Amazon is testing a new advertising tool. Google makes billions of dollars from it

Amazon wants to make more money from advertising - the company will offer its sellers advertising on third-party sites, on which it begins to test a new advertising tool from which Google and, for example, the French company Criteo earn billions of dollars, writes Bloomberg .

Details

• In essence, we are talking about retargeting contextual advertising - sellers will be able to buy advertising slots that will “stalk” users who have viewed their products or analogues on Amazon, thus “luring” them back to Amazon to buy, Bloomberg explains. On which sites or applications the ads will be shown, the presentation, which the agency reviewed, did not say. In Russia, similar tools are offered by Yandex.Direct and Google AdWords.
• Advertisers will only have to pay Amazon if the buyer clicks on the ad. According to agency sources, some Amazon sellers will offer to test test purchases of new ads as early as May.
• A new type of advertising tool will allow Amazon to simultaneously earn on its sale and increase the number of transactions of its sellers and, accordingly, its own commissions, Bloomberg notes.

Context

• The share of advertising in Amazon's advertising revenue is relatively small - 1% of total revenue, but on the scale of the giant, this is decent money - $ 1.7 billion. For comparison, Google, for which advertising is the main income, makes $ 95 billion a year on it, Facebook - $ 40 billion.
• The new advertising tool is evidence that Google and Amazon are becoming increasingly competitive in the advertising market. Since the end of April, Amazon has stopped buying advertising links from Google at the top of the search engine results. Google, in turn, decided in March to team up with retailers to create a new service in the online voice shopping market dominated by Amazon.
• By the way, in March, Amazon for the first time overtook Google's parent company, Alphabet, in terms of capitalization. Amazon is now worth $761 billion, Alphabet is worth $753 billion.

What do I get from this?

The closest thing to watch is Amazon’s competition with Google in the online voice trading market, which is where a whole new market is now emerging in the US, which will soon reach Russia.

Artem Gubenko