
How Amazon’s Ad Business Could Threaten Google and Facebook - tim_sw
https://www.wsj.com/articles/how-amazons-ad-business-could-threaten-google-and-facebook-1517157327
======
j-c-hewitt
Since their ad program was released, I've been running ads on Amazon as well
as ads on the other platform for both clients and myself.

Amazon's ad platform has always had fewer features, a crappier interface,
worse third party software available, and has at times run by confusing rules
that aren't fully documented.

None of that matters because it's 4-10x+ more cost effective and doesn't
require a large budget or a sophisticated account structure to generate
profitable sales in volume. In general the American people have demonstrated a
preference and that preference is that more than half of them want to buy
stuff on Amazon and not on other websites. Trying to get people to buy stuff
on a non-Amazon website is rolling the stone uphill. It doesn't hurt that
basically the entire middle class demographic in the US subscribes to Prime.
If you sell physical things to customers online there is no better way to do
it at this time.

There are many issues involved in selling stuff on Amazon (and being an Amazon
customer) but those problems really pale in comparison to the business model
of running your own store on non-Amazon fulfillment and paying GooFaceBannerAd
to drive traffic to your website that would really prefer to be going to
Amazon.

~~~
thisisit
So, you are saying while the general theory is that people want to buy stuff
on Amazon but using the GooFaceBannerAd you are able to drive traffic to your
non-Amazon store and sell stuff to people?

Edit: As I am getting downvoted let me clarify to the query. I am a bit
confused as the post seems to suggest getting people to buy stuff from non-
Amazon site has been difficult.

In which case I wonder how effective it is to bypass Amazon ad system and
getting people to your own site. Or am I misunderstanding the post and the ad
connects back to amazon product page.

~~~
j-c-hewitt
It is confusing. No I'm referring to the internal Amazon ad system that the
article mostly refers to. If you search around Amazon with your ad blocker off
you'll see results with "Sponsored" next to them.

~~~
thisisit
Thanks for the clarification. You are using these banner ads to drive traffic
to a non-Amazon site or re-direct people back to Amazon product page? Because
selling stuff on former seems difficult.

------
CodeSheikh
We see (or are forced to see) ads on Google, Facebook et al. is because they
are free to use services for consumers. Eventhough that bother some us so much
that we use all sort of ad blocking plug-ins at our disposal to stop seeing
those pesky ads. I pay for my Amazon Prime membership and for every product I
purchase on Amazon.com. Last thing I want is getting bombarded by obnoxious
ads. while shopping for my next two-day delivery of Topo Chico water bottles
there. Unless Amazon decides to roll out a steeply discounted Prime membership
program, I would be a very unhappy customer seeing ads on a paid platform.

~~~
tanilama
Ads for Amazon is like Walmart choosing what product to be put on display and
where. It is an established business.

I echo some of your sentiment. If Amazon is truly as customer obsessive as
they branded themselves, they would avoid putting cheap ads out there. Since
their click rate is going to be so high, those ads will be very expensive
indeed, which I would assume to be quality ads as well.

~~~
CodeSheikh
Quality ads would be like "hey see that you are buying Topo Chico. Why don't
you try these new flavors as well at a discounted rate?". Instead of "Buy
Nestle water" ads. Or something very unrelated. Basically a win-win situation
for both parties.

But to be honest I would be very much reluctant at seeing a lot of ads. They
do this already with "Sponsored" products and most of the time it serves as
distraction instead of convincing buyer into even at least clicking their ad.

~~~
remir
This is what I never understood in online ads. You're looking to buy, say, a
North Face jacket but the price is a bit higher than you're willing to pay, so
you close the tab.

Now, you go elsewhere on the web and you see ads for that particular jacket,
but there's no incentive for you to click on the ad because you already know
the price is too high.

But if the ad says: _" hey, 10% off on this jacket in the next 30 minutes with
coupon code xyz"_ then yeah you might click on the ad, buy the jacket and in
the end, the customer, the retailer and the ad agency are all winning.

~~~
mrob
If you could manipulate coupon codes like that then why would anybody pay full
price (if it wasn't urgent)?

~~~
Slansitartop
Not everyone is that savvy or willing to put in the effort.

There are people who save ridiculous amounts with traditional coupons, but not
many people are willing to put in the effort or make the sacrifices to to
that, so they still work for the companies.

------
NicoJuicy
Facebook was more likely to threaten Google. But I think they failed, amazon
won't be a threat.

Ps. A possible big competitor is not not considered a threat in this context.
Just as Facebook is a big competitor to Google, but failed to be a threat

~~~
wastedhours
For me, Amazon will be because the nature of their advertising is intent-
based, like Google's. What Facebook has always struggled with is the _context_
of the adverts (by their very nature), whereas Google and Amazon's advertisers
already have the user's intent right there (searches for services/products).

~~~
hyperbovine
What use is intent if you know every single intimate detail of a person's
private life.

~~~
matt4077
Judging by the ads I get on Facebook: a lot.

------
ilamont
I use AMS for my publishing business. Amazon sales were up 73% the first year
I started using it, although in the same year I also launched several new
products that did well (and did not benefit much from AMS ads).

Yes, the UI blows, there are various unfathomable policies ("One or more of
your products doesn't meet the financial threshold established by Amazon and
is no longer eligible for advertising" \- this for one of our top-selling
titles), and the reporting leaves a lot to be desired, but at the end of the
day it works.

The same cannot be said for Facebook ads (waste of time and money for what I
sell), Google AdWords (hurt by its own popularity and ridiculous policies such
as this one: [http://www.digitalmediamachine.com/2017/10/google-kills-
my-a...](http://www.digitalmediamachine.com/2017/10/google-kills-my-ad-for-
revisionist.html)), and LinkedIn which is fleecing small-business clients with
sky-high CPCs that don't perform.

I fear, however, that the popularity of AMS may cause the same fallout as
AdWords - loads of buyers rushing in, driving up rates and driving organic
results off the page.

------
ptlu
Hello!

I used to working on the AMS self-service advertising team as a developer.

 _Note all opinions are my own._

When I first joined the advertising team, I was unsure about a product that
can have a seedy sort of reputation on the web. But I was very pleasantly
surprised how much we care about the customer experience in regards to ads at
Amazon.

The end goal is always to show the customer the best item for purchase, and
Retail would always set a high bar for the Ads team. This has in-turn caused
us to invest a lot into ensuring the relevancy of our ads is top notch, we do
not want to display ads which are ineffective - this hurts both the retail
customer and the advertiser.

Nothing would get approved without vigorous testing to ensure the ads had a
neutral or positive impact on the retail customer.

~~~
RestlessMind
While I don't doubt your personal integrity, I am sure a Google or Facebook
employee would claim the same. After a while, organizational incentives start
nudging you in a direction optimal for the company and not necessarily optimal
for the user. It starts in slow imperceptible increments and before you know,
your product is ad-infested sub-optimal UX.

~~~
ctvo
Except ads aren't Amazon's primary business or revenue stream. They're
incentivized to do exactly what the OP stated.

~~~
RestlessMind
Or so one would think. But you can try for yourself and see how ad-infested
Amazon has become.

To throw a few random examples, I just tried (from Mac / Chrome / Incognito /
Signed-out mode), I searched for "sensodyne toothpase". Entire page is full of
ads and I have to do a full scroll to see organic non-ads results. Same for
"biodegradable trash bags". Almost the same situation for "qtips" though there
were 2 partial images of organic search results. Its almost as if I am
searching on Google (and no, thats not a compliment).

------
tanilama
Ads is free money from Amazon. After all they have the best possible traffic
one can imagine: clear shopping intent queries, with customer shopping
history. They just need to put up the billboards, the money will follow. Maybe
not Google scale, but free money, what not to like?

~~~
arbuge
Several things... for example: as a seller advertising on Amazon, you are
sharing all your profit metrics with a potential competitor who has a history
of stepping in with their own proprietary branded products where they see
significant profits to be made.

------
fredliu
Maybe I'm biased, but personally, I never ever clicked on any ads showed up
along my google search query, even if they are relevant. I just can't get rid
of the nagging feeling that: "there gotta be better deals else where (e.g. on
Amazon?)" or "The merchant paid Google a premium to show up along side my
search results, the price can't possibly be the lowest". Am I the only one
feeling this way?

------
rsbartram
Why is there not a true rival to Google Adsense?

~~~
exolymph
The winner-take-all dynamics of the internet.

------
dang
We changed the URL from [http://archive.is/ZdCQL](http://archive.is/ZdCQL).

Please post the original link. It's fine to include a link to an archived
version in the comments. Users frequently do that as a favor to other readers.
But please don't submit such a link to begin with, because it obscures the
source of the article and messes up the data.

~~~
chatmasta
What about domains that are instaflagged? For example, I tried posting a
Breitbart article [0] about a conservative blogger at Google, because in this
one case I felt like it was the best "primary source" to get the discussion
started. It was auto-killed like every article on Breitbart. [1] So I
resubmitted via archive.is and actually got 6 upvotes [2], showing there was
at least some interest in the topic that would never had surfaced if I used
the original link.

[0]
[https://news.ycombinator.com/item?id=16103017](https://news.ycombinator.com/item?id=16103017)

[1]
[https://news.ycombinator.com/from?site=breitbart.com](https://news.ycombinator.com/from?site=breitbart.com)

[2]
[https://news.ycombinator.com/item?id=16246184](https://news.ycombinator.com/item?id=16246184)

~~~
croon
Have we really arrived at a place where "conservative blogger" is an accurate
description of a person who:

* "isn't exactly allergic to the stuff" (re: white nationalism)

* wrote "Not all humans are born the same, of course, and the innate character and intelligence of some is more suited to mastery than slavery. For others, it is more suited to slavery. "

* asked "What's so bad about the Nazis?"

* etc

?

I'm not sure if it's liberals or conservatives who should be offended by that.
Hopefully both.

~~~
chatmasta
The interesting part of that article was that his views were sufficient to
silently land him on a “do not visit” list at Google HQ, which implies that
Google is tracking people who hold such opinions and adding them to such
lists.

~~~
hux_
No great conspiracy here. Any mid to large org maintain such lists. If you
fire someone who is wasting the orgs time, do you then want him to show up/get
hired/be entertained by some group in the next building/next campus etc who
have no idea what the story is?

~~~
chatmasta
The guy is not an ex-Google employee. This event was named in the Damore
lawsuit as evidence of discrimination against political views because all he
was guilty of was blogging things someone at Google had a problem with.

It doesn’t make you uncomfortable to know that even if you’ve had no previous
interactions with Google, you may be tracked and added to a list of
undesirables? Who controls the list, who has power to add people to it, and
what else are they doing with this list? What if they’re looking at his search
history too? Would that be okay?

~~~
zimpenfish
Google are a private company with no requirement (barring legal strictures) to
allow anyone onto their campus. If they want a list of undesirables, they can
have one. Same as you've probably got one for your house.

------
sillypuddy
What would this look like compared to something like Kaiser Permanente?

~~~
freehunter
Did you perhaps mean to ask this in the other Amazon thread right now?

[https://news.ycombinator.com/item?id=16264662](https://news.ycombinator.com/item?id=16264662)

~~~
sillypuddy
Yup

------
NicoJuicy
I call BS, it's a bubble ad network.

The chances are users will be happier with a product through natural selection
( eg. better/trustwurthy reviews), than products through ads.

Although, Amazon could earn more in short term, users are less satisfied and
they lose money long term.

What happens if Chinese vendors buy all the ads and set a lower price ( which
they can). Then most buyers won't be satisfied on Amazon ( terrible English)
and they start using AliExpress ( cheaper and same shipping terms after eg. 1
year of Chinese vendors that dominate Amazon). This "free money" could be
their downfall.

Already technical users here on HN don't want to use Amazon for the risk of
receiving counterfeit products.

~~~
the_watcher
Amazon is in complete control of the ads they show. Quality of ads is a huge
goal of anyone working on an ad network trying to compete with Facebook or
Google.

~~~
jack9
> Quality of ads is a huge goal

How you do that is part of the lifecycle of an Ad platform. The ephemeral
"quality of ad" is completely subjective and will forever be inadequately
measured (to anyone's satisfaction for very long). Eventually all ad networks
are subject to market pressures in pursuit of margins. Third party ads
eventually arise from the existing technical implementation of ads (tons of
untrusted code running in js and vpaid applications), even when "prohibited".
There's nothing special about Amazon's platform. Lots of platforms have been
the "new hot thing" with "total control".

