Amazon: The Quietest Big Ad Business In Tech Would Like Your Brand Ads, Too
Who's got the quietest big ad business in tech? It's probably Amazon, which started modestly six years ago placing product ads on its own sites.
"They were very untargeted, static ads across Amazon.com and IMDb.com," said Amazon VP Lisa Utzschneider, talking to us in advance of her appearance at Ad Age's Digital Conference next week.
Six years later, Amazon is charging hard into the brand ad business, selling ads to clients like Lexus and Chrysler, which will probably never sell cars on Amazon.com. Amazon entered the ad business as a way to generate more sales on Amazon sites, but since then they've expanded to various Kindles, mobile apps, and off-Amazon through retargeting technology built in-house that can reach Amazon customers around the web segmented by demographics as well as those "in-market" for certain things like electronics.
To help with the retargeting offering, Amazon is said to have built its own demand-side platform -- or DSP -- that allows them to load all their customer data into a media-buying technology to target Amazon buyers on other web properties.
Amazon is taking the ad business seriously, and that means publicly talking about it. Ms. Utzschneider first broke Amazon's silence last fall at Advertising Week when she pulled the wraps off "Amazon Media Network," Amazon's play for brand advertising dollars.
How big is Amazon's ad business? Like Kindle sales, it's hard to tell. Safe to say quite a bit, given the sheer size of Amazon properties, which include Zappos, IMDb and Diapers.com and reach 108 million people a month, per comScore. In addition, Ad Age reported last year that Amazon was asking up to $1 million for ad packages that included the welcome screen of new Kindle Fires. Like Amazon's vast and growing media business--both physical media and downloads and services--Amazon doesn't need advertising, so it can afford to build the business methodically and in a distinctly Amazon way.
"We don't spend time on the competitive landscape," she said. "The way we think about it is, 'What's right for our customers?'"
Like you'd expect, e-commerce functionality is built into many of its ads, as well as the ability to consume media, like a movie trailer. At the end of last year, Amazon launched a coupon unit where an advertiser can embed a 15% or 20% discount into the ad when you click to purchase.
The next frontier for Amazon is deepening its agency relationships and building its brand advertising business, which is measured not by immediate transactions but by studies of things like "brand lift" and awareness. Amazon's fastest-growing categories, for example, are autos and travel.
"Lexus partnered with us on Kindle Fire," she said. "We don't sell cars. They saw Kindle Fire as sight, sound and motion, a great palette to tell a story to a very engaged audience."
Six years in, Ms. Utzschneider believes they're still scratching the surface of what Amazon's ad business can be. "We like to say it's day one heading into day two," she said.