Amazon Becomes Latest Digital Advertising Threat

Americans are conducting 43 percent of their online shopping through Amazon, so it should come as no surprise that the web retailer is now offering vendors and brands the opportunity to leverage its vast consumer data through advertising in its Amazon Media Group.

As the world’s largest retailer, it has the ability to gather data that other advertising platforms simply cannot. Amazon users freely give up their most personal information, from their home address, birthday, and names of family members and friends, to their daily shopping habits and exactly what they browse before deciding to make a purchase. And allowing advertisers to access even a portion of that information through the company’s new self-serve ad-buying platform makes buying advertising on Amazon seem like an easy decision.

Amazon has allegedly also been offering sellers $99 coupons and other incentives to try out the new advertising options available to them through Amazon Marketing Services.  Overall, the Amazon ad business looks to bring in as much as $2.5 billion annually, according to advertising executive Martin Sorrell, founder and CEO of WPP.

Kristin Rae, who runs Inspire Travel Luggage and sells her product as a third-party seller through Amazon, told Digiday, the new ad options from Amazon “…let me dominate keywords. I know I spend the same amount within Amazon and get more targeted return than anywhere else.”

While it doesn’t appear right now that there is much benefit for digital news and other content providers, it does show that when competing with platforms such as Google and Facebook, the type of data can matter more than the amount. Hearst Magazines is attempting to take on the duopoly with their own vault full of consumer data. The media giant claims to have amassed consumer data on more than 120 million people in the past year, and they’re planning to use that data to act as a “storefront” for readers, who will be able to shop via the company’s many individual magazine sites. While not every outlet has the same broad reach as Hearst, all content providers need to be thinking about the quality of their data and how its value can be maximized.

Amazon’s implementation of a self-service advertising tool is something news organizations can also learn from and work to bring to their own advertisers. By creating a portal to ad-buying, Amazon is treating all advertisers equally regardless of budget and offering them the same value per dollar. Amazon opened up their top-level search ads to brand owners and gave third-party sellers access to advertising options that they couldn’t previously take advantage of.

Bringing a similar ad operation to the news industry would give local advertisers the same access to advertising as larger regional and national partners, which could encourage more spending from those who wouldn’t see the same ROI from advertising through the larger platforms.

We’ll be keeping an eye on Amazon’s growing presence in the advertising space, and the impact it will have on our members and the print advertising business as a whole.


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