Small brands lose share to big brands on Amazon: Profitero talks “David vs. Goliath” eCommerce trends with AdAge

It wasn’t too long ago when small challenger brands had the natural upper hand over big brands on eCommerce. The endless aisles eliminated barriers to entry, making it easy for small brands to launch online. Add to this the nimble and agile nature of smaller brands, which gave them an early jump on many of the self-service marketing features offered by Amazon that more prominent brands were slower to capitalize on.

Now, according to this [gated] article by AdAge, a reversal of fortune is setting in. Big CPG brands are starting to win back share online, mainly by outspending small competitors on retail media. Sarah Hofstetter, president of Profitero, recently shared her perspectives with AdAge’s Jack Neff.

Past as prologue: Facebook then, Amazon now

An ad veteran herself, Hofstetter was quoted in the AdAge article as saying: “Ten years ago, organic social media helped upstart brands thrive, but then more prominent brands began outspending them on Facebook, bidding up ad costs and making it harder for new brands to break through.

“Focus has shifted in recent years to a growing number of new products invented largely to be sold on Amazon. But the surge of eCommerce caused by the pandemic led big companies to shift huge amounts of media dollars to Amazon. The result has been to hike costs that smaller players have trouble paying and pushing smaller brands down search result rankings in many categories… [Smaller brands] are starting to get nudged out because of the money.”

Affordable analytics give smaller brands more fighting power

Smaller brands are not about to lay down their gloves just yet. Instead, we’re seeing challenger brands turn to analytics technologies, like Profitero Pro, to even the score by managing their eCommerce distribution and marketing efforts more efficiently.

AdAge shared a couple of experiences smaller brands have had working with analytics tools, and specifically Profitero Pro.

• Per Halee Patel Newton, VP of e-commerce for Califia Farms (a marketer of oat milk, almond milk, cold brew coffees, and juices): “The tool is helping Califia identify and eliminate out-of-stocks, which, besides hurting sales, can also hurt brands’ search rankings, as well as identifying keywords it should be buying ads against and tracking how its products are faring against those keywords in searches. Profitero Pro also helps Califia track its sales and competitive share across e-commerce retailers and spot where it needs to direct spending.”
• Per Nancy McLaughlin, senior director-search and enterprise services for Amazon and marketplace channels at digital agency Tinuiti, which works with challenger and bigger brands alike on Amazon: “Profitero Pro helps by matching inventory and supply chain capabilities with ad spending. We want to ensure what we’re putting spend behind not only has enough product to support the demand, but it’s something that Amazon is actively forecasting against, so we’re putting advertising to the right products.”

To access the full AdAge article (behind a paywall), click here.

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