Amazon’s ad business is starting to look like Google: Analysis

  • Amazon offers advertisers products similar to those offered by Google.
  • AWS technology plays a bigger role in Amazon’s advertising products.
  • Amazon is also making inroads into TV advertising, where Google doesn’t play as much of a role.

Previously, Amazon’s advertising ambitions focused on search ads to promote products available through Amazon’s marketplace. But today, Amazon’s ads business is the third-biggest seller of digital advertising after Google and Meta, and this business generated $31 billion in revenue in 2021.

Amazon Advertising is expanding its influence beyond its platform to the entire web, much like Google’s sprawling advertising business.

At the recent UnBoxed conference, Amazon’s ad executives revealed how they achieve this by connecting ads to Amazon’s massive Amazon Web Services cloud business, the availability of live sports on Amazon Prime and its powerful data tools.

Here are three ways Amazon plans to boost its advertising ambitions.

Amazon uses its massive AWS cloud business to make ads perform better both on and off Amazon websites

Amazon has traditionally separated its advertising business from other businesses like AWS, but those lines have disappeared.

“Amazon Ads is no longer just a media provider – Amazon Ads is evolving into a technology provider that solves our advertisers’ biggest challenges,” said Joe Luchs, Global Business Development Lead for AWS and Amazon Ads, during a presentation.

Amazon’s adtech products, using AWS technology, illustrate how Amazon’s ad business is expanding in the digital advertising industry and competing with Google much more directly than in the past. Amazon has a shopping platform and ad server that can place ads outside of the Amazon website and app that use AWS infrastructure. That helps advertisers analyze data and run campaigns faster, Luchs said.

For example, Amazon’s data clean room – Amazon Marketing Cloud, also hosted on AWS – allows advertisers to match first-party data, such as email addresses and sales, with Amazon’s data, and then use that combined data to run marketing analytics and operate advertisements, said Lynx. In another example, advertisers can use AWS’s SageMaker machine learning platform to build algorithms to find customers and zap them with ads across the open web.

Amazon allows you to track if someone bought a product from Amazon

Paula Despins, VP of Ads Measurement at Amazon Ads, said at the conference that Amazon is rolling out a new measurement tool that will analyze people who saw an Amazon ad but ended up buying a product from another retailer.

Amazon will initially offer the tool to consumer goods and grocery advertisers, but plans to expand it to other types of advertisers in 2023, Despins said.

In addition to CPGs, Amazon has also courted other high-spending advertisers, such as insurance and auto companies. One way Amazon is doing this is by investing in tools that can measure things like awareness and brand loyalty.

Amazon makes a big investment to make linear dollars by investing in live sports

Unlike Google and Facebook, Amazon has delivered on its grand ambitions to get into TV advertising, most notably by acquiring the rights to premium sporting events that drive linear ad spend, like the National Football League’s “Thursday Night Football.”

A presentation at the Amazon conference showed that people who watch “Thursday Night Football” also watch the games exclusively on Amazon, rather than on competing sports networks like ESPN and NBC. To date, Amazon’s exclusive rights to Thursday Night Football games have garnered huge ratings, which advertisers use to gauge audience size for streaming versus linear TV.

Amazon also has big ambitions to sell advertising in other areas of streaming TV, including its Amazon Fire TV platform and FreeVee, formerly IMBD TV.

source

Leave a Reply

Your email address will not be published. Required fields are marked *