
Amazon now has a billion-dollar ad business - elorant
https://digiday.com/marketing/amazon-now-1-billion-ad-business/
======
wpietri
One of the things I liked about Amazon early on is that they were on my side.
They were very customer focused. For a while, though, they've been shifting to
make me the product. Their site has become filled with sponsored products and
ads. It's definitely reducing my trust in them.

~~~
Havoc
Trusting big companies is a folly anyway. They make decisions based on dollars
and stats.

The only companies one can "trust" are the smaller ones - where the owner
still has enough control to stamp his own sense of ethics onto the place.

~~~
wpietri
Sure, but with their previous business model I didn't have to trust their
ethics, just their long-term self interest. Amazon got big because they were
good at serving their customers well. But if they've decided to make money
from selling access to manipulating their customers, suddenly my trust in
their sense of self-interest isn't enough.

~~~
majormajor
I think you're missing a level of trust that it sounds like you implicitly
had.

Selling you products you wanted at a good price never precluded them from
doing shady with the data that resulted from those transactions. Their
incentive is to _maximize_ income, so they could've always done all sorts of
shady behind-the-scenes things with the data as long as they felt the risk of
getting exposed and losing a lot of business as a result was sufficiently low.

------
click170
Maybe they can reinvest some of that money and figure out how to not spam me
for things I've already pre-ordered _from Amazon_.

Case in point, Super Mario Odyssey. Preordered from Amazon, and they've been
sending me nonstop emails to try and sell me additional copies ever since.

At least their marketing emails tend to come from a different source from
tracking notification emails so you can filter them with ease.

~~~
smelendez
I've bought multiple copies of the same item from Amazon. Sometimes it's been
groceries but not always.

I've bought books for myself then bought them again as gifts for someone else.
I bet a lot of people who bought Switch games for themselves will buy more
copies as holiday presents.

~~~
sosborn
Yeah, but if you've already bought the product it isn't likely that you need
to be marketed to in order to buy it again for the purposes you stated.

~~~
jcrites
Certain products are purchased repeatedly: for example, anything consumable
like paper towels, toilet paper, diapers. Certain other products are purchased
multiple times, but with a delay in between purchases.

A final category of products are virtually never purchased multiple times
except as gifts. Video games and other media most likely fall into this
category, and targeting logic should understand that. I understand the OP's
complaint.

------
umeshunni
If the business generated $1B last quarter, isn't that a $4B business?

~~~
wpietri
Excellent point. The article was kinda hazy, but the original Amazon press
release is here, and it confirms your take: [http://phx.corporate-
ir.net/phoenix.zhtml?c=97664&p=irol-new...](http://phx.corporate-
ir.net/phoenix.zhtml?c=97664&p=irol-newsArticle&ID=2311817)

------
julianpye
The online business has really migrated from a long-tail exploration business
to one where people just go with the masses and buy the 'No. 1 in Category'
product. Now giving companies the chance to take such a top spot and proving
the value of that positioning by being able to verify that the purchase was
completed is an amazing asset to have. That shot at being the first trillion
dollar company is getting better and better.

------
aslkdjaslkdj
That is only part of Amazon's advertising business. If you read their 10-k:

"Vendor Agreements We have agreements with our vendors to receive funds for
advertising services, cooperative marketing efforts, promotions, and volume
rebates. We generally consider amounts received from vendors to be a reduction
of the prices we pay for their goods, including property and equipment, or
services, and therefore record those amounts as a reduction of the cost of
inventory, cost of services, or cost of property and equipment"

[http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-
sec...](http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-
sec&control_selectgroup=Annual%20Filings)

~~~
shostack
What's the insight here? How they handle the accounting of it?

~~~
notatoad
i think the insight is that if you count all the other advertising revenue
that they book as "cost reductions" instead of standard revenue, then they're
making a lot more than $1b per quarter off advertising (or alternatively, the
fact that they're making $1bn per quarter is not a new thing)

------
known
Hope AMZ will fix [https://www.quora.com/Has-anybody-got-cheated-by-Amazon-
Indi...](https://www.quora.com/Has-anybody-got-cheated-by-Amazon-India)

------
markpapadakis
what if that advertising revenue goes towards offering even lower prices to
customers? would that be an acceptable tradeoff? say, out of 1$ generated from
ads on amazon.com, 80c set aside for offering lower prices, and 20c for
running costs etc? I don't know if that's the case, just curious if it'd be OK
if that was the case.

------
Entangled
Competition is good, even for heavens and hells.

------
oh-kumudo
As always, adblocker is your friend.

I don't really see that Amazon can go so bold to block customers that come to
the websites with adblockers on, unlike other business like Youtube/Facebook.
After all it is a retail website, ads is just easy money they collect on the
way.

------
iiiggglll
I refuse to believe a single number about the online ad business while things
like this are going on:

[http://fortune.com/2016/12/20/methbot-ad-
fraud/](http://fortune.com/2016/12/20/methbot-ad-fraud/)

