Amazon Brand Referral Program – How It Works

Brands looking for success and longevity on the Amazon marketplace need to get serious about obtaining qualified external shoppers. And with the new Brand Referral Program, Amazon is making this type of traffic acquisition method more cost-effective.

Bobsled’s Ross Walker has answered some FAQs about the new program and explained how brands should be utilizing this feature in the context of broader Amazon marketplace trends.

What is the rationale behind the Brand Referral Program?

Amazon wants as much traffic on their marketplace as possible. With the Brand Referral Program, Amazon is attempting to encourage brands to send external traffic towards their Amazon listings with the offer of a bonus and other incentives.

Why should you join the Brand Referral Program?

Here are the details of the program’s benefits according to Amazon:

• Accelerate your growth and improve the efficiency of your non-Amazon marketing and advertising campaigns that drive your referral traffic to Amazon.
• Save money by receiving bonuses that average 10% of sales from the traffic you've driven to Amazon.
• Improve advertising efficiency by receiving the same bonus for customer purchases of additional products from your brand up to 14-days after clicking on the ad.

How does the Brand Referral Program work?

The steps to sign up are straightforward:

• Register for the Brand Referral Bonus program
• Access Amazon Attribution, if you haven't enrolled yet click here
• Create tags for your promoted products using Amazon Attribution. All traffic must have an Amazon Attribution tag in order to qualify for the bonus.
• Launch your advertising efforts.

💡 Check out Episode 107 of the Ecommerce Braintrust – All
About Amazon Attribution 

How do advertisers earn bonuses through the program?

Here’s the workflow:

• A customer clicks on one of your ads outside of the Amazon marketplace and makes a purchase within 14 days of clicking the ad
• Eligible brands will receive their ~10% bonus for this qualified sale beginning in September 2021, and then on a monthly basis moving forward. 
• There is a 2-month wait time before the bonus is credited to your account to accommodate order cancellations and customer returns. For example, if a qualified sale occurs in July, the bonus will be credited to your account in September.

Important: The bonus will be used to cover future referral fees – think of it as a credit. The more bonuses you generate, the more cost-effective your referral fees will become.

How does this program change things for brands selling on Amazon?

Broadly speaking, brands selling on Amazon have two options in terms of the type of traffic they can target with advertising:

1. Internal. Users already within the Amazon marketplace.
2. External. Users outside the Amazon marketplace.

There are numerous segments of potential external customers. For certain products, it may make sense to encourage an external shopper to check out through Amazon. In other instances, an advertiser may prefer to send external ad campaign traffic to their DTC website. In this omnichannel world there are pros and cons with every platform, and just because Amazon has rolled out this new incentive doesn’t mean you should neglect other aspects of your external strategy.

💡 Learn more – Bobsled's Omnichannel Playbook – Amazon, Walmart, Instacart, and DTC

Put simply, the Amazon Brand Referral Program may make it more cost-effective for advertisers to target external traffic and encourage them to purchase products on Amazon. How this changes your external ad strategy will depend on the specifics of each brand. After the first bonuses get rolled out in September Bobsled will have more data and insights to share regarding the effectiveness of the program and we will publish a follow-up blog post.

Does this new program tie into a broader trend?

Yes. The brands that develop an effective Amazon DSP strategy now are poised to reap the rewards over the long term!

💡 Learn more – What Is Amazon DSP and How Can It Boost Sales?

Due to the rapidly rising number of brands selling their products on Amazon, competition for internal traffic has become fierce, and it’s only going to become fiercer. This has driven up Amazon Advertising CPCs, making it more difficult for brands to maintain acceptable profit margins across many SKUs on Amazon.

Therefore, savvy brands are finding cost-effective ways to achieve Amazon sales via external traffic. Due to the unparalleled amount of audience data with the DSP dashboard, advertisers can personalize their display ad campaigns to effectively target the right type of shopper.

So don’t get left behind! With Amazon subsidizing your campaigns through this new program, it’s the perfect time to start.