This week on The Big Story, James Hercher provides some color into what’s going on with Amazon’s affiliate program. Earlier this week, he reported how Amazon had removed third-party vendors from the program.
We’ll explore what’s going on and why Amazon came to this decision. In short, removing these vendors boosts Amazon’s margins. Affiliate networks used to take a cut from the entire shopping cart purchase, not just the product they linked to. Amazon’s decision to cut affiliate networks and create a direct line to publishers is also a form of supply-path optimization.
Publishers who work directly with Amazon are fine, of course – or they would be if it wasn’t for COVID-19. As The Information points out, Amazon has moved to suspend those publisher direct affiliate deals, but only temporarily. Amazon is having to rethink its supply chain as it prioritizes only essential items. To assist with the backlog, it’s hitting the pause button on commerce marketing deals with online pubs.
Also in this episode, we look at the disruption the pandemic has caused for sports marketing. With March Madness, the NBA and the NHL all canceled and the 2020 Olympics becoming the 2021 Olympics – not to mention the upcoming MLB and NFL seasons in doubt – what happens to all those ad dollars and upfront commitments?
Alison Weissbrot takes a look.
The sponsors of events that have yet to be definitively canceled are taking a wait-and-see approach. On the broadcast side, NBCU is essentially letting sponsors move their commits to 2021, while Turner, which co-produced the now-canceled NCAA March Madness tournament, is letting sponsors roll their spend to other parts of Turner’s portfolio – and giving refunds to distressed brands.
But are these consolation prizes enough? If your brand planned a big product launch in line with the 2020 Summer Olympics, is that inventory still worth the same one year later? Also, advertisers must account for – and in most cases rethink and reshoot – creative that is probably going to be dated by 2021.