Amazon, With Little Fanfare, Emerges as an Advertising Giant
eMarketer is underestimating Amazon's ad revs by a few billion. High margin ad revs will finally get Amazon to that double-digit operating margin goal they told Wall Street about 12 years ago, that the model can get to. Amazon has been building out their ad platform for over a decade and they have been
eMarketer is underestimating Amazon's ad revs by a few billion. High margin ad revs will finally get Amazon to that double-digit operating margin goal they told Wall Street about 12 years ago, that the model can get to. Amazon has been building out their ad platform for over a decade and they have been an active part of Advertising Week in NYC for multiple years. They realized the importance of advertising as part of the mix when they built out A9, which was their search engine meant to topple Google. It floundered, but they kept pushing in other ways. It worked.
I think where Amazon needs to tread carefully here is the customer experience. Already it’s difficult to tell when something is an ad. People don’t like being deceived like that and don’t want ads crammed into every nook and cranny of a site or platform.
Amazon is everywhere. It must be awkward to know that the ecommerce giant is competing with your products AND selling you ad space on its site. This article also points out "trade marketing" a (in-store promotions), a practice built on legacy relationships and in Amazon's line of fire
This was always a no-brainer. I’m surprised it’s taken so long. And they’re just getting started.
The biggest takeaway for me from this article isn’t about Amazon, but about how dominant Google and Facebook remain. If Amazon is No. 3 with just 4% of the market, it means the top two have a freighting degree of power.
Moving into trade marketing and adopting (temporarily) the old-school ways of payment is another brilliant integration of online and offline worlds by amazon. It’s almost hiding in this article but it’s another huge amazon disruption.
we’ve seen this developing with our retail clients needing to run on amazon—and doing so with great results. but it’s all part of the bigger amazon question which is when are they a monopoly? applies to everything they touch.
The most surprising thing about this is how long it took, really. Amazon has boatloads of user data just like Google and Facebook, plus the infrastructure to back it up, it just makes sense to make money on it the same way.
Are You Here Yet?