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Your Purchases for Sale: Amazon Enters Ring with RTB Advertising

Written on
Dec 19, 2012 
Author
Richard L. Tso  |

Think about all of the information that the shopping giant Amazon.com has on you – your history of purchases, the friends you send gifts to, even your browsing habits and personal tastes for clothing, books, music, and food through its home grocery delivery service Amazon Fresh. While social networks like Facebook and Spotify receive a lot of heat over the amount of data they have on their members, Amazon.com is elegantly poised to leverage your shopping habits to provide advertisers with a better way to reach you online.

Unbeknownst to many outside of the ad industry, Amazon has been accelerating it’s move towards strategically entering the advertising ring. Over the last year, the company has been building its own real-time bidding ad platform that snaps into ad exchanges and integrators, including Google DoubleClick’s AdX and PubMatic. Once completed, Amazon’s will be able to retarget consumers with ads based on their purchase history and browsing behaviors on its etail shopping site.

This means big business for advertisers looking to more effectively target shoppers online.

While it is expected that Amazon will formally launch its self-serve RTB platform in early 2013, it is not yet known exactly how much personal consumer data will be used to fuel this ad platform. AdWeek reported that because Amazon is very protective of its data and providing outside access, like Facebook, Amazon’s platform would allow buyers to create target segments like “women; aged 25-34; in New York; interested in espadrille shoes; who have purchased books related to fashion and technology.”

It was already known that Amazon was entering the advertising arena. Wired reported in October that the company began offering real-time bidding to other advertisers earlier this year using technology provided by other ad-bidding specialists like Triggit, contributing to Amazon’s estimated 2012 ad revenue of $500 million to $1 billion.

Now that Amazon has built its own ad purchasing platform, this is an indication of just how serious the company has become about selling ads across the web. When a shopper leaves Amazon’s website to surf other sites, they all their shopping habits and past purchases will essentially travel with them and influence the ads they see across the web. The idea is that this will allow advertisers to deliver highly targeted ads and consumers will recognize the relevance, click and convert.

Sounds pretty great in theory, but are consumers actually responding to this mode of advertising? Is this type of ad targeting creating a more paranoid consumer, skeptical about this type of “Big Brother’” approach?

Only time will tell, but preliminary research indicates that people do respond to ads that are highly relevant to them. According to a research study by Jupiter Research on behavioral targeting, “Consumers are consistently more receptive to behaviorally targeted ads than to contextual advertising. In face behavioral outperformed contextual by as much as 22 percent.”

This stat seems pretty obvious, but for me, getting served ads like this one I got with my name in the creative can be a turn-off; it’s just a bit too targeted for my taste.





Richard L. Tso is a reporter for Adotas and an avid writer covering the intersection of technology and advertising, fashion and music. With over 12 years of experience in the Advertising, Marketing and Public Relations industries, Richard has held executive positions at global agencies and technology companies and is founder of the interactive communications firm Pseudosound Consulting LLC. A classical cellist and painter, he believes that sometimes sound carries more weight than words. He is a graduate of Stanford University.

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