Amazon and Advertising
by Marta Mattioli, Mindshare
Amazon has always been ahead of the game with its use of customer data – Amazon’s data based recommendations is one of the Internet’s best known sales tools - but now the world’s largest online store has gone one step further by launching Amazon Media Group – an ad network that uses Amazon’s customer data to allow advertisers to target specific audiences across its owned and affiliated sites and devices. Details
The Amazon Media Group offering crosses three distinct areas in the company’s expanding ecosystem. The first is offering display ads across Amazon’s owned-and-operated sites including Amazon.com, IMDB, Diapers.com and Zappos.com. The second is offering advertising across its devices: Kindle, Kindle with Special Offers and Kindle Fire. The third is using customer data from its ecosystem to give marketers the ability to target across its ecosystem. If a brand already sells products on Amazon, these are promoted through advertising, which links to a product-detail page. An example of a brand that has been doing this is Procter & Gamble; it uses the Amazon Media Group to boost awareness of a new product on Amazon. If a brand doesn’t have products on the platform, it can still use Amazon Media group to gain insights into how its audience is spending time on Amazon and target them with relevant ads. An example is Chrysler's Town & Country family car marque, a brand which wanted to connect with mothers who are spending time on Amazon. Amazon Media Group is now actively engaging with agencies to drive uptake of the advertising services. Implications
It is a generally accepted view that consumers prefer services that are free, supported by relevant advertising, compared to paying a fee or subscription for that service. Amazon has a track record of delivering that relevance and so is in a great position to expand its advertising capabilities on devices such as the Kindle. Both online, and on mobile devices, Amazon is attempting to secure its position as a global media player, in a race against other technology titans such as Google, Yahoo, Facebook and Microsoft, who are all using the breadth of data collected across their networks to drive better advertising solutions. Summary
Amazon is the number one e-tailer in the world. Facebook is the number one social network in the world. Google is the number one search engine in the world. Microsoft’s windows platform is the leading desktop operating system in the world and Apple is in a two horse race with Android for smartphone OS dominance. There are huge silod buckets of data out there which are now being put to use to target consumers. It was only a matter of time before Amazon joined in. Online or mobile retail has taken longer to develop the kind of numbers that you find from the rest, but the quality of the data is arguably just as good, if not better as it includes purchase data. Used together with the other leading sources, brands have just been given another high quality way of targeting their consumers. What brands still require is the right partner to navigate this new data rich environment. That is the role of the media agency.