Have you ever gone online and not seen a single ad or
pop-up window? Hardly. Online advertising has become an essential attribute of
the Internet. Most of the ads we see (yes, those text boxes on the majority of
websites or the ones that appear on the bottom of most YouTube videos) are
powered by Google AdWords. Facebook and Twitter launch the “Buy” button; I
wonder how many peopled have tried it out already? And, of course, Amazon wants
to get its share of advertisement dollars. A couple of weeks ago, Wall
Street Journal reported that
Amazon plans to launch its own ad placement platform, Sponsored Links, later
this year.
It would be wrong not to mention that Amazon
already has a couple of advertising options, such as Amazon Product Ads, Amazon
Media Group, and Amazon Local, so why would it spend millions of dollars on new
software development? Until now, Amazon was one of Google’s biggest ad buyers,
meaning the online retailer’s expenses turned into its competitor’s revenue.
What exactly is the Sponsored Links
platform?
Amazon defines Sponsored Links as
“advertisements related to your recent product search query or content on the
page [that] are always clearly labeled.” According to Forbes,
Amazon Sponsored Links will work similar to Google’s AdWords, which is based on
keywords data that makes advertisement targeting quite precise. In addition to
that, advertisement agencies would be able to buy ads in bulk for numerous
clients. Based on the information gathered from millions of its customers,
Amazon Sponsored Links will have the ability to target the right ad to the
right audience at the right time and in the right context.
Is the new direction too risky for
Amazon?
Critics have mixed feelings. On one hand,
Google has a more-than-a-decade head start in the online advertising business
and development, and it would be hard to compete with the industry leader. On
the other hand, Amazon has a great advantage – valuable data on millions of
shoppers. Over the years it has collected a vast database of transactions,
search, demographic and personal information about its customers. Neither
Google, nor Facebook could possibly have such information. When you visit
Amazon.com, the system knows what items you looked up before and, more
importantly, what you ended up buying. Amazon has an opportunity to make
sponsored ads better targeted than ones from Google; it can make ads more
“click-worthy” for shoppers, and therefore give a better value for advertisers.
Currently, Amazon Sponsored Links is still in
the development stage, so the most important questions remain unanswered. Can
Amazon use its information advantage effectively to compete with Google? Will
the ads be relevant enough to reach their targeted audience? If you were a
business owner, would you entrust your advertising dollars to Amazon rather
than Google?
Do you think that Amazon will beat Google at advertising with this new software or will Google remain the industry leader.
ReplyDeleteGoogle will remain the industry leader because it dominates the search industry, and owns both the second largest social media website and second largest search engine YouTube.
DeleteAmazon will eat into some of Google's market share but unless and until Amazon enters into the search or social markets in a meaningful way, Google has nothing to worry about. Keep in mind that both Bing and Facebook working together and have not been able to steal market share.
I feel as if Google is too much of a powerhouse to be overthrown soon. We learned how Google makes the majority of their profits through advertising. Seeing as how Google is a free service, I would assume that they would do everything in their power to keep themselves at peak performance when it comes to advertising.
DeleteMy question is how is this differing from the section at the bottom of most pages where it says "guests items bought with this item" or the features along that line? Will these be actual advertisements for stores or do they not know yet since it is still in a developmental phase?
ReplyDeleteAria, from what I understand, the sponsored links are links that are appended to the bottom of an Amazon search result's page (for certain product categories). If you search for "shoes" and scroll to the bottom of the page you will see a handful of "Sponsored Links" following the list of search results. These links also, often redirect to non-Amazon sites.
ReplyDeleteThis makes sense, I understand. Amazon is trying to expand their business by having others connected with them to make shopping convenient and personal for their customers.
DeleteI would definitely trust Amazon with advertising if I were a business owner. They are so good at predicting what items I am interested in looking at I find myself going on Amazon at least once a day just to check out what they suggest for me. I am a long time user of Amazon Prime and find that it is so worth it to be able to get packages shipped so quickly for nothing. If their ads work half as well as their suggested items do, I would confidently invest in their advertising!
ReplyDelete