Amazon’s Kari Callahan on growing its advertising business and the future of e-commerce

Kari Callahan, Amazon’s Director of Global Media, Portfolio and Insights, discusses pandemic shopping and the blending of branding and e-commerce in this interview for WARC’s Marketers Toolkit 2022 with US Commissioning Editor Cathy Taylor.

What changes in consumer e-commerce behavior have you seen during the pandemic?

First, people [were] really turning to us when a lot of retail was either closed down, or maybe out of stock of a lot of basics, and so we saw a big increase in activity around groceries and consumables and the basics people needed, and one of the big priorities we had in the first few months – and even still a bit today – is prioritizing those essentials, to get out to our customers.

We were in a situation where demand was actually more than we could handle with everything going on, and first and foremost was keeping our employees safe, and making sure we try to keep the customer experience as strong as possible. We found ourselves having to pull back and reprioritize a lot of the campaigns that we would have had scheduled during that time period, to make sure that we were really focusing on the basics and getting that right, and getting those essentials out to our customers. What we're seeing is, actually, a lot of that continuing.

What are you hearing from brands concerning the collision of branding and e-commerce? How did their needs change during this time?

Demand on our ad business has been strong. I think [marketers] have been looking at our site traffic numbers and the amount of activity that has been going on. At the same time, there's been a transition that probably just got accelerated more than anything through COVID of utilizing Amazon also as a brand channel. We're seeing huge growth in regards to video placements and some of our placements on streaming TV, Fire TV,  IMDB and all the various pieces. Where the early advertising on Amazon was very direct-response oriented – and that's still a big portion of our business – more and more advertisers are looking at how to utilize Amazon as you move up that purchase funnel.

Directionally, do you think the branding is just going to continue to gain some share, in terms of how advertisers are using Amazon?

I think so. It's definitely an area that is growing rapidly, so I think it's just going to continue to grow.

Do you find that brands are more likely now to combine branding and performance together, even in the same units? Or is it still mostly siloed?

It really varies by advertiser, so what we've been trying to do is also offer flexible toolkits for our customers around being able to look at some of the brand studies and brand impacts as well as some of the demand-driving, and offering that more uniformly across the groups. But right now, it tends to follow more the company, their organization and how they're set up, structured and organized than anything.

When I first joined Amazon 11 years ago, it was very, very siloed [within the company]. What we're seeing is those lines blurring more and more. We need to be more coordinated, we need to be more integrated, we need to put the customer first, and make sure we're thinking about all of the touch points across Amazon, because a customer doesn't necessarily know how you're organized or that we – as a marketer – defined this as a brand unit, and that one as a demand-driver.

Have you felt the need to amplify some of the ability to brand, because ads on Amazon are often thought of as utilitarian performance units?

That's definitely a huge, huge area of focus for us and there's still room for us to grow on that. But as we look at how we drive some continuity in regards to our brand, that could be everything from just how it shows up in regards to fonts, colors and usual brand mechanics, all the way to some of the tonality, and then the type of humor and personality within. There's sometimes this belief that some of the more demand-driven, automatic static types of placements don't show a personality.

But they do, and so how do we help build some of those toolkits and some of those frameworks for marketers across Amazon that they can tap into, so that there's more of a common brand theme and tone across everything that we're doing, no matter who the marketer is that's picking it up? Or whether they're utilizing it for brand or demand-driven assets?

On Amazon.com, it’s interesting to see how branding is being carried out in some of the stores, in addition to the site still being quick and transactional.

A big area we talk about a lot is how we think about the reality that one of the best things about Amazon is that you can jump in and jump out very quickly. A lot of people come to our site and know exactly what they're looking for, and time spent is fairly short. That's actually a good thing in many ways. At the same time, there are those instances where people want to engage more, spend more time, so there are categories, whether it's things like clothing and fashion, where we do need to think about our brand, and how do we tie what is common for the category with what our brand stands for, and to reach that happy medium between those?

In terms of sustainability, you talked about how Amazon activated The Climate Pledge. How did you do that and how are you measuring performance?

Sustainability has been a huge effort for Amazon for a while. We've been investing in everything from electric vans, to new packaging solutions, to how we think about our headquarters and office space and make them more sustainable in nature.

What we quickly realized is that we can't do it alone, and it is going to require more businesses coming on board and taking that challenge. That's really what The Climate Pledge is about. Now, over 100-plus companies have signed on to [become] ‘carbon neutral’ in advance of the Paris Climate Agreement. What we wanted to do was really figure out how we can utilize marketing to further accelerate the momentum around The Climate Pledge [and] drive awareness of it with consumers, but then also utilize it as a way to get more companies to sign on as signatories. We launched a campaign that started in in Q3 that was mass advertising multi-channel across the US and multiple EU countries. We also tried to make it as sustainable from a media planning standpoint and a production standpoint as possible.

Consumer sentiment around it has been great. We've been seeing some great momentum in regards to new companies signing on as signatories. We're looking at this more around how do we drive the Climate Pledge, versus how do we drive Amazon itself.

What do you hear from consumers about what they expect from Amazon in terms of sustainability?

What we often hear from customers is [that they want] different packaging solutions or things that we've started such as having a day that you pick [each] week, and we’ll consolidate all of your orders to have it shipped out once a week. Or being able to find more sustainable products on Amazon. Making it easier for customers to do those little everyday things that are going to make a difference is what's super top of mind for us.

How do you work with the creator economy and influencers?

A lot of it is working with them as a partner and finding that right balance… making sure that is still true to their brand. That's key in some of these spaces, because if you're not true to the influencer and what they stand for, viewers are going to know it.

We've really been finding some interesting models of working with creators where they're creating and producing and building and our creative teams are stepping away. Really, making sure that there isn't anything that is non-compliant from a brand standpoint, or that our products and services are being represented correctly, but being able to have fun with it, being able to sometimes make fun of ourselves a little bit, and letting the stories go where they will naturally go. We've seen some great success, the more we put it in the hands of the creator versus trying to take ownership or control some of the pieces.

Is building stores on Amazon the primary way they express themselves on the platform?

There are a lot of creators that are building stores on Amazon, and, at the same time, we also have affiliate and associate programs with a lot of influencers as well, so within just their feeds as they mention or link to any sort of Amazon products and services – the opportunity for them to have a revenue stream from that as well.

What is top of mind for media executives going into 2022?

There are probably two things that are top of mind for us. One is the video landscape in totality, so kind of moving from “Here's our online video plan, and our linear TV plan,” but how do we look at video holistically, no matter what the screen is? How are we making sure we are creating ads that make sense in the content and the context?

I think the other big area is flexibility. The need to be nimble continues to be a huge theme. The last year and a half has changed how we work and operate – and just some of the timelines and the pace of what we're doing – and it has changed how we commit to media and placements moving forward.

As this applies to TV, it still works. It's not going away. But I think the challenge is thinking about it a little bit differently: what does TV truly mean? Because if you ask the consumer ‘what did you watch on TV last night?’ they'll often name a show that's on Hulu or Netflix. So, being able to be nimble in regards to what we're doing and how we're buying it and making sure that we've got the right balance across all of those platforms is key.