Day 1 for Social Commerce: First thoughts on Amazon – Meta/Snap Partnership, and what it means for Brands

Himanshu Jain General Manager / VP of Product

November 14, 2023

Amazon and Meta recently announced a partnership to test a seamless Amazon shopping experience within Meta properties (update: Amazon confirmed a similar deal with Snap on November 13, showing that Amazon is doubling down on their social commerce strategy, with ads as the entry point). This collaboration has been described as “the most significant ad product of the year” and is aimed at streamlining the conversion process for brands and Amazon sellers, making it easier for them to reach customers on Meta’s platforms. The partnership enables a new in-app shopping feature that allows users to buy Amazon products directly from ads on Instagram and Facebook. This feature is intended for select products advertised on these platforms, whether sold by Amazon itself or by independent sellers on Amazon’s marketplace.

While details are still emerging, I think this will accelerate retail media’s growth, and force brands to think

1. The age of social commerce – The lines between brand, performance and social media marketing will blur

Is a video ad on Facebook, which allows a user to one-click purchase, a brand-building ad or a conversion-focussed ad? Does it matter if the user has interacted with your brand before or not? Is that funded from trade dollars, brand dollars, or social media dollars? Amazon Advertising just got more powerful, but also significantly more complex to budget for.

Crafting narratives that resonate with audiences and convert sales must now be more intertwined. The result? A more holistic approach to marketing where the lines are not just blurred, but perhaps, increasingly irrelevant. Brands that can navigate this integrated marketing arena, prioritizing user experience and leveraging data to inform their strategies, will gain a substantial edge.

This evolution positions social platforms not just as a channel for awareness, but as a potent, full-funnel e-commerce environment. Brands that have integrated ecommerce teams are best positioned to adapt to this world.

2. The most interesting part? Data, and how that unlocks new opportunities for brand engagement.

There’s a lot to unpack here. Apple’s App Tracking Transparency policy kneecapped Meta in 2021, making it more difficult for them to target users and thereby show strong ROI to advertisers. The underlying theme was, and continues to be the death of cookies. While Meta has invested in AI for better targeting, partnering with Amazon opens up significant first party data and sidesteps the cookie apocalypse.

This likely helps both Amazon and Meta. Meta gets richer data on user shopping patterns and can use that for better ad targeting, and Amazon can broaden both its inventory as well as targeting options for advertisers through its DSP offering. Don’t be surprised if you see Lifestyle – Interested in Fashion Pages as a targeting option in Amazon DSP next year! It also makes Amazon’s DSP more powerful as a a platform, by expanding its prospecting reach as well as driving retargeting on social platforms, where users spend a bulk of their time.

The elephant in the room, however, is TikTok. TikTok has been investing aggressively in building out social commerce and onboarding new advertisers. Amazon’s social commerce play, Inspire, has been relatively muted, especially compared to TikTok. As more GenZ shoppers use TikTok as their product discovery platform, Amazon’s foray into social commerce with Meta brings together the best of both worlds – Meta for social media, and Amazon for commerce together to combat TikTok.

Ultimately, the real winner of this arrangement are brands themselves. It allows them to engage (and re-engage) with their audience across multiple channels. Several tactics just got more effective –

There’s a huge pool of new shoppers (GenZ) who can learn about your brand on Instagram, Facebook or Snap
This is also a huge boost to Retargeting efforts: with more shoppers spending time on social media, well placed ads with a seamless checkout experience will boost conversion rates for brands

All this will help brands become more effective with their marketing dollars and help measure impact more – ultimately helping them appropriately deploy capital into growth. As we move into a more challenging growth environment, brands who crack this paradigm are the ones who will succeed.

3. The growth landscape for DTC just got more challenging.

Social platforms, once the go-to for affordable customer acquisition, are likely to see costs climb as brands and Amazon sellers amp up their ad spend on Meta properties. p. With this offering a seamless social commerce experience (which TikTok has proved is a viable growth channel), this can prove to be an area for ecommerce teams to drive both growth and brand awareness. Net net, it just got that much more difficult for another Harry’s to emerge from paid social media growth. DTC brands will have to get creative, finding new ways to stand out in a space where the rules of the game are changing fast.

It’s been an exciting few years in retail media, and it feels like we’re only at the beginning of a huge shift in the broader advertising industry. With every single retailer investing in retail media, and Amazon continuing to push the boundaries – it’s the best time for brands to learn what works and double down for sustained growth.