Digital Insights

Amazon Gears Up to Give Google AdWords a Run for its Money


Published: September 8, 2014

Ecommerce powerhouse Amazon is putting the final touches on Amazon Sponsored Links, its online advertising platform that appears to be aimed squarely at Google’s estimated $50 billion per year slice of the digital advertising pie. An official launch date has yet to be announced but industry sources believe it’s going to kick off in the latter half of 2014.

While Google is the dominant force in the search industry, Amazon is clearly the leader of the pack when it comes to online retailing. Advertising experts estimate that Amazon’s vast database of consumer spending habits could easily be leveraged by the new advertising platform to generate $1 billion in revenue in its first full year of operation.

Amazon is admittedly tackling a tough market dominated by well-entrenched giants such as Google and Facebook, but its consumer database gives it a distinct advantage that no other advertising network can match.

Amazon competes with Google AdWords

Possible Early Sightings of Amazon Sponsored Links
Visitors to the Washington Post’s online edition may have already received a sneak peak of the new Amazon Sponsored Link platform.

  • Within the text of a recent Post article that referenced a classic by author Roald Dahl, an Amazon “Buy Now” button appeared that linked directly to the book’s Amazon sales page.
  • The link was soon removed, with the explanation that it was mistakenly displayed. While it may indeed have been a mistake, the unanswered question is why the link was created in the first place if not as a test of the new Amazon ad platform.
  • Coincidentally or not, The Washington Post was recently bought by Amazon CEO Jeff Bezos. The purchase was made by Bezos as an individual and not by Amazon as a corporate acquisition.

Amazon’s Advertising Advantage
Amazon has amassed what some industry experts have described as a treasure trove of consumer shopping and buying data over the past 15 years and has been using that information to recommend related products to Amazon customers. In recent years, that database has been used to buy and resell advertising inventory, allowing advertisers to create highly targeted campaigns on the most efficient online display platforms. Amazon buys online ad space from content publishers as well as through exchanges, and delivers ads for its customers to thousands of third-party websites in real time through its Amazon Advertising Platform.

Amazon demonstrated the power of its knowledge of consumer buying patterns in a recent advertising campaign promoting a major theatrical release. Amazon sales data of related DVDs, books and music allowed the production company to identity and target the best potential audience for the movie. Total impressions and clicks for the resulting ad campaign were described as being well above average.

According to a source at Kantar Media Compete, Amazon has evolved from being a simple online retailer into the largest behavioral marketing company in the world. “Amazon will be the best positioned to predict whether to buy inventory or not and be the most efficient in this market.”

Amazon’s database helps marketers allocate their ad spends more efficiently because they can better target their best prospects and only pay for accessing those who are most likely to buy.