Amazon building “Product Ads:” ditching 3rd party networks?

July 13, 2007

Marketplaces ChannelAdvisor By ChannelAdvisor

From a job posting on Craigslist SF and a yanked job posting on Dice comes evidence that Amazon is looking to spruce up their ad program.Jobpost_2

Called Product Ads, the postings describe the product as

a new cost-per-click advertising channel on the Amazon.com website

that

combines elements of Amazon.com’s
Merchants@ offer listing business and A9’s advertising cost-per-click
tracking system to allow merchants to create product ads, thereby
increasing selection on the Amazon.com site and monetizing that
selection.  Ultimately, Product Ads will allow merchants to upload
listings using simple feed formats common in the industry.  The buying
experience will vary for Product Ads depending on whether or not an
Amazon or merchant offer exists.  Customers can choose to purchase from
Amazon or a merchant, or they may click on a link to an external
website and shop there.

This looks like it ties into the existing Clickriver closed beta, which has existed since around November 2006.  The program to date has sought to appeal itself to service providers and “retailers who want to
advertise products that complement those sold on Amazon.com.”  Note that it didn’t say existing retailers on Amazon.

The Clickriver site actually encourages retailers who want to promo their wares to sell, not advertise, on the site.Clickriver_example

Ads are currently displayed underneath search results and is one path for Amazon to monetize those pages.

A product vision
So what could Amazon be cooking up, exactly?  One prediction is a seamless advertising program integrated with Amazon seller tools, complete with tracking tools, bid management, budget management, ad creative creation and distribution targeting.

Amazon already wields power with their recommendation system.  I’ve heard stories where a new book is released and paired up with an older book on the same topic — this simple act having the power to revive flat or close to non-existent sales for the older work.

The company knows how to channel traffic and does extensive testing on the site — Product Ads may be an introduction to merchants being able to tap into that knowledge and  have some more power to promote their products to the 52 million domestic visitors per month.

This is solely for the flagship property, though.  Amazon also owns IMDb, dpreview, Alexa, and more — imagine, from the perspective of a merchant,  being able to target these properties with ads.

You’d be sending highly relevant traffic back to specific products, which could, in turn, drastically increase conversions.

Good for Amazon, good for the merchant, good for everyone.

I imagine that the stats tracking on this could be very powerful — product-per-product basis, with cost / revenue, impressions / CTR, reach, clicks onto other products, tracking flow from ad clickthrough to final product buy — to understand what drew the person in and compare that vs. what they actually bought.

Hmm…I’m still digesting this.  Let’s get some feedback from the crowd here.

Written by Scott Hurff; scott.hurff at channeladvisor (that’s dot com).