Amazon To Take On Google With New Online Advertising Business

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The Wall Street Journal reports that Amazon is planning to launch its own ad network to compete with Google’s online advertising business.

Amazon is calling its new ad network “Amazon Sponsored Links,” which will have back end systems in place that allow ad agencies to “buy audiences” by buying ads in bulk. Those agencies would then go ahead and place ads for their clients based on the target demographic for the products and services they’re selling.

What Amazon first plans to do is replace the ads on their own pages that are primarily supplied by Google with a new in-house ad placement platform. Amazon will instead place their own ads for their own clients.

Looking towards the future, the Wall Street Journal believes that Amazon’s system could challenge Google’s $50 billion-a-year advertising business.

VentureBeat has raised a good point stating that Amazon holds a secret weapon over Google: shopping data.

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.

Amazon could be a welcome replacement for advertisers and retailers looking for an alternative to Facebook and Google ads. Amazon may prove to be more effective at putting ads in front of consumers that actually get clicked due to the wealth of data they have at their disposal.

Amazon’s ads would be targeted to consumers in real-time using a system that understands what an individual likes based on their browsing and shopping history.

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

Matt Southern

Matt Southern

Lead News Writer
Matt Southern is the lead news writer at Search Engine Journal. His passion for helping people in all aspects of online marketing flows through in the expert industry coverage he provides.
Matt Southern
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  • Ethan

    Shopping data will be valuable, but like all data it’s about how you use it.

  • Norton Loomer

    I hope that Amazon ads use better data points than their current “You bought this, you may like this” system. Amazon has recommended things I’ve already bought. They have also recommend I buy my own books.

    • Norman

      “They have also recommend I buy my own books.” Funny. That is both obvious, and silly.

  • Jenny

    This is interesting- Amazon does have the edge based on what consumers actually buy.

  • Rank Watch

    Amazon will give huge competition to Google with its own network. The main point of discussion is whether Amazon will expand outside its own network.

  • Sera

    The only way, right now, that “Amazon’s system could challenge Google’s $50 billion-a-year advertising business” is if a great portion of Google’s income from paid aids came from Amazon. Since I’m not privy to what percentage of Google’s ad income comes from Amazon, I wouldn’t want to declare a position, but I can speculate: I’m sure Amazon sends a big chunk of money, maybe even millions, and certainly at least a few hundred thousand, to Google for paid ads. Yet isn’t that a drop in the bucket when compared to Google’s billion dollar ad biz? Either way, it is a sizable chunk of change, to be sure, and I’m sure Google will notice, but will it “challenge” Google to change their biz strategy and methods? I doubt it.

    And it really has no impact on the consumer as far as I can see, unless Amz passes their savings onto consumers.

    I just hope Amazon makes some big mistakes so they lose some big clients (or their clients buy less ads) so Amz in turn charges less to sign up for their advertising platform so smaller businesses (like myself) can afford to advertise on their site before they jack their prices up again. LOL. Hey, I can dream. Seriously, though, Amz knows they’re huge, and they’ll probably start out charging a lot to put ads on their site.

    But then again, many big retailers, distributors and even manufacturers already sell on Amz and utilize internal ads in various ways (eg, paid links, winning the buy box, superior keyword utilization and SEO optimization to rank high in Amz search to begin with, etc.) so why would those big companies want to pay a lot to get more ads on a site where they probably already have high visibility? And if that’s the case, then maybe the cost for putting off-site ads on Amz will be more affordable.

    If I may also speculate further: Amz might then branch out in the future and offer their newly established customer base (the paid ad clients) an opportunity to join Amazon’s new PPC platform (similar to Clickbank and other affiliate programs) that I prognosticate Amz will develop as an entity separate from their online shopping site, whereby they coordinate exchanges between paid advertisers and high traffic sites that want to earn income from those advertisers, without any traffic from those ads being sent back to

    Although I may be way off, it’s fun to speculate, and I’m eager to follow this to see how it pans out. In the meantime, I should maybe get on with optimizing the present. 😉

  • ey phua

    Yes, Amazon has huge advantage here not only on the items purchased, but entire purchase history and browsing habits of customers on Amazon when the user is logged in. Google’s cookies expire and can only estimate whether its the same user.
    For B2B advertising though, Amazon will have no advantage. Alibaba, soon to debut the likely largest tech IPO ever, could have this (B2B) data at hand. Watch the fight of this titans.

  • Kurt Krake

    It’s a little naive for the WSJ to say that Amazon has better data than Google on what we browse and buy. Via Google Analytics, Google has a large large share of retail ecom data. Amazon would be a shadow of its current form if Google had not started ranking Amazon high in commerce oriented SERPs a long time ago now.

  • Akshay Sapkal

    That’s great to here…
    But the thing is will it get out of its circle….and how would be its CPC ?
    Hope that it looks pretty than Google Ads 🙂