Amazon has become a powerful advertising giant and is rapidly gaining ground on Google and Facebook in annual marketing revenue, topping $10.1bn in ad revenue for 2018. But how did this e-commerce company become one of the world’s top advertising platforms so quickly?
In this two-part blog we’ll explore some of the major milestones.
Early on, Amazon executives realized that they were sitting on incredibly valuable online real estate (in the form of data collection and customer accessibility) that they knew they could monetize, but they had to be careful not to negatively impact the customer experience in the process. Amazon has an extremely loyal customer base that uses the site and other properties with high frequency, and it was important to them to keep it that way! As the company grew into becoming the biggest product search engine in the world, they were careful to protect the customer experience and overall satisfaction. Even as Amazon developed and implemented its powerful data collection process, it’s focus was still on treating the consumer’s data with respect.
Below we’ve outlined a brief timeline history of Amazon Advertising (split into two posts) so you can understand, in part, how one of the world’s largest companies continues to innovate and grow in the field of advertising and marketing services.
2012
In 2012, Amazon began tapping into the potential of their advertising business by starting Amazon Media Group (AMG), Amazon Marketing Services (AMS), and Amazon Advertising Platform (AAP). Collectively, these services provided pay-per-click and other advertising tools to Amazon sellers that helped those who paid for ads stand out among competitors selling the same product.
Early in the year, Amazon launched its advertising business as a fully functional platform to connect sellers trying to engage with customers to its 180 million person user pool. Amazon Advertising initially focused on banner ads and highlighting search results, but it soon began to expand rapidly and offer more tools as the demand grew.2013
After running internal ads on their site for a good time, Amazon realized the potential it had with their data collection and retail connections. 2013 marked some of the first steps toward becoming a true Internet advertising giant that Amazon knew they could be. Using the data collected to place-targeted ads on and for thousands of external websites, Amazon began tapping into a hidden gem within their business. Other web-advertising companies know your habits and interests, but Amazon knows what you searched for last week and what items you’ve been viewing and ultimately what you purchased. Advertisers were yearning for true media attribution and Amazon’s ability to “close the loop” was very much welcomed.
2014-2015
These may have appeared as quiet years for Amazon Advertising’s growth, but big things were happening behind the scenes. Amazon continued working on and developing better technology to listen for keywords through their app and on smartphones. This was a game changer for the advertising field, as now they could not only see searches but could simply listen to what someone talks about. In November of 2014, the first Amazon Echo was released which would further the advertising opportunities through audio devices.
2016
The Amazon Advertising blog began in September 2016. The blog chronicled the advancements that Amazon Advertising was making with new ad services and technology in general. Later in 2016, the focus was shifted towards helping ads more accurately target customers and creating a more usable internal search engine. As the year came to an end, Amazon Advertising really pushed the idea of sponsored products, especially in relation to sellers who were trying to boost holiday sales.
Part two to follow….