Business

Amazon’s new ad network has a secret weapon against Google AdWords: shopping data

Above: Amazon's Jeff Bezos at a 2010 event.

Image Credit: Jurvetson/Flickr

The secret to delivering relevant ads is data. Demographic, psychographic, personal data. Google has data on what we search for, Facebook has data on what we like and share, but Amazon’s data may be the best of all for targeting ads. It has data on what we browse and buy.

That’s why yesterday’s revelations that Amazon is gearing up to launch its own ad network are particularly interesting: Amazon could offer retailers a much-wanted alternative to Facebook and Google ads, and Amazon may prove to be better suited than either of its rivals at putting ads in front of consumers that actually get clicked.

The new ad network, which Amazon is calling “Amazon Sponsored Links,” will also set up back end systems that allow ad agencies to “buy audiences” by buying ads in bulk. The agencies would then place ads on behalf of their clients based on the target audience demographic of the product.

Again, those ads would be targeted to consumers using a sophisticated real-time system that knows the viewer’s product preferences, as expressed by their browsing and buying history on Amazon.

If all this happens, Amazon’s new platform would look a lot like Google’s AdWords program, in which more than a million users bid on ad inventory on sites all over the web..

Right now Google and other third parties place ads for clients on Amazon, but that will likely be the first thing to change. Like Facebook and Google, Amazon will place its own clients’ ads on its own site.

Amazon already has a small program that can place ads for clients on other sites. But reports yesterday say the program will get much bigger, and will run different sorts of ads. Amazon likely will launch a wider ad network through which it will be able to target ads for advertisers on lots of partner sites around the web.

Amazon has already told some of its existing advertising partners that it will launch the new ad network later this year.

This could be a particular threat to Google, whose business rests on the $50 billion or so it makes every year on web ads.

An ad network would add one more battleground on which Amazon is competing with Google. Google Shopping puts up a small fight against the Amazon site. The Google Shopping Express competes with Amazon’s AmazonFresh and local pick-up services. Both companies now make phones, and the two are currently in a price war in the cloud storage market.

More information:

Amazon.com, Inc. (NASDAQ: AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth's Biggest Selection. Amazon.com, Inc. seeks to be Earth's most customer-centric company, where cu... read more »

Google's innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major glob... read more »

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7 comments
iConversing ey phua
iConversing ey phua

Amazon has huge advantage because of the purchases, history, frequency, price range it has by its customers.  What it doesnt have is B2B & information about services.  Just wrote something on this http://bit.ly/1oyiMXW

Family Pitt
Family Pitt

So what if find interesting is that even when Amazon has my data... AFTER I purchase the item I was looking for, I continue to get ads about what I have purchased rather than other items the what might be compliment to the items and what i might purchase.

Definitely seems like this targeted ad thing is putting the horse behind the cart. If I purchased shoes, I dont need shoes but I might need new socks or pants. When I purchase skis I dont need more skis but poles or goggles would be helpful.