

make the brand stand out in the crowded dotcom market.



Media spend/mix Much of Amazon’s advertising is online, and it does not

yet feature in the list of the UK’s top 200 advertisers. It has been

particularly adept at forging partnerships with portals such as Yahoo!,

which displays a context-relevant Amazon banner every time a user

searches the net.



Amazon spent pounds 3.28 million on traditional advertising in the year

to February 2000. The budget was split fairly evenly between press and

TV but with an appreciable use of radio. Television spend (pounds 1.23

million) was concentrated in November and December 1999, while press

spend (pounds 1.35 million) was spread fairly evenly over the year,

apart from a sharp drop in January and February 2000. Most press spend

was placed in mid-market and quality national newspapers and magazines

such as PC Direct, Computer Active and The Economist. Television

advertising was almost exclusively on terrestrial channels - LWT and

Central accounted for more than half of all TV spend.



Agencies HHCL & Partners holds the creative account, while media is

planned and bought by Total Media. Tom Allchurch is Amazon’s marketing

director.



Predictions Amazon has a difficult task ahead as it seeks to bolster its

current popularity while expanding into new product areas. Although last

year it beat Virgin.net in terms of total visits, it has not adopted the

leadership stance one would have expected.



The coming year will reveal whether Amazon’s surreal creative executions

can successfully fight off competition from rivals such as BOL.com.





Research by AC Nielsen MMS tel: 01344-627553 www.mediamonitoring.com.



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