Amazon Poses a Potential Threat to Revenue Stream Giants
Amazon is planning on disrupting the digital ad market in a major way by introducing a new digital ad display for marketplace sellers. Per a report by Bloomberg, this new ad offering will enable sellers to bid on ads on websites and apps outside of Amazon. Sellers will be able to track shoppers through their online browsing sessions and then lure them back to Amazon.
[bctt tweet=”Amazon Prepares to Test a New Ad Retargeting Tool. Read on for all the details.” username=”relevance”]
This new ad offering could be perceived as a power move against multibillion-dollar revenue streams like Google and Criteo SA, which racked up $2.3 billion in revenue last year with its re-targeting technology that allows sellers to follow web shoppers who have previously shown interest in their companies and then serve ads tailored to them.
Currently, Amazon allows merchants to purchase various other ad types including ones for Kindle books, apps, and solutions for products not sold on Amazon. The company has been giving priority placement to these sponsored product spots in its search results. Details are minimal at the moment but this new offering will give merchants a much wider reach.
Pros and Cons to Amazon’s New Ad Offering
Reportedly, some sellers are wary of Amazon’s retargeting ad service. Chad Rubin, co-founder of Skubana told Bloomberg,
“Some sellers are concerned that the service will give them a limited view of where ads appear online, reducing their ability to increase spending on sites that are performing the best.”
On the flipside, many analysts are on board with this move as it is more profitable than selling things online.
Amazon’s ad business has been growing steadily with media post reporting that Amazon listed their advertising sales “within “other,” a category that climbed to $2.0 billion in the first quarter of 2018, which is about a 72% increase from a year earlier with some adjustments.”
This number is slow compared to Google and Facebook but advertising on Amazon arguably makes more sense than advertising on browsing sites. People visit the site specifically to shop and add products to their wishlists, as opposed to Google where they browse and Facebook where they connect with friends and family and watch and read content.
The company is reportedly inviting a select number of merchants and marketers to test the ad product later this month. Sellers will only pay Amazon when they receive clicks.
A Word on Content Promotion and Retargeting
Retargeting for content marketing purposes can be a worthwhile strategy to consider and if done right, it can grow your user base and/or your revenue. According to Relevance contributor Jonathan Crowl,
“When it comes to wielding retargeting as a content marketing tool, marketers can incorporate content by linking to that original content through various strategies. With display and through other paid ads, for example, retargeting can be conducted through a specially made advertisement that then links to original content—so long as that content aligns with the strategy behind the retargeting.”
There are many positives to retargeting but it’s important to consider that a large number of people find retargeted ads annoying or unnerving. If overdone, they can be detrimental to your overall content strategy.
The limits that marketers can go to invade user privacy has always been up for debate but this year it’s been tested thanks to Cambridge Analytica. Privacy concerns have been thrust to the forefront this year and it’s only natural that from an outsider’s perspective, ads that follow you can seem a bit invasive.
[bctt tweet=”Is ad retargeting right for you? Read on for a breakdown of the pros and cons and an insight into Amazon’s upcoming ad retargeting tool.” username=”relevance”]
Of course, the majority of advertisers and marketers are not out to steal user information but we have to think strongly about how our audiences will perceive retargeted ads. We also have to think about age demographics. Typically (but not always), older generations are not as well versed in the way digital advertising works and may have more negative reactions to retargeted ads than younger generations would.
It’s important to inspire users to take action, not to scare them off. If you decide to start integrating retargeted ads into your content strategy, make sure the majority of your audience base will feel comfortable with it.
Of course, there’s no way to avoid negative feedback when it comes to ads, no matter how creative or engaging they might be. However, we can always minimize discomfort and annoyance if we pay attention to our audience and create content that people will actually be interested in.
For more on content marketing and retargeting, check out The Future of Retargeting Ads Includes Mobile and Attribution Management by Riley Wilson.
Do you think Amazon is a potential threat to Google, Facebook, and Criteo SA? Share your predictions in the comments.