Big Data: Amazon Set To Sell Advertisers On Its Trove Of Consumer Buying Data

amazon-iconThe world’s largest online retailer is now positioned to expand its advertising services. MIT Technology Review reports that after relying on third-party technology and ad exchanges over the past year, Amazon has developed its own in-house advertising platform.

Amazon has an unrivaled bank of data on online consumer purchasing behavior that it can mine from its 152 million customer accounts. The company knows what millions of people actually buy or are intending to buy and it can now give salivating advertisers a way to target ads based on that data. While Amazon has not commented, the MIT article suggests that the company would not give advertisers direct access to the data due to its own privacy policies and a desire to keep the data proprietary.  Instead Amazon will create target audiences based on customer purchasing habits. For example, a marketer selling digital camera accessories could bid to show ads to a target audience of digital camera buyers.

Up to now advertising has been a relatively small part of Amazon’s business. It brought in about $500 million of Amazon’s $48 billion in revenue in 2011 according to Baird & Co. Both Amazon Product Ads and the newer Sponsored Ads program that rolled out last spring run on Amazon’s own sites.  An ad network that reaches across sites could open much larger revenue streams for the company.

The question the MIT article raises is if Amazon is planning to expand its advertising business and compete more directly with Google and Facebook.  Or whether the company is primarily concerned with retailers like Walmart and plans to use the ad network to support the sellers on its own sites.  Advertisers will be watching.

Related Topics: Amazon | Channel: Retail | Display Advertising | Top News

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About The Author: writes about paid online marketing topics including paid search, paid social, display and retargeting. Beyond Search Engine Land, Ginny provides search marketing and demand generation advice for ecommerce companies. She can be found on Twitter as @ginnymarvin.

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  • Fabian Linge

    Hey Ginny,
    thanks for the post. Who would not be interested in Amazon’s data on consumer behavior?!?! If they do share the data when launching the new Ad’s it’ll probably be worth signing up just to get a sneak peak on the data rather than the Ads :-)

    Cheers,
    Fabian

  • Pat Grady

    Blue Kai on steroids.

  • http://www.socialbakers.com/ Michal Smetana

    152 million of accounts data is really something. I mean, they can really use this enormous amount of data to pursue a vast ranging analysis of consumer behavior, consumer preferences, etc. – something that could be very precious for marketing (especially online marketing) purposes.

  • http://twitter.com/SteveS1 Steve Schildwachter

    Looks exciting, lots of data…but knowledge derives from human minds at work. That’s one of the lessons this ad man read in Nate Silver’s The Signal and The Noise. http://admajoremblog.blogspot.com/2013/01/book-review-signal-and-noise.html

  • rightcopywriter .com

    This a really smart and out of the box decisions taken by Amazon.
    Really amazing and effective.

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