Amazon Turns to Purchase History Data to Ramp Up Advertising
By David Tobia
October 22, 2012
October 22, 2012
- Amazon is positioned to make up to $1 billion in advertising over the next year, according to Baird Equity Research.
- While Facebook “knows who your friends are” and Google “knows what you’re interested in finding on the Internet,” Amazon has the unique advantage of purchase history. This is an immensely valuable item to offer advertisers who want to target people who will actually buy their products.
- Amazon can use its user purchase history data to help create targeted advertising on its ad-supported Kindles. Amazon can also use the data for a per-click advertising model on Amazon.com as well as Amazon-owned sites such as Zappos, IMDb, and Diapers.com, reports Wired.
- Lisa Utzschneider, VP of global sales for Amazon, explains that Amazon’s advertising could help customers. “If we think about Amazon in two worlds, one world is an Amazon with ads and lower prices. Another world is an Amazon with no ads and higher prices,” she notes. “Which one would we choose?”
- Amazon is the sixth most visited site in the U.S. every month, according to comScore. The top five sites all rely on advertising for revenue, but Amazon does not. It has already been successful without advertising, but if the company combines its substantial traffic with its precise user data, it could add much more value.
- Additionally, the company’s demand-side platform (DSP) enables tracking of people who made purchases on Amazon, data that can be used to advertise on different sites.
- “The winner in the media game is the one who can best identify a user and match that user up with an affiliation that an advertiser cares about,” suggests Jay Habegger, CEO of Boston advertising firm OwnerIQ.
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