Will Amazon’s Meta and Snap deals rewrite the future of social commerce?

The recent collaborations between Amazon, Meta (encompassing Facebook and Instagram), and Snapchat have altered the consumer landscape in the United States. This partnership enables users to complete Amazon transactions directly through Meta and Snap's platforms. While currently, this impact is limited to the USA, plans for a gradual global expansion are underway.

In the realm of digital marketing, this collaboration signifies a shift in strategies for brands to connect with potential consumers online. As the e-retail giant collaborates with social media platforms, the potential for transformative shifts in consumer behaviour and online engagement becomes evident.

The unfolding developments hold the potential to usher in a future where the boundaries between e-commerce and social media are blurred on a global scale.

"This groundbreaking collaboration among industry giants is a step towards revolutionising seamless shopping experiences, empowering billions to effortlessly make purchases within their favourite apps, with just a few taps."

"This association is set to catalyse and bring across significant changes in the marketing strategies of e-commerce brands. It will be exciting to see how it works for brands in the Indian regions," Aditya Varma, co-founder and head of digital and operations, What Are You Saying (W.A.Y.S.), notes.

It is interesting to observe that the advertising platforms that these tech giants offer are stark opposite to one another. Amazon's advertising model is rooted in customers actively searching for products ( 'pull'), contrasting with Meta's approach, where users receive targeted ads seamlessly within their feeds ('push').

Thus, these tech giants bring distinct strengths and advertising models to the table, creating an environment that could reshape how businesses connect with consumers online.

The pairing of these models presents a nuanced canvas for advertisers, capturing those with purchasing intent and enticing those not actively seeking a product.

Due to this, Shlok Hari, group head- media, Sociowash Media, anticipates a shift in the user interaction patterns for Amazon.

"Amazon operates similarly to Google; it is more of a pull marketing intent-based platform. Whereas Meta and Snap on the other hand are push marketing discovery platforms. The creative liberty available on these social platforms is multifold in comparison to Amazon; once products are displayed and consumed in a functional beautified manner the users are going to test more new products than they have before," he says.

He also feels that Meta and Snap as platforms are leading the way when it comes to product discovery; though a decent chunk of users are still not very comfortable with D2C purchases through new brands and websites that are not very commonly known.

"Shopping through these applications is going to see a direct increase due to the trust and credibility the consumers have in Amazon as a portal," he asserts. 

It is also important to note that Amazon does not have its own social media apps, limiting its reach in the discovery-based advertising space. On the other hand, Meta lacks a dedicated e-commerce platform, limiting its ability to tap into intent-based shopping behaviour directly.

Thus, the collaboration between Amazon and Meta can be deemed mutually beneficial. Amazon gains access to Meta's discovery-based advertising model, reaching users who might not be actively searching for products but could be interested.

Simultaneously, Meta can leverage Amazon's vast e-commerce platform, connecting with users who are ready to make purchase decisions. However, a question that arises for brand advertisers on these platforms is what part of the sales funnel is set to benefit from this integration. 

Even though the specific details are scant about the collaboration in the Indian context, Yash Chandiramani, founder and chief strategist, Admatazz, decodes the impact.

"Conversions will increase at the bottom of the funnel. And closing the loop on the same ecosystem is a welcome move. Years before, Meta started creating lead forms on their platforms. With this, they closed the loop of generating leads on Meta's ecosystem itself. This helped generate a lot of leads. But it has some challenges like the quality of leads going down. While this will definitely increase the conversions at the bottom of the funnel, there can be challenges that we will know only once we operate these ads."

"For example, will Amazon be able to upsell at this point of sale? Another place I surely see this as a boon is targeting. With tracking difficulty these days this kind of targeting will surely help. Advertisers (like Amazon) anyway spend on remarketing to people who come on the website. So it will just help complete the process here for the people who are already searching for products finally willing to purchase. That's what the greatest impact will be."

Hari observes that targeting on Meta has already gone through an evolution post the IOS implications that were delivered in 2021. By tying up with Amazon, both social platforms will gain key insight into the search patterns and product interaction patterns of a large user base. Thus, this move will help them optimise better for higher conversion rates through new layered targeting options.

But, what does Amazon gain from this? Ambika Sharma, founder and managing director, Pulp Strategy, takes note of Amazon's extensive affiliate program and influencer network contributing to its status as a leading product search engine.

As of now, small advertisers benefit from Amazon's marketing and advertising services tailored to their needs within the Amazon ecosystem. The collaboration aims to further enrich this ecosystem by integrating external platforms.

Amazon also has a data advantage over external agencies, particularly in understanding consumer behaviour and product success ratios. She sees the collaboration to diversify Amazon's business model, adding another layer to its existing revenue streams.

"Amazon's strategy involves offering a comprehensive 360-degree marketing plan to small advertisers. This includes product listing, marketing within Amazon, promotions, and now, advertising outside of Amazon through collaborations with platforms like Meta and Snap."

"The goal is to provide advertisers with an all-encompassing marketing solution. The collaboration potentially threatens traditional media agencies, as Amazon, armed with extensive data, takes over aspects of media planning. While this could impact agencies working with smaller advertisers, larger brands may continue to use their services."

There is also a global trend of moving away from third-party data, and Sharma sees Amazon and Meta leveraging their first-party data advantage. The collaboration aligns with this trend, providing advertisers with more efficient use of data.

"The collaboration enables Amazon and Meta to monetise their data more efficiently. By charging advertisers for access to this valuable information, both platforms stand to gain financially while providing advertisers with more targeted and effective advertising solutions."

Apart from advertisers, users who interact with content on social media platforms might also change their ways. Now, interacting with a piece of content on Instagram, for example, could lead to a purchase right there on Instagram itself.

While some users might appreciate this, others might exercise some caution in their interactions. Thus, in cognisance of this, will brand creatives floating on these platforms undergo a potential makeover?

Manesh Swamy, chief creative officer, LS Digital, ascertains that this could potentially drive a shift in creatives. Swamy noted that the ease of making purchases within the same platform where users engage with content could significantly impact consumer behaviour. He expressed optimism, suggesting that this collaboration might mark the beginning of what could be termed "social commerce."

Swamy mentions that personalised content and targeted advertising within social media platforms could lead to a higher conversion rate. In the scenario where the user journey is streamlined, reducing the need for users to switch between apps for discovery and purchase.

He also believes in the role of content creators and influencers, stating that this collaboration could provide a more direct route for converting content viewers into customers. He predicted that the ease of purchasing directly from the platform might lead to more impulse buying behaviour.

"The introduction of direct purchasing features on social media platforms not only streamlines the user journey but also challenges marketers to rethink their strategies. The potential impact on content optimisation and advertising strategies is immense. With the ability to seamlessly transition from content discovery to immediate purchase within the same platform, brands will need to adapt their creative approaches to align with this paradigm shift in consumer behaviour."

As a result, he also foresees the interest of brands in innovative digital marketing techniques like the use of a virtual try on by beauty brands to gain prominence.

"The integration of virtual try-ons and interactive filters in the beauty segment represents a significant leap in the creative landscape of digital advertising. This innovative feature not only enhances the user experience but also opens new avenues for personalised and immersive content, marking a noteworthy evolution in how consumers engage with products on social media platforms."