The D2Z Podcast

The Evolution of Amazon Advertising with AI - 132

• Brandon Amoroso • Episode 132

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What inspires a PhD graduate from Cambridge with a passion for autonomous vehicles and Formula 1 to revolutionize Amazon advertising? Sit down with Julian Timings, the ingenious mind behind Altron AI, as he shares his journey from racing circuits to crafting cutting-edge SaaS solutions for Amazon sellers. Julian's unique blend of technical prowess and entrepreneurial spirit led him to tackle the very pain points he faced in his eco-friendly homeware business. Discover how his firsthand experiences with the complexities of Amazon advertising propelled him to develop a tool that not only automates ad solutions but also transforms the game for solopreneurs and small businesses.

As we navigate this insightful conversation, Julian sheds light on the dynamic landscape of Amazon advertising in Europe, revealing strategies to leverage Amazon’s ecosystem for higher conversion rates while addressing regional challenges like the GPSR regulations. Hear his thoughts on channeling Shopify traffic to Amazon, a tactic that promises improved conversions yet demands careful consideration. With eyes set on the future, Julian is thrilled about the potential of AI-driven account management systems to maximize ad spend. This episode is a treasure trove of strategies and insights for Amazon sellers eager to stay ahead in a rapidly changing marketplace.

Here's what you'll learn:
🤖 Automation and AI are transforming the advertising landscape on Amazon.
💼 Successful brands on Amazon must have competitive products and manage cash flow effectively.
❗ There are still opportunities in less saturated product categories.
💰 Return on ad spend is generally stronger on Amazon compared to other platforms.
📈 AI can enhance the efficiency of ad management and customer interaction.
📦 Diversification of sales channels is crucial for long-term success.
🚀 Balancing software and service offerings is key to meeting customer needs.

Timestamps:
00:00 Introduction to E-commerce and AI
06:12 The Evolution of Amazon Advertising
17:00 Future Trends and Challenges in E-commerce

Julian Timings
LinkedIn - https://www.linkedin.com/in/juliantimings/
Autron AI - https://autron.ai/

Brandon Amoroso:
LinkedIn - https://www.linkedin.com/in/brandonamoroso/
Web - https://brandonamoroso.com/
Instagram - https://www.instagram.com/bamoroso11/
X - https://twitter.com/AmorosoBrandon
Scalis.ai - https://scalis.ai/

Speaker 1:

Hey everyone, thanks for tuning in to D2Z, a podcast about using the Gen Z mindset to grow your business. I'm Gen Z entrepreneur Brandon Amoroso, the former founder of Electric and now the co-founder of Scaless, and today I'm talking with Julian Timings, who's the co-founder and CEO at Altron AI e-commerce ad automation made easy with AI. Thanks for coming on the show. Thanks, brandon, excited to be here. Before we dive into all things advertising, can you give everybody a quick background on yourself and how you came to founding this business?

Speaker 2:

Sure. So yeah, I'm originally from the UK. I have a fairly technical background. I did a PhD at Cambridge University in autonomous vehicles a slightly different area than what we're discussing today, but I think that kind of like is a bit of the fundamental grounding, I guess, around some of the approaches that we take.

Speaker 2:

After that I went in, actually worked in F1 for a couple of years, a big motorsport fan, and then then I realized that, uh, you know, entrepreneurship, I think, was for me. So that was when I kind of founded my first business, and again in a bit of a different space, it was in the kind of cloud kitchen space and then after couple of years that business got acquired and then I went on to start actually an Amazon business and I guess this was the first time that I touched the world of Amazon and I was selling products myself on Amazon and feeling the pain, I guess, around advertising and also realizing the significance of how important it is to run ads and how much Amazon themselves index that in terms of your performance. So, feeling that pain on Amazon regarding the ads, I kind of learned on my technical background and actually built a solution to run Amazon ads for my business and it wasn't really intended to necessarily be a solution for everyone. But I shared it with Sean, who's now my co-founder at Ultron and he was running separately. He was running a business that he was running in the US and shared the software with him and it started to work really well for his business too.

Speaker 2:

And then we started to realize that there's a bit more of a broader pain point here, that other sellers could benefit from this. So that's when we kind of turn the software into a, into an actual sas product, which we could, um, you know, approach a little bit differently. I would say like we don't come at it from a traditional agency point of view. We try to provide like a self-service solution where, but ultron is the thing doing all the heavy lifting and, um, yeah, we've been been running it for a couple of years now, going really well. Obviously, you know, it's underpinned by pretty complicated optimization and, more recently, you know the move forward in AI. We've obviously been incorporating those tactics and skills into what Autron does. And, yeah, that brings us to today.

Speaker 1:

What business was your Amazon business?

Speaker 2:

So this was a product selling predominantly eco-friendly homework. A bit of a random choice, but you find the niche and saw the opportunity and, yeah, that business is still active today but also is used somewhat as a testing ground for Autorama. We try out all the new stuff and so forth. So, yeah, I think it was, you know, an interesting, interesting path. But now we're super focused on the Amazon store product for the sellers and bringers.

Speaker 1:

I've heard time and time again of companies that are started out of an existing company because you're addressing some sort of pain point or problem that you have with the current business. I think that's a model that works really well.

Speaker 2:

Yeah, I think, fundamentally right, you've got to address the pain point of the customer right, and not necessarily just come up with an idea of, oh, you think this would work. It's about, like, what are the customer's needs, like, how can you address them? And in our case, right, it's the main point. Pain points are around um, you know, typically you know solopreneurs or small smes, you know they don't necessarily have the in-house expertise to to run ads right and this, um, this is where autron can handle that. Um, you know they have limited time.

Speaker 2:

Again, autron is super automated. That was one of the key things. It's about setting high-level goals and it goes off and does everything. It creates all the campaigns, it manages all the campaigns, does all the optimization. So it gives you back, as a founder or entrepreneur, a lot of time, which is obviously important, and you can put that into other other areas of your business. And then again, like, and a little bit on the pricing side, what we do a little bit different is we try to we we're highly variable, I guess, which is different to typical agencies where there's quite a high upfront cost and what we do is we start on a really modest monthly fee as you scale up, then our fees kind of go up with your success. So this is a little bit different. We try to align ourselves as much as possible with success and not necessarily ad spend, which is typically how others in this space, like charge brands and sellers, what are some of the biggest changes that you've seen in the Amazon ecosystem since starting the company to today?

Speaker 2:

Yeah, well, I would say for sure, there's a very strong move towards automation and bots, right, I think, like, at the end of the day, a little quite similar to, to some extent, to Google AdWords and the way that when it did move in a direction and we're seeing Amazon moving in a similar direction, where algorithms are the ones that are in the auctions a lot of the time, right, and these are the you know obviously. You know, as an Amazon seller, you can manually run your ads, but increasingly we're seeing automation. That's Autron, that's others as well that are in this space. I always like to give the analogy towards, like, stock trading, right, I think there was a point in time where the algos kind of took over and saw all those opportunities and could react instantly to the opportunity in the market. And Amazon Ads is kind of a little bit similar where obviously the bots can be instant. They have data flow with almost real feedback of of what's happening and to adjust accordingly. So that's one of the major trends that we're seeing right and I think, generally speaking, you know, in the next couple of years, I think it's going to be, you know, 80 to 90 percent of the auctions are going to be um competing against other software solutions.

Speaker 2:

I would say so that's, I would say, one of the key things. And then amazon themselves just developing the ads platform right it's. It started off relatively rudimentary and they're plowing now a lot of uh resource into building the, the ad platform, up, making, um, you know, different video, different formats such as video, different placements, different other kind of like solutions to help brands manage their data. So a general maturity, I would say, of the advertising platform is probably pretty significant. And then, of course, just on the seller side, what we see is, of course, increasing competition. Like month cpc is cost per clicks just on one trajectory and that's going up right. So you're constantly just fighting and that's that's. As more people you know, amazon's obviously trying to get more and more sellers on board and and they all want to advertise and that drives up cost per clicks. So you kind of can't stand still with the way you're operating your ads as well, because it's getting increasingly competitive.

Speaker 1:

Are there certain types of brands that you're seeing work well now versus others?

Speaker 2:

um, I think, like um, I mean one of the kind of like key things for being successful is. So, I'd say, on the ad side, like there's, there's two really important components. Right, there's um, there's the actual advertising, which is what, what autron does, but that that that's very much in partnership with, like, the listing. If you like the actual product, you're selling. Right, so you know, because the actual product itself is what determines ultimately the conversion rate for that sale. Right, the advertiser can put the right buyer on the page, but you've got to have competitive products in terms of price, reviews, ratings. All the imagery used to be top-notch. What we see in terms of people that have the most success in general are those that still have a good product.

Speaker 2:

I think that you can't just rely on ads and expect an average product to become a bestseller. So I would say, like that's a key factor for success. And another one is more you know, operationally, I guess, like um, just stay in stock. Those who can always be in stock get rewarded by the amazon the algorithm, for you know always having, you know, a continuous sales velocity and stocking. So that's a really, really important factor, which is always a struggle, I think. Right, because Amazon is not a great business for cash flow, right? You lay out a lot of money to get inventory and then it takes you I don't know a couple of months to get that money back, etc. So you know that's always a challenge. So, managing cash, those who can manage cash flow better and therefore like remaining stock and time quality products generally, are the ones that that um are more successful got it.

Speaker 1:

yeah, it seems like there's certain categories on Amazon that are just so unbelievably saturated and commoditized and not a great spot for potentially a newcomer to play, but are there still some that are out there where you would get excited about a new business coming to market within that particular category?

Speaker 2:

yeah, absolutely like um, I think you've there's. Of course there's always ones that ride like the, the, the trends of the time, right, still being able to kind of get in early on a, on a, on a trend for a product or type of product or category is going to be meaningful, at least in the short term. But you know, there's something I want off the top of my head in terms of the great opportunity out there right now. But there's definitely opportunities and products and categories that are less saturated and are still wide open. In many ways, I would say I think it goes back to the kind of you know how you source the product is super important and who you're competing against when you source it.

Speaker 2:

And obviously, what we see is a general shift towards a lot more like manufacturers, but based based in China and Asia, selling to consumers. Right so, like that's on certain categories and products that's easier for them to do versus not right. So most of our business is in the US and North America, but we also have size one in Europe. Europe's an interesting opportunity for Amazon because, mainly through regulation, it's a little bit more challenging, right, and there's some good opportunities there. Obviously, there's different languages you have to consider. There's all these new regulations around which many European Amazon sellers are struggling with at the moment, called GPSR, which is basically highlighting providing instruction manuals and those sort of things with products. So I think, if you can get around, that's a significant barrier for others.

Speaker 2:

And actually if you can get around, that's a significant barrier for others and actually if you manage to get around that or have those things in place on your business, then I guess you can have good opportunities in those marketplaces too. So always worth thinking outside of North America too. Europe is still a significant opportunity as well.

Speaker 1:

Got it. Yeah, I think it is interesting to see sort of the mix between sellers that are on Shopify versus Amazon, versus both, depending on the geographical region that they're in, as it seems there some some areas over index on one more versus the other yeah, I think that's, that's.

Speaker 2:

I mean, it's um, I what we what we see at least is still like return on ad dollars is still pretty strong on amazon versus. You know, ultimately with shopify, you're, you know you're going to Google or Meta or TikTok or something for advertising and certainly some of those marketplaces are pretty developed in terms of income, positive in terms of the deployment capital, and Amazon, you still see good return. That's generally what we see. We tend to see people that kind of are either all in on Amazon you still see good returns. Generally, what we see is we tend to see people that are either all in on Amazon, I guess, or just don't know on the platform at all. I think there's this idea that with Shopify, of course, you don't necessarily pay the sales commission. You go to Amazon and there's a bunch of other benefits, right, but then you have to drive the traffic to your site yourself, which can be challenging.

Speaker 1:

Yeah, the closed ecosystem that Amazon offers pays off in so many ways whether it's being able to have that for the advertising side, but also just the trust that the customer has when they're already on the marketplace, especially if you have the reviews, if you have the Amazon Prime badge. There's a sort of a framework there that people are already comfortable with using and shopping from, whereas with Shopify you're landing on a random website that you may have never heard of before and there's a higher barrier to purchase for that person that you've gotten to your site versus if they're already on Amazon, especially depending on you know the advertising, you know keywords that you're bidding on. If somebody is at that sort of last step and the intent is already really high, versus you're catching them on Facebook or Instagram or TikTok and more of a discovery phase, it makes sense why the conversion rates and the advertising would be more effective on Amazon.

Speaker 2:

Yeah, I mean we're seeing quite interesting people testing it out, at least driving traffic from Amazon, I mean from Shopify, back to their store on Amazon just because of the conversion rate. You know increasing conversion rate they're seeing because you know people are just used to buying on Amazon and they know they're going to get it super quick with Prime and so forth. And Amazon loves external traffic by reducing those listings right from things like Shopify. But then the downside is you know you obviously pay the commission to Amazon, et cetera, et cetera. You don't necessarily get the customer details. So it's a it's a tricky one, but I think um worth testing out those, those different paths to to conversion and see what ultimately makes sense Going into 2025, what are some of the things that you're most excited about?

Speaker 1:

no-transcript.

Speaker 2:

Yeah, I mean, I think what we're most excited we can, you know, provide even better return on investment by, you know, further developing this technology ourselves and incorporating some of the new technologies in so that's. You know, that's often the number one concern for sellers is how do I maximize my ad spend, and the other area is around um, which we're trying. We think there's an, there's an opportunity and we think this this is where sellers would benefit from a system where, rather than you're interacting with a typical kind of account manager, you're actually interacting with an ai that is highly informed about your account. You can have conversations with it around if you want you know specifics on certain data or trends, you can ask it questions, you can instruct it to do things. So this is kind of like we see this kind of like personal assistant account manager being digitized and being highly performant and ultimately yielding, you know, better results for the sellers as well as keeping them more informed. So this is an area which we're super excited for. This is what we're building towards. I think, you know, this is kind of agencies 2.0 in many ways, and I think, in general, amazon is just always churning out also like new tooling and new cool things and new ad placements and all those types of things which I think are going to benefit sellers and we hope to be able to think are going to benefit sellers and we hope to be able to offer those products to sellers too. So this is kind of like what we're building towards and what we're excited about in 2025. In terms of the challenges, I think I mean, obviously we're always just fighting this constant increase in CPCs. I think it's getting more competitive, so that's just something that's part of being in this business.

Speaker 2:

I would say diversification is still quite important. I think you never want to be too reliant on a single platform, both from a seller point of view and also a solutions point of view. So this is where I think it's always wise to make sure you have some diversification of your sales channels. Yeah, I would say those are the main considerations. Yeah, I would say those are the kind of main considerations Overall.

Speaker 2:

If you look at the kind of in Amazon in particular, if you just look at the quarterly earnings and profits and growth, they're still on a very positive year-on-year trajectory of like 20% growth, month-on-month quarter-on-quarter right, or year-on-year trajectory of like 20% growth, quarter-on-quarter or year-on-year quarters. So that just kind of means that there's a wave that everyone can benefit from, I think, as more people adopt the platform and ultimately more sales are going through it and there's great opportunity. So that's very positive, but also you need to be so that that's very that's very positive, but also you know you need to be mindful that it's like turning into market dominance, like it's always a bit risky yeah, definitely.

Speaker 1:

Um, I got one last question for you, a little bit less on the actual, like amazon platform itself, but more on the on the business side of things. How do you think about balancing service versus software and?

Speaker 2:

the offering that you're giving your, your clients um sure so I think our thinking on this has changed slightly in the last um year or two. I would say, um. Initially we were like 95% software, and I think this was this is very good from our business point of view in terms of like, you know, generally speaking software businesses, you know, lower fixed costs and better margins and the economics of it make a lot of sense and we certainly have customers that love that, that uh model, I guess, the kind of self-service model. But what we have seen is that there is a decent chunk of people that want, you know, closer to a white glove service right, and they want to interact with a human like and whether that's like super robust conversation or whether that's just knowing that you know they're being taken care of. And so we've naturally kind of um expanded our offering to be educated towards both types of of audience.

Speaker 2:

It's still biased towards software, but I think there's all you know. You know, agencies kind of exist for a reason and they're very much like a people's business, just as they're less results orientated. It seems, as you know, I would say, in more kind of like relational relationship building and maintaining type of business. So, yeah, we we of course want to want to cater for the different requirements, um, but I guess our view still on it is that now, with ai kind of on the increase and its ability to act and speak and behave with the human means, that we have to move back into the software direction. Um, but kind of mimic that human behavior, I guess. Right, and this is this is where we're trying to produce a cutting-edge product in terms of an AI agency, if you like.

Speaker 1:

Got it? No, that makes sense. Well, I really appreciate you coming on and sharing all of your insights, but before we hop here, can you let everyone know where they can find you online and connect with you if they want to learn more?

Speaker 2:

Cool, yeah, so probably LinkedIn is probably the best place. So just hit me up JunionTimings on LinkedIn and then check out what's it, autronai, start a chat on there and if you're asked to speak to me, I'll jump on there and more than happy to jump on a call with people and answer their questions and guide them through what we do and how we can be helpful. That's about it.

Speaker 1:

Awesome. Well, again, thanks for coming on For everybody listening. As always, this is Brandon Amoroso. You can find me at brandonamorosocom and scalistai. Thanks for listening and we'll see you next time.